WeKnow Media Q&A
- We’re well over a decade into the digital transformation of telecoms and it’s clear many CSPs have made significant strides in their transformations. How would you characterise the maturity of digital transformation in telecoms today?
Most CSPs have undertaken digital transformation journeys in the past decade, spanning technology upgrades, such as embracing virtualization and cloud to break away from outdated hardware and software. Moreover, the industry has undoubtedly made strides in terms of improving ways of working and culture, which demonstrated its true value and remarkable resilience during the pandemic.
However, these initial moves have failed to avoid the present reality: many of today’s telcos are commoditised, asset-intensive businesses locked in a self-defeating price war that undermines their value.
In the next decade, CSPs can’t afford to maintain a piecemeal approach to the next era of transformation. Bold steps are required to reignite growth by reimagining the core connectivity business, unlocking the hidden potential of programmable networks, local market knowledge and embracing co-creation with partners such as hyperscale cloud providers.
The good news is that CSPs across the globe, most of which are TM Forum members, today see the urgency for change. At TM Forum, we think of this in two parts – getting fit for growth and delivering growth. Getting fit requires embracing a radical simplification, modernization, and automation – across the entire business. That means being brave and radical with simplifying products, processes and go-to-market approaches that are decades old. It means migrating to reusable cloud native software, built to our Open Digital Architecture standard, and leveraging Open APIs, and pursuing ‘zero-touch automation’ with AI – more CSPs are setting bold objectives for the coming years, and those that lean into the change will win.
- Given that innovation never stops is it fair to say that digital transformation has no final destination? Do new capabilities enabled by AI, ML and automation simply add to the transformation burden while setting up the telecoms industry for sustainable profitability?
Transformation is a state of mind, not a project or destination. But it’s critical to check progress against the competition along the journey, and the pool of potential competitors for CSPs is only growing. In most cases, CSP transformation efforts have been heavily focused on technology and the next wave requires a truly business-wide transformation.
AI, ML and automation can be truly transformative for the telecoms sector, and we see it as important and monumental a development as the advent of cloud computing. But, unlike cloud computing, we need to move much faster and recognize that, to get the most out of them, we have to reshape operating models and decision-making processes. That’s not easy to do.
AI unlocks new efficiencies for telcos like network self-prognosis, self-optimisation and self-healing but that really only scratches the surface. It’s an opportunity to accelerate the launch of new services, overhaul customer experience and even create Digital Twins of telco networks for experimentation – to test concepts and ideas outside of the live network to mitigate risk and understand potential impacts.
AI, ML and automation will ease the burden on network engineers and broader transformation and delivery teams – rather than adding to the transformation burden – and paves the way for telcos to optimise their business models to unlock sustainable profitability.
- How do you see TM Forum’s continuing role in setting out best practice and helping members to maximise the advantages of digital transformation?
The TM Forum is the only telecoms industry body to count the world’s top 10 CSPs and all the key hyperscalers as active, strategic members. It’s where CSP and vendor members are leading the way in redefining existing software stacks, charting practical use cases for transformative technologies such as AI, and further pushing the boundaries of innovation through TM Forum’s Catalyst proof-of-concept projects. As well as acting as a hub for innovation, our community works closely to standardise these applications of cutting-edge technology in a way that benefits the entire telecoms industry and the customers it serves across the globe.
- What impacts do you see the widening of the digital landscape having on telecoms? I don’t think anyone sees telecoms acting in isolation in the future so what is needed to enable a broader ecosystem in which CSPs can integrate easily with others, drive value creation and enable rich and appealing experiences for customers?
As the digital economy grows, connectivity only becomes more important. But customer needs are rapidly changing. B2B and B2B2x customers need on-demand, flexible and secure connectivity solutions – as ‘easy as Amazon’. They need connectivity that interacts intelligently with other digital infrastructure, such as central and edge cloud services, and IoT devices. In most cases, CSPs are simply not ready for this leap or the opportunity it brings. It requires a wholly different, customer-centric approach to product and solution development, all the way through to how those solutions are sold, serviced, and maintained.
These changing customer needs open new growth opportunities for telecoms. With enterprise connectivity carrying ever more sensitive and critical workloads, CSPs are well placed to offer sophisticated security products that ensure data and devices are protected. We already see security revenues growing at double-digit rates for CSPs and believe this is the tip of the iceberg. But it’s unlikely CSPs can get there alone. They need to partner – with each other, and with hyperscaler cloud providers and innovative software providers, to unlock growth and the right channels to market.
Key to unlocking these opportunities will be the delayering of the integrated telco operating model. Most CSPs are asset-heavy businesses, but today’s software-driven innovation needs asset-light rules. These transformations are not unique to the telecoms industry. Unbundling the retail value and financial services value chains, for example, has paid dividends for cloud service player upstarts and integration platforms. This is the playing field that CSPs find themselves in and in which they can find success. Those that embrace open architectures are best placed to differentiate themselves while also engaging in partnerships to be more customer centric and continue unlocking value and new growth opportunities.
- What do you expect to see at this year’s event? What are the key themes and trends that will be uncovered?
DTW23 – Ignite sees us return to Copenhagen after a successful debut in the Danish capital last year. I’m really looking forward to seeing leaders from across the industry – from telcos, vendors, hyperscalers and customers alike – working together to reignite growth for our industry.
Key themes and trends that I expect to feature prominently at this year’s event include the platform and partnership strategies required for telcos to diversify beyond connectivity, the industry’s shift to be AI-native, including practical learnings and lots of productive conversations around the culture change that telcos need to bring about to prioritise R&D and set focus on the delivery of compelling new services.
