Communications service providers (CSPs) are investing in the promise of digital transformation. As 5G is projected to add $1.5 trillion to the global GDP by 2030, and AI-driven technologies are expected to cut operational costs by as much as 30%, these technologies still have much to deliver for CSPs waiting to realize returns.
In the latest Tech Talk with CSG, industry experts peeled back the massive surface opportunity of 5G and AI to address the underlying complexities that can hold operators back from achieving progress. By directing their efforts toward evolving into network companies (“NetCos”) and platform-driven service companies (“ServCos”), panelists believe that CSPs can overcome roadblocks and grow revenue.
Isabelle Paradis, founder and president of Hot Telecom, led the conversation between featured speakers:
- Chad Dunavant, EVP and chief product & strategy officer, CSG
- Dario Talmesio, research director, service provider strategy & regulation, Omdia
- Rahul Kumar, senior partner & global industry leader for telco, IBM Consulting
Panelists discussed the most pressing challenges for operators, attainable steps they can take to start solving them now and how technology can help. If you missed the webinar or want to watch it again, you can access the recording here.
See the recap below for the experts’ top insights and three ways CSPs can embrace the telecom shift to NetCos and ServCos now.
Critical Challenges Faced by CSPs
Panelists highlighted one of the fundamental challenges for CSPs: the heightened pressure to tailor offerings. They emphasized the importance of rising to customer expectations, which have been shaped by mainstream digital brands like Uber and Netflix—and fast. “I don’t think telecom operators have a lot of time left to stop and think about what direction to take,” Dario Talmesio warned. Customers understand that advanced insights from technology like AI are available to CSPs, and they expect them to use this data to offer the personalized and efficient experiences they’ve come to know.
Rahul Kumar also stressed the delicate balance operators must maintain between pursuing growth objectives and competing priorities, like customer centricity and data security. Keeping a dual focus on driving innovation and guarding customer data is imperative for CSPs to earn their continued trust and loyalty.
Panelists unpacked another major challenge for today’s operators: realizing returns on their substantial investments in digital transformation.
“They’ve invested a ton of money in network infrastructure and moving to 5G and getting systems in place, Chad Dunavant said. “That hasn’t led to this massive increase in revenue. And then the question is, why?” He went on to propose that the answer lies in CSPs’ monetization strategies. Instead of working to convince people that they need more of what they already have by offering faster speed at the consumer level, Chad suggested that operators may fare better shifting their efforts to the enterprise space and monetizing the network. The question for operators then becomes how to participate in new ecosystems and implement the necessary systems to support such a transformation.
How Technology Can Help CSPs
To overcome those top challenges, CSPs need to embrace technology in ways that meet customers’ needs and win returns on network infrastructure investments. Applied strategically, tools like AI can improve much more than operational efficiency. Panelists discussed the transformative potential of several technologies, including:
- AI and automation: CSPs expect AI to help them slash operational costs, but panelists also challenged them to apply it toward maximizing customer engagement to differentiate their brand and stand out in the digital-first market.
- Cloud architectures: Moving to cloud gives CSPs more agility to test new things quickly and cost-effectively. For data that is subject to changing regulations and security standards, they can apply a hybrid cloud approach to those workloads.
- Quantum computing: As cyber threats become more sophisticated with widespread use of quantum computing in the not-too-distant future, CSPs should proactively secure data with quantum-safe techniques to protect assets when the capability becomes available.
3 Strategies to Embrace the Telecom Shift Today
Time is of the essence—operators shouldn’t wait to start taking steps toward NetCo and ServCo business models. During the webinar, panelists recommended three mindset shifts that can set CSPs up for success as they address industry challenges.
Start small to stay agile
Pick one part of the business to become digital-first, Chad advised. Many operators are working within legacy infrastructures, and it may be impractical—or intimidating—to transform the entire system at once. Instead, prioritize a single concept and modernize it in a quarantined ecosystem.
Approaching the digital-first journey in stages allows operators to test it more quickly and safely than attempting to apply it to the larger organization.
Look beyond connectivity
Panelists agreed it’s time for telecoms to reorient the business model. That may look like venturing into wholesale offerings as a NetCo, but it could also mean pursuing any opportunities to offer products or services in a way that is easily consumable for end users. For instance, Dario pointed out that some operators are catering to enterprises by selling energy products.
Operators can embrace this strategy by asking themselves what additional services they can provide beyond connectivity. In broadening their scope of offerings, they can change the public perception of CSPs and ultimately grow the business.
Prepare for disruptions
Rahul referenced an internal IBM study that predicts the world will see greater natural and geopolitical turbulence in the coming years. “As the custodians of their customers’ trust and confidence and their guardians of connectivity, operators need to start thinking about, how do you anticipate these turbulent events?” He emphasized the need for network resilience so that operators are prepared to quickly pivot and restore connectivity in the wake of major disruptions.
It’s Time to Start Reimagining Telecoms
Operators must begin to reframe their roles from pure connectivity providers to resilient NetCo and ServCo entities, the panelists urged. By embracing new technologies and broadening their scope of offerings, operators can push back against limiting perceptions and position themselves as valuable partners in the digital ecosystem. This strategic pivot will not only secure their own future, but also elevate the entire telecom industry.
