When cellphones first hit the big time, the carriers we chose (if we even had the option) were often the cheapest we could get with the coverage we needed to make a call. Now, we 100% expect to stream our favorite shows with our smartphone, play the latest games, live video chat, even pay for food with it. Making a phone call is the least of its uses. And forget cost, it’s bandwidth and speed that are quickly becoming the main factors for which carrier to choose, and there are a lot to choose from.
It’s a true reminder of just how innovative and competitive the telecommunications industry must be. Every other year it feels like there’s a major change. And that’s just for consumers. The industry itself is in a constant state of disruption and the coming years are set to be transformative.
The industry can, however, turn this disruption into opportunity by embracing change, emphasizing creativity and agility, and becoming a truly customer-centric business. This requires developing digital solutions that meet basic needs and provide positive experiences, 24/7/365.
But with increased competition from diverse providers (local and global), changing customer expectations, too much churn, and new devices appearing every day, where do CIOs, product managers, and digital product developers, even start?
This whitepaper looks at eight essential areas you must consider to create a lasting impact with your digital solutions and build a streamlined, future-ready business:
- 5G, 6G, and Wi-Fi 6 – connectivity is everything and these new generations of network technology offer huge opportunities as smart devices and streaming surge in popularity.
- Big Data Analytics – data is collected from every device and that means using it to find actionable insights to develop solutions that improve the customer experience and reduce churn.
- Edge computing – develop a fast and low latency infrastructure that’s right where your end users are located, generate new services (such as cloud provisioning), and create new opportunities.
- The Internet of Things – as 5G and edge computing adoption grows, so will the number of connected smart devices and this opens up multiple possibilities to develop your own IoT-based services and products.
- Cybersecurity – staying on top of security issues is essential to build trust. But there are also revenue opportunities, such as Security-as-a-Service.
- Agile services – meeting ever-changing experiences means updating to a highly agile, cloud-based microservices architecture. It won’t be easy, but the benefits are immense.
- Personalization – getting to know your customers and meeting their expectations builds loyalty and reduces churn. But you have to do it at every stage of their journey.
- Process optimization – maximize what you have to boost your competitiveness and ensure you can quickly develop products and services that deliver impressive results.
“For those willing to embrace disruption and develop a customer-focused mindset, the opportunities are immense. Success is definitely on the line.”
Georg Hansbauer, CEO & Co-Founder, Testbirds
An industry at the crossroads
Changing technologies, increased competition, and the rush towards digitalization are bringing new challenges and opportunities to the telecommunications industry. To survive and grow, CIOs, CTOs, and Digital Product Development Teams – in fact, the entire business – must be innovative and creative. There won’t be any room for those who aren’t.
New capabilities, agile business models, and a service-based mindset are essential to those looking for a competitive advantage. Especially because the industry must now deal with a range of disruptive technologies and new challengers. Voice over Internet Protocol (VoIP), online services like Skype, Zoom, and Facetime, and a vast number of competitors offering Over-the-Top (OTT) solutions.
Additionally, fiber optics are providing fast internet access at home, there’s edge-computing, 5G, IPTV, the Internet of Things (IoT), ‘the cloud’, and ever-changing customer expectations – arguably the industry’s biggest challenge. When customers can switch providers at the click of a button, meeting their needs is important to reduce churn.
This is made more difficult because the industry is in a highly disruptive and quickly evolving environment. A thousand different things need attention, regulations are constantly changing, and millions of individual needs and wants must be addressed.
Moving forward, this requires telecom providers to deliver more individualized network services and become more customer focused. To increase their digital transformations, focus on sustainability, and develop agile strategies so they can quickly take advantage of changing trends.
This can include using collective intelligence, which brings large groups of people together to share knowledge and skills, and swarm intelligence1, which utilizes artificial intelligence to mimic the behavior of animals (flocking birds, swarming bees, ant colonies) to gain insights into processes and ways to increase efficiencies.
