Telecommunications companies are at an inflection point, witnessing a vast landscape of significant change. There has been a disruption of the business and customer model, with technologies such as AI, big data and the Internet of Things redefining service delivery and value capture models, while start-ups/ OTT are setting new standards for a seamless customer experience.
As the pandemic has turned the world upside down over the past two years, the post-pandemic recovery has shifted the focus to supporting consumers and businesses through digital transformation and building an ecosystem that adds value. value. Consumers are highly dependent on bandwidth as activities such as distance learning, working from home, and gaming have become permanent.
As telecom operators are the backbone of digital services, it is imperative for them to go beyond connectivity and lead digitization at the forefront to meet the growing demand for digital services.
With spectrum auctions underway, India can expect by the end of the year to join the ranks of countries with 5G telecom networks. It will also bring a drastic change to the telecom sector in India. Telecom companies will need to reinvent themselves to remain relevant in the enterprise segment, as they may face competition from non-telecom companies that may soon start offering their own enterprise segment-focused 5G services.
The 5G standard for cellular networks has advanced the communication experience not only due to lower latency, better coverage and power savings, but also by transforming various industries and revolutionizing the functionality of mobile devices. emerging technologies such as AI, AR/VR, edge computing and Internet of Things (IoT) in over 70 countries where it has been launched. From autonomous vehicles to remote surgery, machine-to-machine communications and smart cities, 5G will enable a variety of new use cases in consumer and enterprise markets across all industries.
The entry of non-telecom companies into the 5G ecosystem will completely change the current shape and structure of the telecom industry. Additionally, the lines that separate businesses will become increasingly blurred as companies from IT to online retail work on their own 5G solutions that will eventually compete with or complement carrier offerings. telecommunications. While telcos will retain their grip on retail customers, most also realize that the enterprise segment offers the biggest and most lucrative pie.
The prospect of future competition as well as the changing needs of their business customers are also leading telecommunications operators to modify their traditional mode of operation. From simple bandwidth providers, they are transforming into business ecosystem partners. In their new avatars, they will be private 5G enterprise service providers and aggregators that include platform solutions, analytics, security and more.
Driving the demand for 5G solutions is the adoption of Industry 4.0 which is finally coming into its own as businesses transform into “digital enterprises”. The convergence of AI, 5G and IoT requires a deeper change in organizations’ investments, IT systems, operations, skills and even culture. Carriers need to define a detailed vision of what next-generation telecommunications carriers will look like with bold moves focused on digital service models, improving cost and capital efficiency.
Indian telecom operators are better positioned in terms of technology solutions than their peers in many other geographies, as a delayed entry into 5G has given them a leap forward. They experimented with virtualization, cloud ERP, analytics and business intelligence, and other similar approaches. At the same time, they faced complexities when the COVID-19 pandemic more than tripled data consumption. 5G is tailor-made to handle such types of data deluge.
Traditional telco operational support systems/business support systems (OSS/BSS) were initially not suited to a sudden data explosion. (OSS refers to the network architecture, software used, etc., while BSS deals with end service components such as subscriptions, billing and notifications for retail and business customers.)
Build larger functions
The growing demand for platform-scale solution providers is pushing telcos to go beyond pure connectivity.
Some of these solutions are developed and offered by the telecommunications operators while others are provided by specialized external service companies with solutions integrated into the platforms of the telecommunications operators. It also requires a change in the OSS/BSS stack, as new systems must be interoperable, agile, and scalable. This change is essential because the growth of revenues thanks to 5G will be directly linked to the transformation of OSS/BSS systems.
Telcos are also aggressively transforming their internal digital structures; processes are digitized through apps or various other digital touchpoints. Some of the large organizations are transforming their entire IT system with a layered architecture where all lifecycle processes are automated in the backend layer; the middle layer is driven by virtualization with limited human processing; and the front-end enables seamless provisioning of services.
Telecom operators expect the requirement for 5G to come from enterprises that increasingly need AR/VR for various functions, smart factory solutions and dedicated private network solutions, among others.
In addition to increasing demand, the investments needed to deliver 5G services are forcing telecom operators to expand their enterprise customer base. Where retail customers made their fortunes, future revenue and profit growth will increasingly come from enterprise solutions.
New trading tools
To achieve sustained superior performance, telcos must strive to create an agile operating model, a digital approach to building new business and customer experience, and a leaner, fully cloud-native computing stack.
Telcos are not just moving internal functions and the OSS/BSS stack to the cloud – the change was initially temporary due to privacy and data protection features – but are increasingly considering digitalization and virtualization and even ERP on the cloud. In the next few years, all new services will probably be offered only through the cloud.
Analytics is becoming the lifeblood of telecom operators, with some vendors setting up entire departments to measure and deliver analytics solutions to organizations that need to segment customers, understand customer preferences and behavior, and… improve the internal efficiency of employee and retail productivity and network and partner performance. . Analytics tools also help make network investments more predictive than reactive and drive revenue.
The future of the communications industry lies in embracing partnerships to create a marketplace that different entrepreneurs and businesses can join, to get the connectivity and resources that CSPs can make available to them.
Another major business segment for telecom operators is expected to be security services. With 5G, organizations will have more data to manage, and therefore an increased need to enforce privacy frameworks. As telecom operators invest heavily in their own security requirements such as encryption, consumer data management, and theft prevention, they are also beginning to offer these and other security services to their customers.
Maintaining security has never been so difficult. Cyber threats have shifted from attacks on individual institutions to attacks on networks at large and the shift to 5G is only accelerating the convergence of computing and operational technology (OT), introducing new vulnerabilities.
5G presents an exciting open source environment that is no longer solely dependent on the major original equipment manufacturer (OEM) and tech industry giants. There is a beneficial influx of other small businesses that are deploying new technologies to improve the operating environment. However, it can also be an incredibly complex environment to navigate in which risks related to supply chain, legacy technologies, customer data and business processes and skills shortages need to be addressed in a timely manner. proactive to ensure a secure deployment. In addition, the primary use of 5G will also extend to private campus networks outside of the telecommunications environment, further accentuating the need for more secure WANs.
5G is also forcing telecom operators to revamp their network functionality. While Software Defined Networking (SDN) will help manage functionality from a centralized location, Network Functions Virtualization (NFV) and Cloud Native Platforms (CNF) will replace network hardware with software. that can be adapted to meet the requirements of 5G. The use of network slicing technology will increase as it divides a single physical network into multiple virtual networks allowing carriers to deliver services according to each customer’s needs.
With 5G, the telecom industry will face a need to expand into new capabilities and features, which will then further propel customer needs and the technology revolution that will continue into the 6G era when it comes.
The next wave of change in the telecommunications industry will be shaped by today’s leaders who can recognize the scale of change, act quickly and with conviction to become the catalysts of the future.
The authors are cybersecurity partners at EY India.
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