Telecommunications companies find themselves facing significant challenges in the pursuit of revenue growth. Across various markets, they grapple with intense competition and stringent regulatory requirements, and are under immense pressure to generate returns on their infrastructure investments. The landscape has prompted a fundamental shift in their traditional business models where, in addition to selling voice and data services, they are now exploring innovative avenues for expansion and revenue generation.
At Digital Transformation World, chief digital and innovation officer at BT Group, Harmeen Mehta, outlined the company’s goal of unlocking more than a billion dollars in value from AI and its intersection with customer care. While the potential value from AI is of course vast, the truth is that the next billion dollars in telco revenue is unlikely to come from just a single line of business or one piece of new technology, but instead, from being able to service multiple lines across a broad range of different vertical markets.
To realise these vertical opportunities, we’ll see the most innovative service providers evolve from being traditional ‘telcos’ to ‘techcos’ – telecoms companies that embody partner-driven innovation, catering to a wide range of businesses, akin to what is delivered by the hyperscale technology brands.
Tapping into the vertical market opportunity
In an era where individuals and businesses are more connected than ever, telcos play a crucial role as enablers of connectivity. Data connectivity serves as the lifeblood for a multitude of emerging digital services, offering telcos a chance to tap into various vertical industries, including home automation and connected healthcare through strategic partnerships.
We’ve seen operators such as Telstra lean into ehealth, where it is offering dedicated services to the healthcare market, in many cases with partner products. SK Telecom has also recently partnered up with Mars Auto, to develop AI-powered self-driving vehicles, facilitated by 5G. And Comcast, meanwhile, has many lines of business, from digital advertising to video-on-demand.
These opportunities now seem limited only by imagination, and forward-looking operators will be looking at their individual context to consider the vertical opportunities they can support. Their experience and competency may well decide these early opportunities, but a key enabler will be a move away from legacy OSS/BSS. Other operators need to follow this practice if they want to generate new revenue streams.
Composable SaaS: the only way to do BSS/OSS going forward
Historically, telcos operated as business units primarily focused on serving either the business-to-business (B2B) or business-to-consumer (B2C) segments with network-centric services. These operations were built around rigid network products that offered limited flexibility in meeting evolving customer demands. Products were pre-defined and couldn’t simply be lifted and shifted to serve a new category.
It’s now clear that telcos can’t afford to buy a multi-million-dollar BSS and OSS solution each time they want to launch a new service and tap into a vertical opportunity. Many traditional BSS and OSS solutions need heavy customization, and would require huge investments if a service provider wanted to create a solution for a customer in a new vertical market. In a fast-moving digital landscape, the approach doesn’t lend telcos the necessary agility they need to capture new opportunities.
A composable, cloud-native architecture, on the other hand, enables them to plug together various software modules from different best-of-breed vendors, to seamlessly offer services for new lines of business. No customization of the software is required, making it affordable for service providers of all sizes to diversify their offerings and partner with new businesses. This approach has proven popular in the enterprise world for some time and is increasingly characterizing what digital transformation means for telcos now.
This kind of integration is also being enabled by industry associations such as TM Forum through their Open API and ODA standards, which offer a suite of open APIs for the industry. TM Forum is an enabling force for helping telcos replace legacy systems with a common blueprint of cloud-native systems and an open architecture for fixed, mobile and data services.
It’s easy to see how the vertical opportunity is closer in reach by adopting this approach. Service providers are now in a position where they can seamlessly integrate into existing systems that are already servicing a market. For example, a telco could integrate with a CRM system that is servicing the customers of a major automotive company, allowing them to deliver traditional services in addition to new connectivity services associated with smart vehicles.
Unlocking AI for customer management and personalization
As service providers look to expand into new verticals, they are witnessing a significant expansion of their products. However, the inherent inflexibility of conventional product catalogues also poses a barrier to achieving personalization and intelligent customer interaction – which will be vital in growing ARPUs. At the moment, while customers have the option to peruse various offerings, their choices are confined to what the provider has pre-defined.
By upgrading to a composable SaaS architecture, operators can also introduce AI software into the technology stack and enable true personalization throughout the customer lifecycle. From creating and taking an order, to providing guided support throughout the purchase, trouble shooting and upselling services, AI can give telcos’ customers exactly what they need, faster than ever before.
Telcos can also combine data from different components, using leading best-of-breed trust and AI engines to craft personalized suggestions and responses. This departs telcos from rigid product catalogues, to offer bespoke services for different vertical customers, using basic service resources.
Ultimately, cloud-native composable SaaS infrastructures are empowering telcos to monetize different vertical markets, adapt to changing market dynamics, and ultimately deliver precisely what their customers desire. It’s through this approach that telcos transition to becoming ‘techcos’ and pursue the verticalization of their hyperscale counterparts.
