Features & opinions | Digital Transformation, Netcracker, Techcos

Telcos to TechCos – Operators must adapt to a shifting market

March 9, 2023 | TM Forum Web Support

By: Ari Banerjee, SVP Strategy, Netcracker Technology

By transforming into technology companies, operators will have the best chance of succeeding in the digital future.

In the rapidly changing telecommunications industry, CSPs are constantly updating their operations and business in order to provide the best customer experience, dynamically evolve their digital ecosystems, and reach new levels of automation and security.

This investment in digital transformation has revealed several necessities for CSPs looking to keep up with customers’ changing needs, as well as ensure they are getting the most out of new opportunities. This includes balancing speed, agility, risks, quality, and business value. By having a strong transformation solution, CSPs will have the right tools, practices, and skillsets for a smooth transition into new business models.

To compete in this new environment, CSPs need to make their organization future-ready by considering key questions such as:

  • How to transform the company into a software-centric and cloud-enabled business
  • How to digitize customer-facing and B2B services
  • How to replace legacy systems with a cloud-based IT stack
  • How to change company culture to embrace digital transformation
  • How to build omnichannel systems that deliver a seamless, consistent customer experience
  • How to structure the organization to ensure the most effective use of assets such as networks, towers, infrastructure, etc.

Telcos are at different stages of their digital transformations, but many are already addressing the above questions. For an increasing number of CSPs, digital transformation goes hand in hand with their plans to transform from telecommunications companies to technologies companies (telco to techco), a transition that will be vital going forward to make sure their organizations are future-ready.

Changing the narrative

Telcos are currently in the middle of a transition to agile, cloud-native networks hosted on a mix of partner cloud platforms and their own in evolution to becoming technology companies. After making significant Capex investments, telcos still tend to rely on partners and other external players to bring innovations to the table rather than driving their own innovations in-house and in collaboration with partners.

But making this shift will be critical as telcos face a new set of challenges, including new entrants to the market such as cloud providers, OTT companies, and infrastructure players, the high costs of building out fiber and deploying 5G, and a lack of efficiency and agility.

Telcos need to look for opportunities where they capitalize on their network and leverage it in new ways with a diverse ecosystem to capture new business and revenue currently being lost to other entities. This journey from telco to techco will also bring advantages such as allowing telcos to more easily innovate; simplify, streamline, and increase automation; and collaborate at a scale much more effectively.

Telcos will need a game plan and the right solutions in place to take advantage of the opportunities of becoming technology companies.

The keys to success

This evolution to becoming techcos will require telcos to develop specialist knowledge and skills in technologies such as cloud, AI, and machine learning. They will need to be proficient in developing or co-developing their own code and inserting it into partner solutions. There will also be the need to enable customer-led joint development projects, provide a co-creation platform for developers, and be able to collaborate with partners at scale with Open APIs. In short, telcos will need to be more innovative and less reliant on outside help.

They will also need to collaborate inside new ecosystems to deliver new services to customers. This kind of transition means a major shift in culture, organization, partner management, and internal automation. Co-creation is now a must-have requirement for modern IT environments. CSPs are looking for partners who will support their deeper dive into IT and cloud solutions, enrich their joint development setup, upskill on co-creation, and allow them to balance between outsourcing and self-sufficiency.

To achieve these goals, telcos will require a transformation, especially of their IT systems, which includes bringing in an open, standards-based, modular, and cloud-native foundation that supports intelligent orchestration, automation, and a modernized, consolidated BSS/OSS. This foundation will give telcos the tools they need to become real digital businesses by fostering internal innovation and driving business growth to deliver better experiences for their customers, become indispensable to partners, and become more successful in the era of 5G and whatever comes next.

About the author:

Ari Banerjee is responsible for Netcracker’s strategic direction and enabling it to address changing market and technology opportunities. He is responsible for all aspects of Netcracker’s strategic initiatives across its portfolio of software solutions including customer, product, and technology management, market direction, and corporate communications.

Ari interfaces with CTOs and CIOs at customers and prospects to ensure the alignment of technology, products, and services while providing strategic input to the CTO office, product management, and R&D teams. In his role, Ari collaborates with industry organizations, standards bodies, media, and analysts and is responsible for running marketing and strategic partner programs for Netcracker.

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