Telecoms: From Optimization to Transformation

The good old days of rotary-dial telephones and operator-manned switchboards are well and truly over, with today’s communications technology growing by leaps and bounds. But what is the future for telecoms companies in this whirlwind of smart phones, tablets, laptops and voice-activated devices?

The telecommunications industry has gone through a few phases over the past 25 years; from privatization (1987-2000), to the mobile revolution (2001-2009) and then broadband explosion (2010 to date). The big question for the next decade is what direction will the industry take?

I believe it is very likely that, in the next two years, we will see telecommunications companies continue to focus on the optimization of their existing businesses and infrastructures. This is likely to be followed by further two years with a greater emphasis on transformation to new business models - seeking new revenue streams both within and outside their own industry.

The coming phase will look like this:

Phase 1: Creating value through optimization

A.   Digitalization. Telecom companies have been focused on generating higher efficiency and improved productivity over the past few decades. Process automation is helping them to achieve greater digitalization – but this is not always successful. In many instances, we are seeing telecoms try to digitalize their legacy processes, defeating the purpose of modernization. The automation of poor processes will not make them better processes. The key is to look hard at your processes as well as the systems that support them.

B.   Enhancing the digital customer experience. In terms of competitive differentiation, enhancing the customer experience is turning into a fierce battlefield for differentiation. To improve customer experience, telecoms companies are designing and reacting to customer interactions mainly in  multi-channels (telecom shops, online, call center) that needs to transform to seamless omni-channel orchestration.

C.    Real-time customer journey analytics. Telecommunication companies are increasingly using customer data, network data, and ethnographic research as part of their customer journey analysis. Historical data is useful, but it would be better if we could know what is coming. Trying to predict what is coming would be ideal, although things do not always work out as planned. Real-time customer journey analytics is about making the customer journey a living, agile thing that automatically adapts as necessary to reflect actual situations.

In summary, we expect that budgets will be allocated to three initiatives in the coming two years.

·       First, the continuation of digitizing the business using process automation and real-time monitoring.

·       Second, customer experience enhancement leveraging omni-channel and personalized marketing.

·       Third, the automatic adaptation of customer journeys as needed to upsell and prevent customer churn, combined with real-time streaming analytics and rapid app development to serve the connected customer best to their immediate needs.

These three initiatives over the coming years are focused on significantly improving existing business models through improved productivity, greater revenue generation of existing streams, and enhancing customer experience.

Almost any industry has the possibility of being disrupted (by, for example, the Internet of Things), so businesses need to consider whether it is better to be the disruptor or the disrupted. In my next blog I will discuss the second phase of future telecoms – creating value by a mix of optimization and transformation.