There's been no better time to be a telco

We’re good at predicting doom in the telecommunications industry. We can all offer a list of worries: shrinking margins, disruptor companies, stagnant ARPU, etc. We’re less prone to look on the bright side. I believe it’s important to pause every now and then to look at the things in the “strengths/opportunities” column.

Because, honestly, I believe this is a fantastic time to be a telco. Let’s look at five reasons why.

1.      More demand and more critical than ever

Quality connectivity is fundamental to work and life. More gets connected every day, with the growing Internet of Things creating a new digital web we’ll all count on, whether at home or on the move. The increased quality of fibre and 5G will encourage us to use connected services even more, while boosting demand for flexible bandwidth, universal coverage, quality of service and security. Consumers don’t want to live without these services, while enterprises are seeing whole new markets opening up and effective operating models based upon them. Telcos are at the heart of this new economy, providing the critical infrastructure everyone needs.

2.      Trusted by the customer

Telcos consistently top consumer trust charts regarding personal data, beating even banks. That’s a big benefit when data privacy is a worry: 90% of online consumers are concerned about the security of their online financial transactions and 89% about identity theft, according to a recent Accenture consumer survey. The same survey highlighted that time-poor consumers would prefer to go to a single, trusted provider for converged services. That makes for a very fertile opportunity for trusted, already-present telcos. For enterprise services, the situation is pretty similar: cyber security is the No. 1 worry for CIOs wanting to grasp IoT opportunities, while the second is personal data loss. Telcos have a strong asset in being trusted hands to manage services from devices through networks to cloud infrastructure and platforms, and handle the clients’ data.

3.      Existing relationships

No company is an island in the digital economy. Quite the reverse. Those with the most, best relationships are likely to flourish (Witness Amazon…) Telcos start with both a huge consumer and enterprise base: almost every person has a phone (or several), the majority of households have a broadband connection, every enterprise has a telecom infrastructure. Telcos have existing billing relationships that are powerful links to build additional (3rd party?) services on. They have shops, call centers and field forces that help clients at scale. Quite simply, they have a client base, relationships and a capability to serve customers in a very local manner, that are the envy of every competitor.

4.      Data rich

No other type of company has the insight we give to those who handle our internet traffic. The big data opportunities are enormous. Telcos need to take great care of privacy issues, so they don’t lose the trust discussed above, sure. But the opportunity is there: first, for insight to drive superlative customer service, second to create and deliver a whole range of new, very tailored (potentially 3rd party) services, and finally to create insights that are of value to others, who may want to partner or purchase.

5.      Accepting and working with the change

A recent Accenture survey found that 51% of telco executives believe that their industry has felt the effects of digital disruption more than any other, which put them top of the list. This disruption has been going on for a decade, since the iPhone introduction in 2007 decoupled services from ‘network ownership’. As a consequence, most of our telco customers are much further down the road than companies in other industries when it comes to making the changes necessary to do well in the current economy. Zero-based budgeting, running lean to create fuel for investment, balancing on- and off-shore teams to be both nimble and cost effective, continuous optimization of online (mobile) presence and applied analytics, leveraging cloud for cost reduction and agility, and exploring new business models and adjacent businesses are initiatives that are already widely embraced by the industry.

The question, then, is how to ride these positives and reap the benefits? What priorities should telcos have? What executive interventions should they make to ensure it really will continue to be a good time to be a telco? In my next article, I’ll provide some answers.