Why digital transformation is the key to survival for telecommunications companies - Asset Display Page

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By Sergio Donzelli


August 01, 2018

Why digital transformation is the key to survival for telecommunications companies

Today’s telecommunications companies are large and powerful, but they are being forced to deal with flat market revenues. In order to remain competitive, they must evolve from operators to digital enablers. Offering a platform with real time content to use the internet in a more valuable way is the next horizon.

Digital transformation in telecom is vital for offering an improved customer experience. It’s also necessary to generate new business relationships that are not solely based on consumer demand.

The Current State of Communication Service Providers

Communication Service Providers have evolved at an extraordinary rate over the past few decades. Right now, almost all internet traffic and content passes through the networks of CSPs, mobile and television companies (dth, hfc, etc). This makes it sound like telecom companies should be making major profits.

However, at the same time that connectivity has become a commodity, the Average Revenue Per User (ARPU) is falling and the companies are losing customers. This is forcing CSPs to redefine themselves in order to provide better customer experiences along with new content and services. Facing flat market revenues, digital transformation is the only way for these companies to turn a profit under these market conditions.

Characteristics of Today’s Telecommunications Industry

While there are many barriers telecom companies must surmount to stay competitive in the future, there are also areas for growth. Here are some of the characteristics of the telecommunications industry at present:

  • Cloud services show strong growth
  • OTT and Digital Content Companies have been growing exponentially
  • Limited value is being captured by CSPs
  • Regulations limit the potential of CSPs to provide new services
  • The capex needed to invest in new technologies and networks is huge

The future could be great for the telecom industry. The key is to transform themselves into Digital Service Providers. After all, they own the networks and can provide better End-To-End experiences to customers. Future Telecom Growth Opportunities

According to GSMA, the number of IoT connections will triple worldwide, reaching 25 billion connections by 2025 . This will generate astronomical data traffic over the internet and CSPs will have the chance to bring a completely new offering. They can begin to provide services and content not only for consumer, but specially for Vertical Industries (e. g. Healthcare, Manufacturing, Logistics, Financial Services, Government, etc).

In the future, CSPs will not only be able to transport data over the internet, but will also have the opportunity to add high value to customers with content based on this data, real time information, predictive information (using AI) and big data for business users.

Analysts from TMForum estimate that there will be about $1.2 trillion of additional revenue up for grabs (mainly B2B) between 2016-2025. But, in order to get in on the action, CSPs will need to transform the way they do business in order to meet the challenges of the future head on.

Future Challenges for CSPs

Transformation in many areas will be necessary to meet the challenges CSPs will face in the future. While digital transformation is at the center, there are a few other areas to focus on:

  • Transforming the culture into an adaptive culture
  • Ensuring a highly personalized Customer Experience (Digital Efficiency)
  • Driving new business relationships.
  • Transforming from a service provider to digitally enabled platform

Let NEORIS Help You Meet These Challenges Head On

NEORIS has the deep knowledge and experience to co-create a new digital roadmap with our customers to navigate their digital transformation. Using digital technology and our industry knowledge, we help our telecom customers to:

  • Provide highly personalized customer experiences through innovating and digitizing Marketing To Sale and Order To Cash Processes, automating manual tasks, transforming the CRM process and using big data to improve customer engagement and personalized offers.
  • Transform into a digital enabler platform to be able to interact intelligently with businesses, consumers, partners and things ecosystems. This is achieved by redesigning the information architecture, creating an API environment, developing IoT solutions and co-creating value-added solutions.
  • Transform company culture to become a high speed go to market company through IT process redesign (Agile, devops, automation), Sales Performance Management, Data governance and MDM.
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