Telecoms must embrace this new digital future and develop services-based strategies because, as noted by Innosight2, “If incumbent carriers fail to do so, then non-carrier service providers and systems integrators will continue to fill the void, fulfilling customer needs and creating enormous value by offering virtual network functionality that rides on the carriers’ ‘dumb’ pipes and ‘best efforts’ services.”
With this in mind, let’s take a closer look at the eight opportunities that are set to make the biggest impact over the coming years. But to be successful, all must place the customer at their core.
5G, 6G, and Wi-Fi 6
Constantly gaining momentum, 5G is predicted to account for nearly half of all mobile subscriptions by 20273. For those using smartphones or tablets to play online games, stream 4K movies, take video calls, or utilize any range of mobile and cloud-based services, 5G is an obvious choice. Up to ten times faster than 4G4, with much lower latency, it delivers outstanding speed and reliability.
It is also boosting the Internet of Things with its ability to seamlessly connect multiple devices and being used by organizations via 5G private licenses5 to run their own exclusive networks.
Currently, 4G is still the most used mobile phone technology, but as with 3G being progressively phased out6 from this year, it will soon be ancient history. With 5G there are no limits to its use for both consumers and multiple industries, including transportation, public services, and healthcare. This will open up multiple opportunities for digital product developers.
One, as noted by Deloitte7, could be to provide security services: “As operators have taken steps to evaluate and minimize threats arising from 5G and software-centric networks in their own organizations, they are in a unique position to offer 5G security services to enterprises seeking to deploy their own advanced wireless networks.”
But just as 5G is hitting its stride, 6G is already on the horizon. Expected to be 100 times faster than 5G, it’s set to deliver near-instant connectivity and is certain to be a massive catalyst for the Worldwide Wireless Web (WWWW)8 and the Internet of Everything.
From 3D video and communication, the metaverse, enhanced wireless broadband to ultra-low latency communications, virtual-and-mixed-reality, and much more, 6G will enable connectivity like never before. Digital product managers and their teams should keep this firmly in mind.
But wired isn’t going anywhere. This surge in connectivity is seeing an increased need for the deployment of more broadband networks. And this means fiber optics and their extremely fast transmission speeds.
Not only do 5G solutions really on them (via cell sites and access points), but wired networks, and Wi-Fi solutions. This need is expected to see the global fiber optics market size to reach US$11.18 billion by 20309.
However, meeting future broadband demand requires a massive amount of fiber to fully reach all high-density, suburban, and rural areas. In the US alone, this will require an estimated $130-150 billion fiber infrastructure investment10. As fiber density increases where customers live, more people will gain access to faster, more affordable, broadband.
This will see Wi-Fi 6 gain in popularity with its superior connectivity, speed (9.6Gb compared to Wi-Fi 5’s 3.9Gb), and security. Its improved throughput11 will be essential as more cars, homes, offices, and cities connect with each other and a vast number of smart devices.
Then consider Wi-Fi 6E, which will enable compatible devices to use the 6GHz frequency band. This will provide 1200MHz of bandwidth, which is ideal for delivering high volumes of data, and reducing traffic congestion and interference.
The potential revenue streams of ‘connectivity everywhere’ (especially with Networking as a Service, IoT devices, and industry applications) will be immense. The telecommunications industry must be proactive and develop these solutions themselves.
It is, however, essential to ensure that every device connects and performs as expected in any location. Usability and UX testing in real-world conditions can ensure it does.
Big Data Analytics
From usage statistics, call records, server logs, billing, data from connected devices and more, telecommunications companies deal with an exceptionally large amount of digital data. Globally, the amount we create, and use, is forecast to reach 181 zettabytes by 202512. That’s 181 trillion gigabytes (consider that against an average laptop’s 250 gigabyte storage capacity).
As an industry that’s used to dealing with massive amounts of data, telecommunications companies are in a unique position to make the most of this data. Communications services providers, in particular, are ideally placed to capitalize on this digital gold mine by turning that data into intelligent, actionable insights.
