Will digital end up being the saviour of telecoms?
News

Will digital end up being the saviour of telecoms?

You are here

November 4, 2019
In October 2017 leading consulting firm McKinsey published an article on the age of disruption in telecoms. This was a very well received piece that called out the perilous state of the telecoms industry. There were many articles published and conference speeches delivered just 24 months ago calling out the difference in fortunes of the OTTs (Facebook, Google, Amazon, etc) and those of the telecoms operators. I remember reading the McKinsey article at the time as it hit home in terms of its frankness. When discussing the need for change it didn’t pull any punches:  

“It’s time the telecom companies embrace this new reality and rethink the key orthodoxies that have shaped their industry since the first phone call was made about 140 years ago. If not, the alternative is dire. Yes, the stakes are that high.”  

In the same month, quite independently, Openet published a paper called Changing the Game which called out for a shake-up of the operator / vendor model. Just as McKinsey called out for the telecoms operators to change, Openet was highlighting the underlying problems with vendors and a legacy approach to operators that could be generously described as less than symbiotic.  

Both these reports, calling out for change, were published just 24 months ago.  

Since then we conducted some significant research about the public reaction to Telecom Operators (telcos) being trusted digital brands – with surprising and encouraging results.  

Recently Openet proudly watched as one of our customers, Telkomsel launched a fully digital service called by.U. Aimed at digital native Gen Z customers this is a digital first service which uses a cloud-native BSS suite that is built using microservices and digital APIs. This is the second digital brand we have been very closely involved with, having previously helped deploy the Fizz brand with Videotron in Canada.  

This is indicative of how telcos have changed to become digital companies. This move to digital is enabled by companies, like ours, who partner with service providers who have a vision to help drive digital economies and societies. For the vendors who enabled this digital vision to become reality many have needed the courage to tear up the rule book and take a new approach.  

A few years ago, most operators played it safe and bought from the big vendors, or got a free BSS thrown in as part of a 4G network deal. As a result competition was stifled. Now, several of the large equipment vendors are out of the BSS game. Open Digital Architecture and Digital APIs mean that best of breed suites are not just feasible, for many they’re the preferred option.  

The recent news about Vodafone adopting OpenRAN in certain countries shows that the move towards open systems isn’t just in IT stacks, but also in radio networks as well.  This shows that the next generation of mobile and digital services will be enabled by agile and open systems, and operators won’t have to face the prospect of vendor lock-in again.  

This industry has come a long way in just 24 months. The increased rate of digital transformation and roll out of 5G will ensure that the next year has the potential to be the most exciting in the last 20 years of mobile telecoms.  

Being digital brands will make the B2C part of a telcos future secure and profitable. It also allows for the better enablement of the emerging (and truly transformational) B2B2X models that telcos are beginning to seriously embrace. And for those clever telcos in a position to see their future beyond just the telco model, it sets in place all the tools needed to be successful leveraging their established customer base, relationship and experience to become multi-service platforms.  

The next Uber, Netflix, AirBnB will not need any strategic billing advantages, but it will need digital engagement capabilities.  

Read more on disruptive.asia

Contact Us