By Sara Rasmussen, Chief Commercial Officer at Telness Tech
For years, growth and profitability within the telecoms sector has remained muted at best – and it’s set to stay this way. From February to December 2020, telcos created less value for shareholders than nearly every other sector. And while the pandemic showed just how important these organisations are to societies , the market is predicted to remain stagnant (+0.1% compound annual growth rate) up to 2024.
There are multiple, complex reasons why the sector is floundering but many link to organisations’ reticence to adopt digital technologies. This has made them less agile, and less able to respond to countless challenges. Now, with customer, investor and legislative pressures mounting, operators are finding themselves in a ‘do or die situation’. Do they endure the short-term growing pains of digital transformation? Or do they let legacy infrastructures and processes consign them to history?
Answering customers’ calls with tech
Rising consumer expectations are an increasing source of heat for telcos. Leading technology organisations, including Netflix and Amazon have raised the customer experience bar for every business. People now expect to be able to get exactly what they want, themselves, at the touch of a button.
For telcos, this means taking a long, hard look at the services they provide and how they deliver these to customers. In a world where people can order world cuisine to their door in minutes, are they really offering the flexibility and personalisation that people have come to expect??
For most, the answer will be a resounding ‘no’ – and this is giving rise to a huge opportunity. Those operators who are able to break the mould and provide customers with the services and experiences they’re looking for will win their loyalty.
But to do this, they must invest in technology. This includes customer-facing applications, such as chat bots, but also their underlying infrastructure. Telcos urgently need to adopt cloud-native platforms that will give them access to the data they need to understand changing customer demands, and respond to these with new, highly targeted propositions, at lightning speed.
Tackling the skills shortage
However, adopting the right technology is only one part of the equation. Telcos also need to make sure that they have people with the digital, analytics and infrastructure skills to make the most of this. This is easier said than done when the technology, media and telecommunications (TMT) sector, and telecoms in particular, is facing a real digital skills shortage.
There are a number of ways that telcos can address this. Firstly, they can create talent development programmes and academies that will help them build these skills. This is a cost-effective and sustainable approach, but also takes time – and the clock is ticking.
The alternative is to partner with a startup – or ‘teltech’ – that was born from technology and has the expertise that telcos need. This approach is much faster, and effectively frees two birds with one key, by giving operators access to best-in-class technology, and the people able to implement it really well.
Rebooting organisational processes
Upgrading technology infrastructure and getting the right people in place will still only get telcos 75% of the way there. They also need to commit to evolving the way they operate to get the most out of these changes. It’s no good having the latest tech, if organisations still have processes from the 90s.
This recalibration needs to run through the whole organisation, including procurement and legal teams. Often these can slow organisations down and make it difficult for them to work with smaller, specialist parties. It’s important that these teams understand why the organisation needs to transform and the role that startups can play in this journey, so that they help, rather than hinder the process.
Organisations also need to really compress their planning cycles. Most telcos still plan three to five years in advance, but when consumer expectations are changing all the time, this is a recipe for disaster. Telcos need to be able to spin up new services quickly and then iterate these. This will demand changes in the way everyone works – from engineering teams to marketing.
Legislation compelling change
Telcos need to digitise to remain competitive, but making this shift is also important from a compliance perspective. The telecoms sector is highly regulated, and is about to become more so with the introduction of the new Telecommunications Security Bill. Having a
water-tight, up-to-date technology infrastructure will be critical to defending against security threats and remaining compliant.
When we step back and look at the telco landscape as a whole, it’s clear that organisations are reaching a ‘digitise or die’ moment. The steps organisations take to digitally transform now will define them for years to come, and those who act first will leave others in the dust.
 https://www.mckinsey.com/industries/technology-media-and-telecommunications/our-insights/how-tech-med ia-and-telecom-winners-use-talent-to-stay-ahead