Founder and CEO of Gotransverse. A 25-year veteran of global enterprise software with a focus on monetization.
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Many think of telecommunications as being at the forefront of emerging technology, and in many ways, that's true. Looking at the last 40 years, technologies that form the backbone of the telecom transport, service and feature set have undergone a radical transformation. We've graduated from analog copper lines to software-defined wireless and fiber networks delivering services at a volume, speed, and cost per unit that was unimaginable decades ago. This new network structure supports the rapid adoption and delivery of new products and services.
But when it comes to supporting BSS/OSS systems, many communications service providers (CSPs) have not embraced change and still utilize legacy business and support models with hastily added web interfaces. Like so many other industries, CSPs have often been laggards in providing a truly digital experience. Most CSPs now recognize the need for an agile, native cloud-based approach to BSS/OSS coupled with an omnichannel customer experience (CX). There is also an emphasis on integrating vertical service offerings to unify business lines within segmented organizations to present a clear brand, voice and a 360-degree experience to customers.
CSPs are now connecting customer data across channels to reduce repetition and give companies and customers a holistic view of customer services. This data access also provides a client-tailored customer experience across all channels. If CSPs stay focused on agile cloud adoption and CX while adapting to emerging opportunities, they can win new customers and retain existing customers and emerge as industry leaders.
To stay ahead of new agile competitors that aren't burdened with legacy infrastructure, CSPs are looking for new revenue sources from new service and business models. Digital transformation is finally in high gear.
Telecom Is Expanding Into Adjacent Markets
Customer self-service is part of any digital transformation strategy, and migrating to the cloud allows telecom providers to provide an omnichannel CX. Consumers also perform more online research before reaching a buying decision and expect more options at the point of sale. To retain customers and expand sales, CSPs need to enhance every touchpoint for the customer, making it easier to subscribe and change services on demand. That includes automating business processes such as new subscription offerings, billing and payments as part of the overall CX.
To increase satisfaction and promote customer stickiness, CSPs are also becoming multiservice providers and moving into adjacent businesses. New OTT services have been especially attractive to telcos. In addition to streaming services, new mobile services like Quibi are creating new demand for core telecom services. These value-added services are being sold as both standalone subscriptions and as part of bundled service packages, giving consumers more choice, and creating opportunities for recurring revenue.
In addition to new services, CSPs need to support more data capacity options. More data demand from IoT and 5G mobile data, including 4K/8K resolution video content, is going to require providers to throttle bandwidth up or down and charge users for different capacities.
Service expansion is going to require more than just increased cloud-based capacity, dramatically more scalability and shorter time-to-market. This service expansion is not possible without more agile business systems. Being agile includes being able to work with legacy applications while transitioning into new front- and back-office cloud-native tools.
Cloud Services Overcome Legacy Limitations
CSPs are fighting a growth trend of reduced revenue per customer and higher churn rates. As average revenue per user (ARPU) decreases, the cost of billing using legacy systems becomes more of an issue. Hence the cost-to-invoice can quickly exceed the ARPU, especially with legacy systems.
Part of the rationale for cloud migration is to abandon legacy IT infrastructures and address the growing shortage of IT talent. With the cloud, you have more agile managed services such as software-defined networking (SDN), which accelerates time-to-market, increases efficiencies and dramatically decreases costs. CSPs also improve scalability on-demand to support new bandwidth-intensive services.
As CSPs seek to expand their offering with services such as streaming content, using a native cloud-based business model makes it easier to integrate third-party services and automate revenue sharing. Consolidating services via the cloud shortens time-to-market for new products, services and partners and facilitates the consolidation and orchestrating of billing. This consolidation of services equates to a faster time-to-revenue for everyone in the value chain.
CSPs Need To Become Customer-Obsessed
Retaining customers and building recurring revenue require improved quality of service and enhanced customer experience. More services will also be available on-demand, with more personalization, including customizing content, bundles and discounts.
CSPs have to embrace more service partners. Third parties are going to find new ways to integrate, and white label services and are going to share the revenue, often among several parties. That means CSPs will need to be able to track revenue sharing, as well as paying taxes and related fees. Supporting dynamic revenue sharing requires agility, extensibility, and intelligent business and billing systems that only native cloud tools deliver. In many cases, CSPs will be asked by their enterprise customers to extend their billing system to bill on behalf of their customers. The ability to support such demands creates new revenue streams and adds stickiness to the high-value enterprise customers CSPs value.
Digital transformation for CSPs is going to be driven by the development of new available services and the consolidation of service offerings into easy-to-choose bundles with a la carte options. Customers expect a seamless, reliable customer experience coupled with digital services on demand, including billing. The only way that CSPs can deliver on this promise is by reinventing themselves as a single-source provider of a diverse range of digital services, powered by a native cloud infrastructure. Those CSPs who don't embark on this digital transformation will be relegated to the long list of forgotten technology laggards.
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