To effectively do so, the right tools are required to control, secure, and efficiently process data, wherever it comes from. And that means considering the five V’s of big data13: Volume (the size of the data), Velocity (the speed it is accumulated), Variety (is it structured, unstructured, or semi-structured), Veracity (its quality, credibility, and accuracy), and Value (the insights gathered).
With the right analysis, it is possible to identify where network services and processes can be optimized, to enhance the customer experience (plus reduce churn), discover areas that need more security (such as fraud detection), and define key performance indicators that impact their business while making improvements that drive growth.
Big data is by no means new but the depth and speed at which organizations can now analyze the data is increasing exponentially.
This will drive data-led innovations and enable product teams to develop solutions that can effectively compete against OTT and cloud providers, and whatever new player may appear.
As with fiber optic density bringing broadband closer to customers, edge computing is bringing data computing and storage closer to where it is needed. This saves energy, costs, bandwidth, lowers latency on applications, improves security, and ensures high scalability. Local regulations can also be more easily met as everything is placed closer to where data is actually processed.
As Ericsson noted, the opportunities this can deliver to the telco industry are immense because operators “are ideally positioned to deliver intelligent traffic routing from the mobile network to the optimal location of the enterprise application.”14 This was also expanded on by IBM-subsidiary, Red Hat, who stated that “Virtualizing network functions allows telcos to abstract functions away from hardware, allowing standard servers to be used for functions that once required expensive proprietary hardware.”15
For IoT devices, this is especially relevant. By easing network bandwidth requirements, edge computing can greatly boost response times, reliability, and data processing. This is driving IoT development. By 2025, Gartner predicts that 75% of enterprise-generated data will be “created and processed outside a traditional centralized data center or cloud”.16
This provides telcos with the ability to increase revenues from their services and networks. The challenge will be in developing the right edge business model that, as noted by Alpha Wireless, places ‘the benefits of caching and processing data close to the source’.17
In this way, as discussed in a recent STL Partners report, edge computing can help them “to extend their role beyond offering connectivity services and move into the platform and the application space.”18
As everything becomes connected, the expectation is for speed, security, and reliability. Edge computing is the affordable solution. But the industry must act fast. The number of online devices is growing every day and the amount of data stored, processed, analyzed, and acted-upon at the edge will continue to grow.
The Internet of Everything
The IoT market is huge and constantly expanding. By 2030, it’s expected to generate more than $1.5 trillion in annual revenue.19 This means a huge amount of consumer and business (especially B2B) focus will be on receiving exceptional connectivity.
For the industry itself, this will lead to opportunities for consumers, businesses, and for themselves. IoT technologies are already used to optimize resources and drive efficiencies. A prime example of this was AT&T using IoT to reduce facility costs and emissions, which resulted in annual savings of US$925,000.20
And as more consumers remain always-on, the demand for connected devices can only grow. These will spread throughout industries and communities, and be used within smart cities, industrial monitoring systems, smart cars, homes, buildings, and literally everything else.
We are rapidly approaching the reality of an Internet of Everything (IoE), where devices, processes, data, and people are all seamlessly connected and autonomously coordinated through the internet. The overall concept was nicely summed up by intellias, when using traffic systems as an example21:
“The road of the future is a place where self-driving cars are able to read data from the smart road infrastructure (connected cameras, traffic lights) miles ahead and self-optimize their routes to avoid congestion. In case of a traffic accident, a car or, for example, a smart helmet worn by a cyclist, will be able to accurately read the person’s vital signs, quickly assess the damage, contact the nearest hospital, report the exact location and patient’s status, then coordinate the arrival of an ambulance by ordering the traffic control system to clear a lane for it.”
The volume of IoE data being funneled through telecommunication providers is set to be immense. This can open up monetization opportunities as more organizations use data marketplaces22 to sell and buy data. It can also lead them to use their own resources to manage connected devices on their own networks.
But as everything connects and data becomes an ever-more valuable commodity, ensuring the highest levels of reliability and security is essential.
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The more we connect to the internet, and across devices, the more we become vulnerable to a range of security issues. These can be social engineering attacks (phishing, tailgating, scareware, etc.), malware, and dozens more23.
