The Changing Face of Telecommunications and Business Technology Solutions
Emerging Trends and Strategies
Telecommunications and business technology solutions are constantly changing with each passing year, more strategies become redundant and fresh ideas appear. The key to surviving these changes are, as always, to adapt and change with them.
Digitization is the driving force behind the telecommunications market. New devices and technologies are being developed faster than ever and more importantly, they are being adopted by everyday consumers at an equally fast rate. Thanks to a rise in the digitally savvy consumer, we have seen an exponential growth in the implementation of new applications and platforms. We only have to look at the expanding IoT (Internet of Things) to see that once a technological infrastructure is in place, new technology can be deployed rapidly and universally.
The trends that currently impact the telecommunications industry all stem from the above. Wired and wireless carriers alike must choose their strategies based on the environment before them; monetization relies on customer traffic, so the business goes where the customer goes. New business models supported by new services and standards are essential to fight stalling revenues.
Telecom and business operators are therefore forced to adapt, in a climate where people are now more likely to reach for a mobile phone than a laptop to search the web. Revenue pours into OTT (over-the-top content) services such as Netflix whilst bypassing the operator, despite their essential role in making such applications possible, creating a struggling middleman.
New strategies being seen in the vertical markets vary from forging new alliances to make the most of this interconnected landscape, to a shotgun approach of funding myriad digital initiatives. Though a more measured approach is often wiser, there is something to be said for an aggressive stance. One undeniable fact is that technology stands still for no one. Claiming a foothold in your changing industry is vital to staying relevant and profiting from what customers need tomorrow, not what they needed yesterday.
The Digital Roadmap
With the emergence of these new digital trends, the crisis faced by most business operators is not if they should change, but how. For the larger entities in the industry, this change is arduous. Bigger companies are mired in their existing structures, from software architecture to operating procedures. Long-standing partnerships can become millstones. Smaller companies are starting out with cutting-edge systems, unburdened by legacy products that are rapidly being overtaken by mobile internet and cloud technology services.
The twin goals of increased revenue and customer satisfaction are directly tied to tapping into these new technologies. Exciting and relevant content, online security, quality services and the perks of the online world (paperless billing, chat support, ease of access, business process management, interactive KPIs) are among the things that drive businesses to other sources to meet technology demands. All of these offerings and more are already available elsewhere.
The activities and trends of consumers are road signs which point us towards potential revenue streams. Telecom companies move huge amounts of data each day; monetizing that activity is as simple as adjusting data pricing plans or targeting content to suit.
New Technology, New Consumer
The trends of the industry, from increased interconnectivity between devices to constantly evolving platforms, provide valuable insight into the customers of 2015 and beyond.
While telecom providers and business operators struggle to keep up with trends, they face a difficult balancing act. Modernization is not without cost, as they must research new technology, upgrade systems and maintain newer networks. Meanwhile, the new customers being reached with these methods are not necessarily producing an equivalent revenue. The pressure is on for the telecommunications industry to find a viable model for growth which can meet demand without collapsing under the strain of expansion.
The key is to make smart bets based on these trends; to recognise that they represent not just new revenue streams, but warnings about how to manage current streams. For example, in telecom, 4G networks are already saturating the market heavily, while the new 5G standard waits in the wings. The emerging breed of consumer who understands technology and can compare prices at the touch of a button will always shop around, so telecom providers should be working harder than ever to reduce their operating costs. Performance can be improved with software-defined networking and small-cell networks are able to increase efficiency.
Price is only the first step. With the advent of online reviewing, word of mouth is more powerful than ever. Reputable service and customer experience are vital, especially among customer segments which value quality or luxury products over price.
The value of a recognised brand name goes a long way in these emerging markets. Customers are still unsure of new technology and want to see the companies they know and trust moving into these new territories. The interconnected nature of new technology inevitably comes with vague new terms like the ‘cloud’, which set alarm bells ringing. Telecom providers are perfectly positioned to lead the way in providing security and privacy safeguards.
Tomorrow’s Digital Ecosystems
The telecommunications industry monitors these trends and is acting on them now. Companies large and small are already implementing new partnerships and strategies, forming digital ecosystems that will be the foundation of future trends.
For example, Deutsche Telekom Capital Partners is funding start-ups to the tune of US$620 million, while giving manufacturing a digital overhaul through a project called Industrie 4.0. Meanwhile in Sweden, TeliaSonera has moved into the fashionable side of electronics with Zound Industries. Internal research and development departments across the industry are poised to take the first steps in innovative services.
Telecom providers are notably tapping into the new audience of multi-device users to take advantage of the relative cheapness of smartphones and smart gadgets. At the cutting edge, AT&T is involved in IBM’s smart cities which take the Internet of Things concept to an idealistic level. When a user can be surrounded with technology to the degree that it determines their office lighting and vending machine experience, there should be a clear prompt for all telecoms providers to look at the wider world.
The result of these digital trends and the strategies being used to exploit them is a telecoms industry moving ever closer to the world of computing. There is a degree of catch-up taking place as telecom providers implement digital ecosystems comprised of applications, devices and services that mirror those used by Google and Microsoft. These companies already synergize their entertainment with their advertising and their shopping with media content (and all things between).
Telecom providers must enter this world of interconnected services with a strong armoury of digital assets. They must understand the nature of digital ecosystems and the value of the right partners in the right places. They must know the costs of change and what aspects of their structure need to be left behind, while having plans in place to monetize the new kinds of big data and advertising that they will encounter. Business customers will be key in making or breaking telecom providers who follow these trends, having more stringent demands on service and reliability.
All vertical markets are seeing strong trends towards a digital, interconnected market where the consumer has more choice than ever before. Existing business operators must identify the needs the digitally savvy consumer and position themselves to meet those needs before the next company does.