The digital age is upon us. Whispers of ‘Digital Transformation’, ‘Internet of Everything’ and ‘5G’ have grown to a roar and there is no hiding from the increasing consumer appetite for more connectivity and more services – delivered more quickly. Communications Service Providers (CSPs) need to find out where their next big business will come from.
This may not be from the consumer industry, but from the B2B and enterprise market instead.
In order to deliver these demands, service providers and operators need to take a long, hard look at their infrastructure and make fundamental changes if they are to cope with the sheer volume of information that will soon become mainstream. What many are discovering is that they do not have the right systems and capabilities in place, thus costing them hours in manual intervention and delayed time-to-market, damaging their revenues in the process.
In 2018, we conducted an independent industry survey of 100 tier-one and tier-two CSPs worldwide and asked how prepared they were to manage the next wave of digital services and what they were doing to transform their supporting infrastructure. The research showed that CSPs believe that addressing and improving their offer creation and delivery capabilities would benefit their businesses in the age of digital services. Specifically, it revealed that only 45 per cent of the respondents had fully automated sales processes, with an average of five per cent manual intervention in the remaining 55 per cent of companies.
Looking at this from a financial point of view, a one per cent reduction in manual intervention in order fulfilment would increase revenues across tier-one and tier-two CSPs by as much as USD 8.1 billion. In addition, the respondents said that decreased time-to-market would deliver an extra 1.1 per cent increase in annual revenue. Based on tier-one and tier-two CSPs alone, this would equate to a revenue increase of around USD 7.4 billion. This means that, taken together, these seemingly marginal improvements would increase revenues by as much as USD 15.5 billion.
With 5G networks and the Internet of Things already being deployed, these revenue opportunities are effectively being squandered because of highly complex and insufficiently automated systems. Missed revenues and extra costs will only increase if service providers continue to drag their heels.
The introduction and adoption of 5G network technology is probably the biggest technological and commercial event for the telecommunications industry in decades. Billions of dollars will be spent to make the 5G era of networks a reality and CSPs are banking that there will be even greater demand in the years to come. We are at an inflection point where 5G technology will begin to have an impact on communities, governments and enterprises worldwide. It will redefine the way in which individuals and organizations interact with each other, as well as the rollout of new services by industries.
The next 18 months will be crucial for service providers to examine their 5G readiness level. According to a recent 5G use case and adoption survey by Gartner, two-thirds of organizations plan to deploy 5G by t2020. The lack of readiness to deal with the basics – losing money through fundamental flaws in their commercial systems – might sting now, but in the 5G world, they will become crippling.
The Internet of Things (IoT) will continue to deliver new opportunities for digital business innovation for a decade; many of these opportunities will be enabled by new or improved technologies. According to Gartner, IoT will also experience several long-term trends that will impact IoT solutions, sometimes in a beneficial way, and sometimes not. By 2023, the average CIO will be responsible for more than three times the endpoints they manage in 2018. Looking at the wider picture, this will only exacerbate the potential revenue losses for CSPs that have not properly prepared their internal systems.
As our survey shows, some operators have not yet shed their legacy approach to infrastructure and networks. They remain unable to embrace new digital practices such as omnichannel selling, DevOps (software development and information technology operations) for introducing a product to market, zero-touch automation for fulfillment, or a broad partner ecosystem that’s repeatable.
Any CSP that is not yet pivoting to a customer-centric, digitalised product and service delivery model faces a challenging journey amid the digital disruption having an impact on our industry. To stay ahead, CSPs must behave as Digital Service Providers (DSPs), having more predictable and repeatable operations and an innovation model, which is highly configurable and able to interface with other systems. To win at digital transformation, operators need to embrace digital innovation and enable rapid launch and fulfilment of new products and services through adopting agile B/OSS as an additive overlay to legacy. The emerging 5G technology provides the opportunity for CSPs to capitalise on their core strengths and lead as the revolution arrives.
The widespread implementation of 5G will mark the amalgamation of several game-changing communications and computing technologies that deliver a pioneering platform for the rapidly growing digital and intelligence-led economy. These innovations deliver a major increase in network speeds, extremely low latency, and markedly increased support for the device ecosystem that will power the Internet of Things.
As 5G and IoT proliferate, every industry will become a service provider and have B2B consumers, from energy, entertainment and transport, to healthcare, government and agriculture. Indeed, these users will be just as demanding as the mobile phone customer on the street. Moreover, this means that service providers will have to provide a seamless service, at scale, and right now. Where CSPs can conceptualise and provide new solutions for the enterprise sector, not consumer-led applications, 5G will be the catalyst to the expansion of CSP services beyond the current base of network customers.
By 2022, half of the CSPs that have completed commercial 5G deployments will fail to monetise their back-end technology infrastructure investments. According to Gartner, this is because systems will not fully meet 5G use-case requirements. 5G will bring even more types of networks that need their resources to be provisioned and activated. Therefore, the orchestration of multiple network resources is a must.
It is imperative that we stop thinking about 5G as merely a mobile technology. The advent of the 5G era will give rise to applications that CSPs can take to other industry verticals, and the real opportunity will be in providing a new breed of services and value creation to enterprises if they can get their systems in shape and offer slick, digitally-driven services.
No-one can say for certain how the coming years will play out in the digital world, and whether the predicted data and ‘things’ tsunami will hit us in the next half-decade. But it is on the horizon. Whilst many CSPs think they still have time to get their houses in order before it arrives, they do not. Digitally native companies such as Amazon and Google, as well as those who are taking inspiration from them, are putting simplicity at the heart of their complicated operations. They are putting themselves in a position that is favourable and will hold fast when the storm comes. It may seem that no-one is ready for digital transformation. But some are and others are catching them up. It is imperative that all service providers get ready now or face the surge without a lifeboat.
Robert Hingston,
Vice President of Products
(This article was originally published in the June issue of Pipeline, and can be accessed here)