Such cyber-attacks are the inevitable result of our digital world. We work, live, shop, and study online, and our valuable data is present on multiple devices and the cloud. Not to forget smart homes, smart cars, smart cities. An individual may have passwords or their identity stolen, a business can be subjected to a crippling distributed denial of service attack, and communication networks can undergo substantial disruptions.
This means that ever-evolving and sophisticated cyber-threats require constant monitoring and engagement. Especially because the threats are changing. Information theft is still, as Accenture24 states, “the most expensive and fastest rising consequence of cybercrime’, however, attacks are increasingly about changing or destroying data. And they are happening across borders25 with increased frequency and complexity.
For the telecommunications industry, digitalization, combined with elevated levels of connectivity, makes them, and their customers, vulnerable to such cyber-attacks. As more disparate devices connect with each other, this is also giving attackers access to system vulnerabilities and networks. Moving forward, more holistic security strategies, including threat detection, prevention measures, ongoing testing, and more are necessary.
Consumers need to trust that their financial and personal data is secure, businesses want to avoid revenue losses and damage to their infrastructure and reputation, and telcos want to minimize any legal issues and noncompliance suits.
Minimizing such threats requires a multi-pronged approach:
- Invest in technology-driven security innovations such as AI and machine learning to analyze traffic in real time and report suspicious activities as they happen.
- Conduct comprehensive risk assessments along the entire supply chain.
- Provide awareness training of employees.
- Run comprehensive security testing, including bug testing and regression testing.
Attacks are becoming more intelligent and elaborate. Solutions to prevent them must be just as developed. But there are also revenue opportunities. One particular area could be the development and supply of cloud-based Security-as-a-Service26, where the telecom provider handles and manages a third-party’s cybersecurity.
Offerings can include security analysis, email security, web security, incident response, data encryption, and much more.
As more consumers and businesses demand a highly personalized, interconnected experience, and 5G increases the demand for artificial reality, virtual reality, and 3D video streaming, bandwidth needs are set to rise. As will the number of transactions and requests.
To meet this demand, delivery models must change, and legacy systems need to be replaced or significantly updated to a highly agile, cloud-based microservices architecture.
As defined by IBM27, microservices ‘compose a single application from many smaller, loosely coupled services as opposed to the monolithic approach of a large, tightly coupled application.’
And because each service can be easily managed and address a specific task, this reduces complexity and helps make network management and services (such as Business Support Services and Operations Support Services) become faster, more reliable, secure, and effective.
This will require telecoms, and of course product managers and their teams, to adopt a DevOps mindset (which is a combination of technology, processes, and people) to continually provide value to customers.28 And to be more dynamic and agile.
All of which can lead to offering Network-as-a-Service (NaaS)29 as a competitive alternative to interconnection providers and cloud infrastructure providers. To do so, according to ABI Research30, the industry must transform three key areas:
- Virtualize their network infrastructure to deliver cloud-native services
- Restructure business and operating models with a look toward openness and partnerships
- Develop a problem-solving culture and realign their ‘go-to-market’ strategy
Their research also expects that by 2030, nearly 90% of global enterprises will have migrated at least 25% of their network infrastructure to a NaaS model. As a cost-effective service that provides network services over the internet, its appeal is obvious for those wanting to cut costs on network hardware and maintenance.
In the coming years, for many organizations, flexibility to meet business needs, and most importantly the changing needs of customers, will become essential. Agile services can achieve this.
Customer churn is a significant issue and finding ways to retain customer is a priority for many telcos as they continue their digitalization journey. As more people become connected and competition for them increases, finding ways to retain them is a priority.
When it comes to attracting new customers, building loyalty, and reducing churn, telcos must embrace customer-centric, highly personalized strategies that drive people to a desired action31 and that provide maximum lifetime value32 throughout the customer journey.
To become creators of positive experiences and not just focused on gaining new subscribers and boosting market share. This will require technical solutions that can analyze data fast enough to make real-time decisions. And that means using AI, machine learning, edge computing, and cloud computing – all to quickly utilize today’s mountains of data to uncover actionable insights into customer behaviors and expectations. Insights that can also proactively help with strategic decision-making.
