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Telecoms industry plays a critical role in supporting digital transformation

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By Shiletsi Makhofane

The telecoms industry is well aware that digital transformation will forever change the way in which we interact with our customers. However, there is still a significant amount of scepticism about the true impact and speed of digital transformation on more established businesses.

The telecoms industry is a perfect example of this trend in that it plays a critical role in supporting digital transformation across industries, but it can also unlock significant value through its own digital transformation.

Truly digital telcos will be able to develop new ways of working using new IT architecture that seamlessly connects front-end with back-end technology. It means a higher level of business assurance by protecting revenue and preventing fraud.

One of the stumbling blocks along the way to digital transformation is that many executives still feel that business models created by disruptive companies like Uber are not realistic for their specific operations. Others are hesitant to kick-start programmes without the skills, financial support, investment model, patience, and culture to succeed.

The Digital Transformation Initiative by the World Economic Forum, WEF, analysed the impact of digital technologies on industry and society. In its latest telecommunications report, the WEF identified four broad digital themes with the potential to unlock $2 trillion in new revenue opportunities for industry and society:

*Networks of the future – is about virtualisation and its promise to fundamentally change how networks are built and function.

*Beyond the pipe – focuses on how technologies such as Internet of Things (IoT), virtual reality (VR) and reimagined models of digital communication can extend revenue streams beyond connectivity.

*Redefining customer engagement – highlights how companies who delight consumers with high-quality digital experiences will ultimately win their loyalty.

*Bridging the innovation gap – is about the demand for rapid innovation and its requirements for new innovation models and strategies for a digital workforce.

From 2016 to 2025, gains in the telecom industry are expected to exceed $1.2 trillion in cumulative operating profit. Similarly, the value for society is expected to exceed $800 billion – the majority of which will come from connecting billions of people who are still unconnected to the internet.

What’s important to highlight here is that although digital transformation will look different for every company, we must understand how integration of digital technology into a business results in changes to how that business operates and delivers value to its customers. Beyond that, it’s a cultural shift that requires regular experimentation and becoming comfortable with failure.

Telcos face a rapidly changing economic and competitive landscape driven by internal and external digital disruptions. The role operators have played in accelerating digital business and service models has not translated into new value, with their market share declining from 58% in 2010 to 47% in 2015, and forecast to drop to 45% in 2018. Pressure on traditional revenue means it is increasingly important for operators to consider new digital business models to ensure they share in the value from digital transformation.

For larger, established organisations, digital transformation is a massive undertaking, but when done right, will result in businesses that are more aligned with customer demands and be more resilient in a constantly changing digital future. Four imperatives for industry and policy-makers include the following:

*Network transformation will be necessary to enable new business models beyond the pipe and address changing customer expectations.

*New business models adopting emerging technologies will require strong collaboration with vertical industries and internet platforms.

*Operating in the digital age requires a corporate culture change along with new organisational structures.

*Digital transformation will require an adjustment to existing policy and regulatory models.

The next decade of digital transformation will look significantly different from the past. Telecoms companies will need to be well prepared to take advantage of the sweeping transformation happening in consumer’s lives, within enterprises and across the broader economy.

 

 

 

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