How telcos can become true Digital Natives

Digital Transformation Innovation

It’s nearly 25 years since John Perry Barlow first talked about Digital Natives in his widely distributed paper A Declaration of the Independence of Cyberspace, which was primarily written as a response to the Telecommunications Act of 1996 in the US.

While this marked the first substantial revamp of telecommunications law in more than sixty years, the arrival and rapid adoption of digital technology at the end of the 20th century has of course profoundly impacted the lives of everyone born since.

Fast forward nearly a quarter of a century, and it’s clear that the pace of technological change has only continued to increase. Today more than ever before this is placing increasing pressure on telcos to transform the way in which they structure their operations in order to effectively engage with subscribers.

Many businesses, including telcos, have turned their attention to cloud-native technologies to develop and enhance their software offerings. However, there is a lot of confusion and even misinformation in the industry about what cloud-native means, never mind what cloud-native systems themselves are.

At the end of 2019, the TM Forum released a report aiming to sort through the terminology and offer an explanation as to how operators can begin adopting cloud native technology and capitalising on opportunities presented by public cloud options.

The report highlights that in many respects public cloud is the “Wild West” for telcos, which the TM Forum explains is why its research revealed that many communication service providers (CSPs) have deployed less than 5% of their operations software in public cloud offerings.

What’s more striking, according to the report, is that this is at a time when the investment telcos are making in operational and business support systems (OSS/BSS) should actually be on the increase in order to cope with the growing demand for 5G services and operational rollouts.

The Cloud Native Computing Foundation meanwhile defines cloud native as referring to “applications or services that are container-packaged, dynamically scheduled and micro services-oriented.”

While respecting this and the vast amount of industry research conducted into cloud-native software offerings, at Qvantel we prefer to talk about how operators can become Digital-Natives, and more specifically, Digital Native Customer Management solutions for telcos.

In many cases this requires a shift in mindset for telcos, with a transition to a more digitised way of running operations and a new approach to customer experience. Traditionally, operators have designed business models to enable customers to interact with their employees, with the role of a software platform being to support this interaction.

However, telcos today need to be able to offer a service that enables customers to interact with and respond to digital experiences, while still continuing to improve efficiency in their day-to-day operations.

This is where the telco industry as a whole can learn from the digital transformation success stories from other industries such as financial services. Advanced digitalisation of services in industries such as this has raised the bar for customer services and increased expectations for ease of use, personalisation and interaction.

The most successful businesses are those that have embraced this challenge head on, defining themselves by the agility of their operations and modernising their business model to offer truly digital services to their customers that run seamlessly.

In other words, the key is for telcos to be able to implement cloud-based and omni-channel solutions that enable them to lay the foundation for a truly customer-centric digital business, complemented by data driven intelligence and flexible monetisation models.

We know that the global telecoms industry landscape is changing rapidly. Disruptions in technology and business models open exciting new opportunities, but also highlight a number of critical challenges to telcos’ future as high-value service providers; not least increasing costs coupled with shrinking margins and high churn rates.

However, one of the most important aspects of the road ahead right now is of course 5G, particularly as it starts to enable a proliferation of new, customisable services, all of which will require a new granularity of service level agreements. To cope with this, telcos will need to achieve a new level of agility across their whole ecosystem, both from an infrastructure standpoint as well as operationally.

When we recently surveyed telcos about the most important capabilities in order to compete in today’s digital age, the ability to quickly respond to market changes ranked as their top priority. For this to be realised and for telcos to become highly scalable, efficient and agile digital service providers or Digital Natives, they must embrace and invest in modern, digital architecture. By this, we mean solutions that set the foundation for using data for driving business forward, as well as accommodating future innovations to serve customers in digital channels not even known today.