How telecom operators can address the challenges of ‘going digital’
In this blog, I am joined by my colleague Emmanuel Legros, Strategy & Marketing Director to discuss the digital transformation of telecom operators
Why is it important for telecom operators to increase their digital offers?
EL: To remain competitive, telecom operators must respond to a rapidly evolving market that is being re-shaped by changing consumer habits – in particular there are a few key drivers of digital transformation.
Firstly, new consumer expectations are pushing this trend forward: both digital natives and newbies are increasingly looking for a fully digital, Uber-like journey and they expect the same experience from their mobile subscription.
Secondly, telecom operators need to anticipate the risks from pure digital players. Disruption to various industries’ ‘status quo’ now mostly comes in the form of 100% digital applications such as Spotify, Uber or Netflix.
These digital experiences in other sectors are now setting the benchmark for telecom operators who are under increased pressure to provide similar journeys. This redefines the way they engage with consumers and, in turn, ’disrupt the disruptors.’
DB: In addition to this, technologies such as Online ID verification and enrollment systems, supported by the drastic growth of the eSIM (embedded SIM), are enabling the delivery of remote enrolment and mobile subscriptions. This is another key driver behind this digital transformation.
Behind all these trends is the 5G rollout, which is further powering change. Benefits such as low latency, high data rates, reduced energy use and cost savings are sparking new digital revolutions throughout the commercial domain.
Finally, it would be an oversight not to mention how the pandemic has further accelerated the need to service customers through digital means. This trend will continue after, it is a global shift towards a 100% digital customer experience.
What is the best strategy and potential internal challenges for operators for their digital transformation?
DB: This all depends on each operator’s situation, but from our experience there are clearly a number of best practices and universal challenges that operators face.
Firstly, by developing pure digital brands, telecom operators can foster faster growth. Many companies already have a plan for digital transformation but it’s often a long and protracted programme. What might work more efficiently is to create a specific digital brand to test innovation, new distribution channels and brand-new offers. For instance, Verizon’s Visible, is one such brand, created to explore the digital-first approach and specifically target digital natives. It has launched the innovative Party Pay programme, which enables up to four people to share a single plan to reduce the cost of unlimited data, creating a “community” approach and flexibility in the choice of members.
As mentioned earlier, a full digital experience is now completely possible thanks to technologies such as eSIM solutions, online ID verification, also referred to as eKYC (electronic Know Your Customer), and 5G. However, operators need to be careful to ensure a good quality of customer experience throughout their journey as people are used to great digital experiences in other walks of life.
In terms of the changes that need to be made internally, existing back-end systems are typically not adaptable to a digital experience, often instead requiring extra layers to plug on it to provide consumers with a full digital experience – which should be a key consideration before undergoing this change.
EL: Indeed, some telecom operators have found it difficult to offer a flexible user experience due to their existing IT infrastructure. One operator even told us they have 25 different systems in place and each time they want to implement something new they were concerned there would be a knock-on effect elsewhere.
Resistance from IT departments can also be a major pain point for Telecom marketers, so any digital implementation should cover an end-to-end digital offer without impacting legacy systems.
Another issue is logistics. It is never easy to distribute physical goods quickly, but now we have had to in the context of the pandemic. Digital distribution is for sure the most efficient channel, and with increasing adoption of eSIM this has also become much easier.
DB: Organisationally, there is a need to have a specific, agile team dedicated to digital projects. For example, if you have an application but are not able to update it regularly to create interest for the end user, it will become useless.
Also, people download a lot of applications, but after a few weeks they delete many of them, and here it is exactly the same. You can create stickiness with end users with a good proposition, but for that you need to have the right tools and be more flexible than you can with outdated IT legacy systems.
How does Thales’ value proposition works for telecom operators and what are the expected benefits?
EL: We’ve put together a whole journey, called Thales Trusted Digital Telco which helps mobile operators to switch to offering a full digital experience for their customers. This includes identification, billing, access to the connectivity service and customer care. It’s a complete end-to-end digital solution – in fact a complete ‘digital operator’ in white label form, which can be combined with eSIM management. We can also provide tools enabling trusted digital identities and mobile payments as well as delivering digital BSSs (Business Support Systems) that plug into existing legacy systems.
DB: We also have the means to measure the benefits for telecom operators.
Our approach facilitates full deployment in a short timeframe, and gives operators the ability to launch new offers on any digital channel in days instead of months. Moreover, the benefits are clear and quantifiable.
For example, at the crucial first step of enrollment and subscription, the Trusted Digital Telco enables Telcos to improve user completion rates from 52% to 80%. McKinsey even estimates that a full digital transformation could help mobile operators nearly double cash flow conversions within five years.
Moving forward, what digital technologies do you think will further support telcos and their customers?
EL: Without doubt, technologies such as AI and machine learning can fully transform the telecom industry in a number of ways; this includes decision-making, by helping operators to anticipate and predict the right service offers for customers, based on their habits and past preferences. However, such solutions must guarantee privacy and compliance with local regulations.
From an operations standpoint, AI could also be used to streamline operations by anticipating peaks in network traffic and the like. In addition, those technologies are also enabling the deployment of augmented solutions, leveraging existing solutions in place and human domain expertise to create an enhanced hybrid experience.
If you are in interested in helping create a seamless digital experience for your mobile customers, you can find out more about the Trusted Digital Telco at our webpage.