The transition to techco – Applies to vendors too

We are at a critical juncture for the telecommunications industry. The industry continues to face challenges, driving growth from all angles, whether subscriber, revenue, investment, etc. Being passive and having depended on vendors for innovation through the years has made telecommunications companies or telcos weak in their ability to drive innovation, leverage technology, and think out of the box.

With the world more digital and hyper-connected, the bar has been raised in terms of performance by digital companies. Expectations for growth, especially with connectivity, are limited. By 2027, eighty-two percent (82%) of major mobile operators in Asia-Pacific (APAC) will remain as telcos with twenty-five percent (25%) of them likely to exit or become mobile virtual network operators (MVNOs), assuming three (3) player markets. Only eighteen percent (18%) of major mobile operators in APAC will become technology companies or techcos.

For telcos, the way forward is to become more resilient against external factors. They need to put in place a sustainable monetization and cost model that can generate new growth from a more efficient, quicker, and smarter mobile network. Vendors need to enable revenue generation at a lower total cost of ownership in the most efficient and sustainable way. Solutions need to cater to changing needs, be agile, and automated.

Vendors can help telcos achieve the change that is needed. In fact, they can become strong partners to telcos. For this to happen, change is as much a necessity for vendors as it is for telcos. Vendors need to focus on performing and delivering consistently to earn the trust of telcos as a pre-requisite. The importance of joint success has to be prioritized over vendor commercial interest for endeavors to be win-win for both parties. It will be helpful now if vendors work to make things happen for telcos.

As telcos go beyond connectivity in search of new revenue streams, solutions need to be flexible enough, especially when it comes to the data model, experience, and security as it will be used in multiple industries. An industry-agnostic solution that includes product catalog, configure price quote (CPQ), self-service, operations, and monetization that converges across different industries will be needed. Telcos will need a standardized approach to onboarding and enabling partners, as with each additional industry, integration will become more complex.

There needs to be a master catalog to synchronize with other catalogs that are already in place and open-application programming interface (API) to bring it all together. There also needs to be means to achieve automated provisioning across different platforms and systems in different industries. Solutions running on open digital architecture (ODA) can help with this. Achieving a standardized interface, enhanced security, and customer care geared to serve the needs of multiple industries are some areas that will need development.

At a high level, it is about enabling a co-creation environment that is able to facilitate collaboration among multiple partners to create offers that can extend across multiple industries. Apart from being a source of innovation, strong collaborative partnerships can help telcos overcome understanding of consumer needs, lack of skillsets, and lack of value proposition. The challenge lies in managing the partner relationship to be outcome-focused.

Telcos need vendors that have proven technical product superiority, successful transformation experience, and innovation capability. As such, vendors need to push the limits to become strong partners. Their approach to telcos and solutions needs to change. Focus needs to shift to ensuring telcos succeed as it is only then that vendors will succeed overall. If all telcos around the world raised the bar in terms of their expectations of vendors such that they transform for the better, vendors would be playing a big part in setting new benchmarks for the industry.

There is so much talk about the telco to techco transition with pressure being put on telcos to initiate and make a successful transition. How much of this pressure is being driven by vendor self-interest? Ultimately, the transition to techco is as much a vendor transition as it is a telco transition. Vendors need to step up. Change initiated and achieved from all angles – telcos, vendors, and solutions – will bring new dimensions to the industry. It is only with alround change and growth mindsets that the industry can start a new chapter.

Time is of the essence. At a critical juncture, the telecommunications industry needs to consider action in the right direction. It is clear that the revenue streams and legacy technology that telcos have depended on in the past are no longer able to deliver the results that they need. Vendors can no longer be driven by self-interest. Customers can no longer be fooled by buzz words used in marketing. It is time for the industry to change and start anew for a brighter future.