Telco to Techco: Engineering growth beyond connectivity

The telecom industry has, in recent years, been defined by slowing subscriber growth, declining Average Revenue Per User (ARPU), intensifying competition, and shrinking margins.

Market saturation and the limited ability to generate fresh revenue from traditional connectivity offerings have placed telecommunication companies at a disadvantage, even as they continue to invest heavily in nationwide and global infrastructure.

Meanwhile, technology companies—ranging from hyperscalers and over-the-top providers to artificial intelligence specialists and digital-first platforms—have captured the bulk of new value creation.

They have done so through software, data-centric services, and scalable platforms. In contrast, many telcos have found themselves reduced to the role of connectivity utilities, essential but increasingly marginal in the broader digital economy.

As basic connectivity becomes commoditised and demand for digital solutions accelerates, telecom service providers worldwide are reimagining themselves as diversified technology companies.

This shift has become a defining global trend, with virtually every major operator pursuing a transition to techco models to secure sustainable long-term growth. Industry estimates suggest that nearly 90% of operators are now investing heavily in capabilities such as artificial intelligence (AI), cloud, edge computing, 5G/6G evolution, and big data analytics to become more agile, customer-centric, and platform-driven—much like the technology giants that currently dominate digital value chains.

Foundations of the Telco Transformation

The shift from telco to techco is anchored in a set of foundational levers that reflect how operators are reinventing their business models, operations, and value propositions.

A central element is the cloudification of networks, which enables operators to orchestrate scalable, software-defined infrastructure. By shifting to cloud-native architectures, telcos can innovate faster and offer higher-margin, on-demand digital services. This capability has been fundamental to the rollout of 5G, where cloud-driven core networks underpin new enterprise and consumer applications.

Another key driver is the monetisation of network infrastructure through Network-as-a-Service (NaaS). By exposing programmable capabilities—such as dedicated bandwidth, deterministic latency, and quality of service (QoS)—operators are enabling new use cases across sectors, including autonomous mobility, remote healthcare, industrial automation, and more.

This shift allows telcos to extract greater value from their existing assets while enabling enterprises to build sophisticated digital services with telecom networks embedded at the core.

The diversification of services is accelerating as operators move beyond traditional connectivity. On the enterprise side, telcos are expanding into cybersecurity, cloud services, IoT platforms, managed solutions, and AI-powered offerings, all layered on top of flexible, cloud-first networks.

On the consumer side, digital services such as mobile payments, digital wallets, home security, gaming, AR/VR experiences, and bundled content ecosystems are emerging as new growth engines.

Customer-centricity forms another crucial pillar. Operators are increasingly using data analytics and AI to generate deeper insights into customer behaviour, enabling them to personalise offerings, reduce churn, enhance engagement, and deliver proactive support.

Alongside this sits the growing adoption of AI and automation across core and support functions. Whether optimising network performance, predicting outages, streamlining maintenance, or enhancing customer service through intelligent assistants, AI is reducing operational costs while improving QoS.

Success in the techco era also hinges on a renewed focus on talent. Operators are competing for specialists such as product managers, user-experience designers, data scientists, AI engineers, and cloud architects. Many are redesigning internal training programmes, revamping talent strategies, and collaborating with technology partners to bridge persistent skill gaps.

Finally, ecosystem building is emerging as a competitive differentiator. Partnerships with hyperscalers, technology providers, AI innovators, and start-ups are becoming essential to accelerate innovation, pool capabilities, and bring integrated solutions to market faster than traditional telco-only approaches would allow.

Global Momentum, Emerging Differentiators

Operators across regions—including e& (formerly Etisalat), Orange, Telefonica, Singtel, NTT, Reliance Jio, Airtel, and Vodafone Idea—are already deep into this transition. However, what truly distinguishes a techco from a traditional telco is not the network’s sophistication alone. Rather, it is the ability to reshape that network into an intelligent platform for delivering personalised, on-demand, innovative digital products and services.

This makes the intelligent use of data a decisive factor. telcos must be able to harness data from every part of the organisation—networks, channels, touchpoints, and operations—and apply AI-driven analytics to elevate customer engagement, improve network performance, and strengthen business and customer support systems.

Through this, operators can craft targeted campaigns that reflect real customer needs, enhance acquisition and retention, and deliver measurable business impact across departments. AI-enabled capabilities such as virtual assistants and chatbots are already improving service quality by offering instant, contextual responses.

Delivering Zero-X, Right-X Experiences

As this transformation gains pace, industry frameworks such as those articulated by TM Forum are becoming useful guideposts. Ultimately, sustainable growth in the techco era will depend on an operator’s ability to deliver “Zero-X” experiences—zero wait, zero trouble, and zero touch—through “Right-X” engagement, where the right offer meets the customer at the right time in the right context.

Achieving this demands pervasive AI adoption across the enterprise, embedded intelligence within networks, and an operating model designed for continuous digital innovation.

The telco-to-techco journey signals not only a strategic shift but a deeper realignment of the telecom sector’s role in the digital economy. As operators embrace platform thinking, intelligent automation, and ecosystem-led growth, they are positioning themselves to reclaim value, create new revenue streams, and compete on equal footing with the technology giants that have long defined the digital landscape.

The author is a Partner at Deloitte India.
(The views are personal and do not reflect organisations he is associated with.)