Written by Oliver Rowe, founder and CEO of Fusion Communications
As corporate customers are presented with a growing choice of solutions to fit their telecommunications needs, to maintain a competitive edge, providers must look for new opportunities to position themselves as strategic partners.
Those in the industry are learning quickly that they must go beyond the standard connectivity services offering to survive and thrive in an increasingly digital age, but can they shift focus and innovate quickly enough?
Business behaviour is rapidly changing with the dramatic growth of hybrid meetings and cloud first strategies, and companies’ total spend on traditional connectivity services is expected to decline as communications activity continues to evolve.
As technology innovation accelerates, more digital start-ups are also entering the market and proving their ability to provide similar, yet increasingly pioneering, connectivity products and, as a result, many traditional telecommunications providers have been left wondering if they can keep up, or if they will be displaced.
A change in demands
The B2B sector is growing quickly and, as digital continues to proliferate the telecommunications industry, partially spurred on by the pandemic, they are looking for more specific service requirements from their providers.
This leaves unprepared telecommunications providers in somewhat of a paradox, as digital is more than just the enabler of entertainment and social communication, but rather a crucial instrument that aids this change in business demands.
In terms of the consumer, according to research from McKinsey, 45% of millennials and Gen Z-ers are turning to social media as their primary way of accessing customer service, leading many businesses to switch to a ‘digital first’ approach.
With digital markets beginning to dominate, the door for more over-the-top [OTT] services is wide open, and the digital natives now offer the same staple service of voice, messaging, and video calls that was previously traditional telecommunications providers’ domain.
OTT services, such as FaceTime, WhatsApp, WeChat, and even Facebook, threaten to overtake staple offerings due to their user friendly, innovative, and attractive messaging and communication capabilities.
When customers take stock of the quality of their connectivity solutions, they are no longer strictly comparing service across standard telecommunications providers, but across their experiences with digital-native OTT services.
The question is, how can telecommunications survive and embrace the nature of these changes to thrive in the face of digital disruption?
Now is the time for providers to crack open their business models and reconfigure the pieces, to build on services previously provided and offer something new. But they should act quickly, as new rivals with little connection to the telecommunications industry are fast encroaching on the sector.
The rise of OTT and app technology
Digital disruption is continuing to reshape the communications landscape, and telecommunications providers should embrace the change as opposed to shying away from it, if they want to avoid letting digital-native start-ups run away with new digital business model ideas. In fact, providers are well placed to create value in the industry if they recognise and seize the opportunity.
With OTT services, businesses can access services anytime and anywhere via in-app devices and, as digital natives have acquired deep and detailed understandings of their customers through the likes of cookies, they are ideally positioned to deliver an experience tailored to individuals’ needs and preferences, in real time.
Additionally, transparency and simplicity are a priority for users, as intuitive, self-service tools now make it easy for them to interact with their provider, and even form shared-interest user communities.
Telecommunications providers that remain complacent risk losing out to tech-savvy start-ups, but those willing to move with the times will stand the best chance at fuelling business growth and creating potentially high-value, innovative models.
But first, they will need to consider the challenges of their current business models, and how they can use the rise in digital to their advantage.
The beginning of a new relationship
Prior to the industrial and digital revolutions, which have seen the creation of smartphones, 4G, and now 5G, telecommunications providers provided the primary infrastructure for staple services.
However, in recent years, the app-based economy grew tenfold with its ability to connect to customers on the go, and businesses began moving from voice-based telecommunications solutions to digital and app-based technology, particularly with the evolution of remote and hybrid work models.
Apps cannot stand alone and distance themselves from the traditional telecommunications network, and there is an opportunity for both parties to form a symbiotic relationship.
With the continued rollout of 5G, the requirement for the traditional communications infrastructure will increase multi-fold, and telecommunications providers have a chance to utilise Network Function Virtualisation [NFV], Open Radio Access Network, and Open Network and Automation Platform [ONAP].
The telecommunications economy is set to expand exponentially and take new forms, and providers will have to keep pace in rolling out new infrastructure on-demand as the world moves into 5G and beyond.
While the app industry could argue that telecommunications providers are contracted to provide services and data to their subscribers, like app companies, they are obligated to their end customer, and should continue to adapt their infrastructures and innovate to provide 99.9% connectivity.
Conclusion
Telecommunications providers need to adapt promptly to benefit most from the digital economy. There is no doubt that traditional telecommunications services are disintegrating, presenting several challenges for providers.
OTT services are out innovating traditional telecommunications due to their fully digital, high-quality user experiences, but the growth of 5G is a lifeline that presents opportunities for growth in traditional telecommunications.
Most apps are now in Public Cloud domains and prefer to be in a cloud network with less latency, and lower latency will be the key to many services.
If they want to continue to thrive in an increasingly digital world, telecommunications providers will need to think and act like a Cloud Service Provider going forward, providing a robust infrastructure and associated tooling capabilities.
