Telco’s transformation strategies to become Digital Service Provider

The telecom industry, in particular, is coming to the realization that a whole new business model is critical to survival and growth in the digital economy. In order to sustain, communications service providers CSPs now have to plot a course towards becoming digital service providers (DSPs).

The World Bank’s new report, “Digital Dividends,”questions widely held assumptions about the benefits that digital technologies and services are bringing to people and businesses across the world. The internet and related technologies have reached developing countries much faster than previous technological innovations. For Indonesia to reap the benefits of steamships took 160 years after their invention and for Kenya to have electricity, 60 years; but for Vietnam to introduce computers, only 15 years. Mobile phones and the internet took only a few years.

More households in developing countries own a mobile phone than have access to electricity or improved sanitation.  Greater internet access has led to an explosion in the production and consumption nearly 70 percent own a mobile phone. The lowest mobile penetration is in Sub-Saharan Africa (73 percent), against 98 percent in high-income countries.

The human workspace in 2025 is not only a post-PC environment, but one that is augmented digitally. It is entirely adaptive to its user: cognitive of location, mobility, device, and desired digital interaction.

What will the future communications service provider look like in the converged digital world? Like companies in most industries, there are service providers lagging in current performance and there are others who are excelling beyond expectations.

In order to transform from telecom to ‘digital service providers’ – Telco’s need to tap the digital economy. Below are few areas to focus in next 5 years.

  • Mobile financial services – Includes mobile payments, mobile wallets, mobile banking and money management initiatives. Mobile financial services
  • Mobile health – Includes consumer-oriented remote patient monitoring, telecare, fitness and wellness devices, apps, and services. Mobile health
  • Cloud services – Includes storage, service hosting, and remote content management for consumers. Also includes OTT services like zero-rated apps and other types of app-based pricing, as well as OTT apps published by operators. cloud services
  • Mobile commerce and advertising – Includes point of sale (POS) and customer-not-present (CNP) (for example, online commerce–transaction enablement services, as well as  mobile marketing, couponing and loyalty solutions. Mobile commerce and advertising
  • Smart homes – Including smart energy management, home automation and security. smart homes
  • Mobile agriculture – The provision of content, connectivity or services to support and enhance agricultural activities, or the sale and distribution of agricultural products. mobile agriculture
  • and many more

The balance of power (i.e., money, growth, market influence and value) in telecom is shifting to content, Internet, cloud and Wi-Fi companies. Does the SME & Enterprise customers moving from big giants (such as AT&T, Verizon, T-Mobile, etc.) to Google, Facebook, Amazon, Cablevision, Scratch Wireless, etc.

Transformation requires more than technology. It also demands leadership. 

As per IBM article, While infrastructure changes are important parts of the conversion to a digital service provider, technology alone is not the most critical driving force. To become a truly successful digital service provider, transformation activities must run throughout the enterprise, starting from the top.

The primary sponsor would likely be the CEO, leading the entire organization towards a common vision of the future. The CEO is in the best position to embrace opportunities for
future growth and understand the totality of effort required to achieve success. In addition, the CEO can serve as a mentor for workers and an evangelist for the bold choices required to facilitate such a major change.

Additional valuable transformative direction also originates from the Line of Business MDs, Consumer Business Manager, Chief Data Officer, Chief Digital Officer, Chief Customer Officer and Chief Marketing Officer. Each brings a unique perspective to the overall transformation to DSP, helping facilitate the business and technological changes required as well as uncovering new business models.