Leading analyst firm OMDIA (formerly Ovum) has published some interesting news and views on the evolution of the telecoms industry to which we can add a few thoughts of our own from Evolving Systems.
OMDIA noted that the proliferation of high-speed broadband networks, the increasing amount of time we're spending online, and the shift to further services digitization means Communications Service Providers have never had a better opportunity to take advantage of the move to connect and digitize people, behavior, and processes.
Advantages, however, are one thing. Leveraging them is another. Therein lies the challenge. Sure, service providers that offer the best network experience, design tailored and engaging digital propositions (health and wellbeing-based loyalty programs etc.) and form relevant partnerships to offer exclusive and innovative service will gain the most in this major societal and economic transition. But how do they execute?
OMDIA notes that, as operators move towards 5G in developed markets and wider availability of LTE/LTE-A in developing markets, network excellence has never been more important for winning and retaining the most valuable subscribers. Innovation around services offered, and how service providers charge for them, will increasingly drive consumer choice.
Alongside this, industries, governments national and local, and enterprises are all pushing further into the connected digital domain. This makes it critical for service providers to be able to offer the best network experience, and the ability to add value to companies in other industries who will be able to increase their relevance in the digital value chain.
The expanded range of opportunities available with 5G and related technologies, such as edge computing, means that operators will be able to differentiate around the kinds of network experience and capabilities they offer, particularly for the enterprise markets and specific industry verticals. Meanwhile, service providers that have spent considerable resources acquiring both fixed and mobile capabilities have to start making good in 2020 on the promises of convergence, particularly at the service level.
If this is the reality, for CSPs what does it mean? There are four basic conclusions:
- Network experience, already important, will become even more critical as 5G service providers respond to network complexities and opportunities. Operators are facing unprecedented levels of network complexity and those who deal with it the best will be able to offer end-users a better experience and with more efficiency. In the consumer market, a better experience will help to attract more higher-value users. Meanwhile, in the enterprise and industrial markets, service providers who master network complexity will be best placed to target a diverse range of niche customer needs.
- The leading CSPS have already embarked on fundamental network transformation, setting the pace for rivals. In 2020 the gap between service providers will increase between those who have successfully deployed the latest technologies - such as the latest 4G and 5G standards and complementary technologies such as network security, AI for customer care, mobile edge compute, and cloud core - and those who haven't. Even between technology frontrunners, the vast range of technology options and ways to implement the same technologies means that there will be stronger players in some markets than in others. Service providers of today who don't maintain some degree of technology and network parity with market frontrunners will, as in the past, leave themselves open to acquisition.
- This year, partnerships will become even more vital for service provider differentiation. As network capabilities open up a significantly expanded range of opportunities for telcos, the need to work with experts in other industries and areas will become more compelling. The need to partner spans the entire ecosystem; from content partnerships to technology partnerships to collaboration with players that enable telcos to reach into new vertical segments.
- Amid market and operational upheaval in 2020, core telco functions will remain critical. Service provider pricing, marketing, customer service, and market positioning will remain the principal points of contact for most consumers. As such, telcos that outperform rivals in these areas will stand to gain as much as in the future as they have in the past in terms of signing-up and retaining the most valuable customers. A consequence of operators becoming stronger at the expense of others will (as happened before) be further consolidation, especially in markets where regulation allows, and that have four or more players.
To some extent the current COVID-19 pandemic, in which many CSPs are playing a leading role in enabling mass communications and the dissemination of critical health-related information, provides a window into the increasingly influential societal role they will be able to play as network technology advances proliferate. When life returns to normal, the opportunities for CSPs to embed this critical and central role in the longer-term by fully leveraging advanced networks will be a massive opportunity. At Evolving Systems, we see this reality now in how our clients have adapted our loyalty platforms to deploy COVID-19-related Use Cases. These creative deployments are just the start.
By Xabi Miqueo and Keith Brody