Data, and the ability to truly use it to personalize experiences, will be an ever-greater competitive advantage. Companies are increasingly capitalizing on this, as a recent McKinsey article33 expanded upon. That telcos must build a granular view of three things:
- The pivotal moments that can bring the most value during early life and acquisition,
- The “in-life” stage, and
- Retention and renewal.
The article continued that “To build this granular view, telcos must redefine their approach to customer segmentation, moving from top-down, hypothesis-driven macrosegments to bottom-up, data-driven microsegments. Traditional, top-down segmentation classifies customers according to a predefined set of hypotheses about the characteristics that will influence their behavior, like demographics and usage information. But an exploratory, bottom-up approach to segmentation can be much more fruitful, uncovering new variables that determine behavior. Microsegmentation is also key. By leveraging data and analytics, operators can create hundreds of thousands of microsegments. Eventually, each customer will become a segment of one—receiving curated offers and messages.”
This is becoming hyper-personalization, the convergence of technologies, real-time data analytics, customer-centric strategies, and modern marketing. Boosted by AI and machine learning, positive experiences can be instantly created from a broad range of data points, such as real-time behavioral data; unlike ‘normal’ personalization that uses a much narrower number of points like name and location.
The more personalized the experience, the better they can be streamlined and simplified, and that means digital product developers can build solutions that ensure customers are offered exactly what they need, at the exact right time.
For many organizations, this is all part of a truly customer-centric approach, where people aren’t just segments, and where customer lifetime value and retention can be increased.
For consumers, there are plenty of options when it comes to their telecom provider, however, for the providers that means a large number of competitors. All trying to catch the same customers.
This is where process optimization and network automation can make a difference by ensuring businesses can easily identify, analyze, design, and implement products and services that deliver best quality and efficiency. To maximize and streamline what you already have so you can become more competitive and productive.
Network automation is enhanced with AI-techniques and machine learning to greatly improve automation and provide the deep learning needed to optimize network performance in real time. Whereas process optimization, which can include the use of improvement methodologies like Lean34 and Six Sigma35, can use AI, machine learning, and process mining36 to reduce costs, create value, and improve the overall customer journey. For those running a heterogenous network37, this can make network planning more efficient.
To further improve processes throughout the value chain (from fulfilment, to bills and payments, and maintenance and support), other enabling technologies are necessary, including smart analytics38, IoT, and robotic process automation (which is ideal for routine/repetitive tasks and processes)39. Artificial Intelligence for IT operations (AIOps)40 can utilize machine learning and big data to automatically detect issues before they impact the customer experience or other operations. Used in combination with Quality Assurance Testing and Usability and UX Testing, this is a powerful tool for developers.
Tomorrow’s telcos must become more agile, leaner, and proactive. With investments into modern technologies and capital expenditures high, process optimization and automation are necessary to keep costs down while boosting efficiencies.
Future success is on the line
We’re a long way from just being satisfied our phone works. Years of instant gratification from internet-connected digital solutions has forever changed customer expectations. Beyond price, product, or service, meeting customer needs with a customer-centric approach is essential.
Reducing churn is all about understanding your customers and having the best streamlined and simplified solutions in place to give them digital solutions they will love. This is particularly true for existing clients, where omnichannel customer service optimization is vital.
Tomorrow’s challenges are many. More options to go online means more diverse competition. Faster, more reliable connectivity will drive business innovation and product development. Growing choice will give the customer more power. And these new applications, technologies, and 5G-connected devices will attract more cyberthreats.
This is why ongoing and thorough crowdtesting by real people in real-world conditions is absolutely vital. No lab test can replicate the range, versatility, and scope of what crowdtesting can achieve.
It can cost-effectively help you meet these challenges and ensure you can develop multiple opportunities to reduce churn, boost efficiency, and deliver business value. Just don’t forget to keep it personal. Only then can you deliver the right message, the best service, and a truly individualized experience. Every time. At every touchpoint of their journey with you.