The telecommunications industry has long been synonymous with providing connectivity through traditional methods, where the focus was primarily on managing and delivering network resources for end-user devices. However, the landscape is shifting dramatically as telecom operators recognize the need to evolve beyond mere connectivity. With content generation increasingly dominated by over-the-top (OTT) media services, direct-to-consumer platforms, and other digital media services, telecom operators are now at a crossroads.
To remain competitive and relevant, telecom operators must pivot from their traditional roles and begin offering value to content creators by providing insights derived from their networks. This evolution involves adopting software-defined interfaces and transitioning to a consumption-based business model, moving away from traditional infrastructure-focused strategies.
Embracing a Software-Driven Approach
This transformation is not limited to network virtualization or softwarization; it extends across the entire operational stack, from network management to customer experience. By adopting a holistic software-driven approach, telecom companies can achieve faster time to market, enhance service provisioning, automate processes, and create autonomous networks. This shift enables precise asset management and the digitization of customer services, which are critical for staying competitive in a rapidly evolving market.
Accelerating Cloud-Native Adoption
For telecom operators to successfully transition to a software-driven business, becoming cloud-native is essential. Cloud-native technologies are foundational for developing and deploying new network elements and services. This means telecom companies must develop cloud-native software, implement robust tooling, and establish continuous integration/continuous deployment (CI/CD) pipelines.
Our research indicates that telecom executives anticipate a significant increase in revenue from software-driven services by 2030, with an expected 39% revenue share from software compared to the 29% industry average. Embracing cloud-native practices not only supports the development of scalable software-based services but also facilitates growth in areas such as cybersecurity, IoT solutions, and edge services.
Harnessing AI for Smarter Automation
Current network automation solutions often operate in silos, leading to complex and inefficient integrations. By leveraging AI, telecom operators can address these challenges through intelligent inventory management and automation. AI can enhance automation capabilities, reduce total cost of ownership (TCO), and accelerate innovation.
AI plays a crucial role in managing network assets, optimizing performance, and automating customer interactions. For example, AI-driven network optimization can improve throughput and reduce latency, directly benefiting bandwidth-intensive applications like streaming and gaming. Moreover, AI can enhance customer service through chatbots and personalized recommendations, providing timely and relevant support.
Fostering a Culture of Collaboration and Transformation
Successful software-driven transformation goes beyond technology; it requires a shift in organizational culture. Telecom operators must focus on understanding their customers, addressing their needs, and delivering an exceptional experience. This involves reimagining team operations, talent management, and continuous product development.
A collaborative approach is vital for success. Telecom companies should engage with a broad ecosystem of stakeholders, including chipset providers, hardware vendors, cloud and platform providers, and testing agencies. This collaboration ensures access to the necessary expertise and capabilities to fully leverage the benefits of a software-driven transformation.
Charting the Path Forward
The journey from a traditional telecom operator to a software-driven tech company involves significant challenges, but the rewards are substantial. Our research highlights that while many organizations are still in the experimentation phase, there is ample opportunity to start the journey and shape the future. Only 29% of companies have scaled software-driven transformation, with just 5% fully implementing their use cases.
Telecom operators must act swiftly to capitalize on the benefits of a software-driven model. As technology evolves rapidly, there is no time to waste. Embracing cloud-native practices, leveraging AI, and fostering a collaborative culture are key steps in unlocking a new era of innovation in the telecom industry.
Read More: How Telcos are Using AI to Make Smarter Capex Decisions
