Telcos, change your mindset to make the digital leap!

Historically, telcos (telecom operators) defined themselves as Communication Service Providers (CSP). Most of their business expansions have been in allied areas – moving from fixed line to broadband or adding a TV service. But with voice and data revenues stagnating,

CSPs are looking for new avenues of growth, offering new services that will propel them to the future and enable them to compete with tech companies.

Today, many CSPs are offering newer services like digital content, financial services, marketplace, etc., to generate additional revenue. The transition to Digital Service Provider(DSP) from CSP is well and truly on.

But being a true DSPneeds a significant mindset shift. CSPs can learn from tech companies such as Amazon, Google and other large digital players on what is required to succeed in the digital age.

Let’s discuss the key factors enabling a successful transition from CSP to DSP.

A holistic transformation

In addition to above business needs, DSPs need to build robust new-age technological systems to enable a seamless transition from a communications player to digital.

Data-driven initiatives

While analytics/AI/ML have been the buzzwords in new business, the maturity of data-led initiatives differentiates successful DSPs from the laggards. Data accuracy helpsdetermine customer needs, the way products/services are consumed, early responses to evaluate disruptive ideas, and so on.

A robust data intelligence framework gives complete visibility into user or product journey, and helps respond in near-real time. And there are financial advantages too! Industry research showsdata masters drive more profits and revenue compared with other cohorts – they command 70% higher “revenue per employee” compared with others, and are 22% more profitable than the average.

Ecosystem integration

DSPs need to play an anchor role in bringing together an ecosystem of partners for specific sector solutions. For example, for a mining surveillance solution, cameras and IoT sensors need to be integrated with hardened network devices.

They should be brought on a private/5G network feeding into an AI-enabled platform with a shared command center for surveillance and integrated with various alert mechanisms.

An open integration architecture helps ecosystem partners to integrate seamlessly and help to provide/access relevant data for their respective KPIs.

Flexible IT architecture

From Omnichannel to Digital First to Digital Only, digital expectations are evolving. This, plus the success of new initiatives, are highly dependent on flexible internal business and operations support systems, and an IT architecture that can adapt quickly.

For example, a flexible charging/billing architecture is a must to support the launch of disruptive products and services. Increasingly, multiple sector-specific products will demand newer usage-based charging models that the current architecture struggles to deliver.

While legacy and monolithic architectures can’t be replaced overnight, a clear understanding of architectural bottlenecks, available workarounds and modernization plans is necessary for continuous improvement of products and services. This should be set in place alongside a sound transition plan to ‘change the wheels of the running car.’

In conclusion, it may be said that the successful modes of working of the past may not yield the same results in future, but the core CSP services are still driving the bottom line. A successful transition from CSP to DSP will need disruptive thinking, deep customer understanding and modern tools.

To be successful, DSPs should develop an interconnected ecosystem where enterprise partners can optimize earnings through business integration. What will be required is a fine balance to stay the course for the core services, while investing in newer digital offerings to be successful in the long run.

• Dheeraj Toshniwal – Senior Director and Consulting Partner – Capgemini Invent India