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Telco Evolution: Expanding Beyond the Core

3AI October 23, 2023

Featured Article:

Author: Siddharth Shah, Airtel

In today’s rapidly changing digital world, telecom players are undergoing a transformation from being mere connectivity service providers to becoming comprehensive digital platforms. This is driven by the interplay of dynamically evolving customer expectations and opportunities for long-term growth.

Telcos are diversifying their offerings and in fact, a McKinsey study says that they earn ~15% of revenues outside of pure-play connectivity services, a percentage that is expected to grow. This signals a repositioning within the business models.

To succeed in this repositioning, telcos are focusing on two critical pillars: simplifying products & services and delivering superior customer experience. Telcos have expanded their offerings with a focus on changing customer needs, such as innovative IoT solutions, bundled cloud offerings, and expanding into ad-tech stacks. They are now raising the bar on customer-centricity by offering hyper personalization and customized selfservice omni-channel experiences.

Global telco players are testimony to this transformation trend – Vodafone provides aggregated insights and visualization services for businesses across industries by leveraging telecommunication data. T-Mobile is emerging as a critical enabler in digital transformation journeys for several clients (IoT and cloud, etc.) Telstra is focused on customer security and has expanded its cyber security offerings by building identity and fraud prevention solutions. At the heart of this disruption lie data and artificial intelligence. As telcos house goldmines of data, they have been able to create a winning edge by redefining value-additive and serviceexcellence avenues to keep up with the industry that has leapfrogged several years. Some examples are – Telefonica’s use of data and AI for operational and customer excellence. It has deployed machine learning on its network to proactively self-correct potential incidents, thus boosting customer experience. EE (part of BT Group) has also enhanced experience by extensively deployed AI to prevent spam by identifying spoof numbers and patterns. Orange built a personalized customer-centric marketing ecosystem powered by AI. SingTel uses TV viewership data to enhance ads effectiveness by making them more personalized and relevant. Telcos are also expanding their suite of use cases by making investments in AI tech firms. One such example isSK Telecom which recently partnered with a leading AI tech firm to drive AI innovation.

However, as telcos expand their capabilities, they must be wary of potential challenges. It is critical that telco firms be on the lookout for regulatory risks. As telcos foray into newer business propositions, they must ensure that customer privacy remains uncompromised. As India joins the digital data privacy bandwagon with Digital Personal Data Protection Act, it furthers the global focus on being more mindful with data. Additionally, with an increased emphasis on sustainability, telcos must adopt ESG goals in their overall vision. This demands a renewed commitment to digital social responsibility from operators.

To conclude, telecom players are revisiting their ambition to become digitalization enablers for businesses and consumers by building adjacencies and drawing lessons from the successes and failures of self and others. Adopting this strategy will help telcos develop a future-ready roadmap to embrace change despite the pace, scale, and complexity of it. The industry is witnessing a paradigm shift and telcos are acting with agility and adaptability to seize opportunities to unlock value for their customers and stakeholders alike.

Title picture: freepik.com

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