By Zarnaab Aswad
Telecommunication companies (Telcos) face many key challenges today. To name a few, demand for differentiated and personalized offerings by the digital consumer, new external competitors, significant advance in software and technology, and new disruptive business models.
The Telecom Industry has largely remained unchanged since the days of the early mobile networks. Telecom players have mostly stuck to standard functions: laying out networks, expanding cross-channel presence, offering a plethora of plans with limited differences, and when new generation technology goes mainstream, adopting it and repeating the cycle. However, in complying with this cycle, they appear to have lost touch with their consumer base as a number of studies have reflected. As a result, we see declining growth, shrinking margins and bleeding balance sheets of most telecom operators generally.
Suggested Steps
Telecom players should strategically combine growth and efficiency into a new blueprint to unlock the full potential of digital, and transit to next generation Telco in the business transformation.
They can manage the journey to the next generation Telco, even if the industry is meeting unprecedented challenges. Studies suggest the following steps to rebuild a Telcos competitive edge:
1) Differentiated and Personalized Service Offerings: Consumer behaviour regarding traditional communication service is changing and the total consumer spend on these services is expected to decline even while overall communications activity grows. Therefore, Telcos need to serve to the demands of the digital first consumers by offering among others, personalized and differentiated service offerings that help them live their digital lives. And in doing so, transform themselves into a future where they can command a superior customer satisfaction. Telcos are looking for ways to deliver a superior digital experience for sophisticated services delivered over complex networks, said Anil Rao, Principal Analyst, Analysys Mason.
2) Expanding the Core Business Rightly: Data is now becoming Telcos core service and important revenue engine. Facing intense competition and pressure from growth, Telcos have to optimize business mix by rebuilding a portfolio of data, digital and traditional services aligning with innovative business models. Telcos should develop core digital services, e.g., content, payment and e-commerce, and bundle with tiered data planning to attract targeted digital consumers.
3) Evolving a Digital Ecosystem: The new generation digital consumers are used to interacting with service ecosystems built up by Over-the-top (OTT) players such as WhatsApp, Skype, and Snapchat which have already disrupted voice, video and text message revenues for Telcos. To avoid being outdone, next-generation telecom companies are evolving into multi-service providers that connect directly with the consumers by becoming an amalgamation of Bank (by partnering with financial institutions offering digital payments and other banking services); Information Provider (that mines proprietary consumer data assets); Applications Provider (by providing technology solutions to enterprise consumers); Media Company (by serving not only third-party content but also self-created content); etc.
4) Adopting a Cloudized Infrastructure Architecture: Telcos network architecture is fast restructuring towards becoming data centre based, hardware programmable and cloudized resource pool. Cloud is at the centre of how the telecom players transform to agile and high-efficiency operation. Cloudized architecture can not only decouple software and hardware but service and data. It makes telcos core networks and IT operations more flexible and scalable and enables telcos to provide digital services in an agile and cost competitive way.
A recent, comprehensive industry survey completed by Analysis Mason found that by 2022 more than 90 percent of Communication Service Provider Systems (CSPs) will run on the cloud, with more than 60 percent of these systems running on hybrid architectures. To address this growing segment Amdocs, a leading software and services provider to some of the worlds most successful communications and media companies will provide several initiatives, including:
- The migration of Amdocs Business Support Systems and third-party legacy environments into an optimized, hybrid cloud operational environment. Amdocs will enable and support CSPs as they deploy and migrate new and existing Amdocs products to AWS.
- Amdocs Managed Services Provider (MSP) practice to help CSPs modernize and drive low touch operations on an efficient and outsourced basis, including highly secure and reliable AWS technologies. This practice leverages Amdocs certification distinction as an AWS Advanced Technology Provider Partner in the AWS Partner Network (APN).
Communications and media providers run some of the most mission-critical and hyper-scale systems on the planet. Amdocs is a clear long-term leader in enabling CSPs across the globe and we are excited to collaborate with them to deliver impactful value to our mutual customers, said Terry Wise, Global Vice President of Channels and Alliances, Amazon Web Services, Inc.
AmdocsONE is fueled by cloud technologies as a fundamental design tenant and, as a result, many of our platforms today are fully cloud-native. It leverages a carrier-grade, microservices design paradigm to harness the dynamic scaling and deployment power of the AWS Cloud, and are excited about what this opportunity means to our customers, said Anthony Goonetilleke, Group President for Amdocs Technology.
5) Building the Best Network for Greater Connectivity: A lot of money has been spending to ramp up 4G and optical fibre networks because digital services are cranking up the huge volume of data traffic on rapidly penetrating smart devices. Obviously, digital consumers rely heavily on excellent network connectivity. Moreover, the connectivity has also been critical to the process of digitization across many industry sectors. Companies depend on the connectivity to attract the digital consumers and offer compelling customer experiences. In addition, OTT players also need the telcos networks as a platform for their business models. Therefore, the best network connectivity with consistently high average speed and sufficient capacity is telcos source of competitive edge for the future. More coverage, more capacity and less delay, are considered as the three keys. Several new technologies and methods should be used to build the connectivity with higher efficiency.
6) Outsourcing Non-Core Functions: Many telecom players have started testing and implementing outsourcing as a new model for improving efficiency. The overall idea of these models is to increase synergies and efficiencies. Network, IT and call centres are most often considered as the areas where outsourcing is relevant.
Lesson at the end
Telcos need to seize the opportunity to rethink and re-engineer their relationship with the customer and works on their digital strategy to succeed in the radically new environment. Bringing efficiency in the way they operate and innovate in technologies is crucial.
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