Telco Digital Transformation Playbook

TERRAIN 

The simultaneous forces of delayering and defragmentation are driving value shifts. Telecom leaders must fundamentally rethink their operating models to become more efficient and agile. This includes automating processes, simplifying operations, and partnering with other businesses.  

PLAYING FIELD POSITIONS

This playbook identifies five key roles that telecom companies can assume in the digital economy.

• NetCo: A NetCo provides Network-as-a-Service (NaaS) capabilities, such as access and transport. NetCos must be hyper-efficient and focused on automation and simplification.
• Platform-ready Connectivity Provider: A Platform-ready Connectivity Provider (PRCP) delivers connectivity-as-a-service (CaaS) and pre-integrated services such as mobile edge computing. PRCPs can aggregate access from multiple NetCos and technologies to deliver multi-geography CaaS.
• Innovation Platform Provider: An Innovation Platform Provider (IPP) provides a platform for innovation and solutions, co-delivered with partners. IPPs deliver integration platforms that enhance products, experiences, and access across multiple providers.
• Solution Provider: A Solution Provider creates, tailors, and delivers end-to-end solutions for vertical use cases or segments, such as SME. Solution Providers bundle multiple solutions to create end-to-end user-centric solutions, cross-vertical or vertical-specific.
• Solution Marketplace: A Solution Marketplace aggregates complementary solutions and capabilities.

Delayering the operating model will remain key to empower the structure of the age new telcos.

THE EMERGING PLAYING FIELD

Telcos have 4 possible choices to compete in the emerging playing field. Winning telcos will need a portfolio of strategic choices spanning scaled-out partner and scaled-our horizontal positions, both of which require enabling and partnering across a connected partner ecosystem.

Telcos, in the short-term should focus on opening out capabilities that attract ecosystem partnerships at scale, while investing in longer term org transformation to build horizontal advantages.

THE DELAYERED TELCO

The traditional telco model is increasingly getting delayered in the emerging connectivity services landscape, combined with value shifts to cloud services.  Telcos must choose key positions to own in this new playing field.

Occupying new market positions will significantly strengthen CSPs standing in the business ecosystems of the coming decades.

STRATEGY

Innovative business models will simultaneously leverage CSPs unique core capabilities while expanding into highly lucrative digital-native businesses ‘beyond connectivity’

Telcos need to strategize across three core priorities to stay relevant

1. Leverage Core Capabilities To Target New Value Pools

• Leverage a dominant market position to expand to an adjacent opportunity
• Specialize to serve a vertical market, while engaging customers and partners for last-mile solution development
• Specialize to improve advantage in a specific capability
• Leverage horizontal strategies

2. Across A Diverse Partner Ecosystem

The emerging industry landscape offers many opportunities for telcos to exploit new value pools in partnership with other players. Telcos can build one or more of three advantages [a] Vertical advantage, [b] Capability advantage, [c] Market advantage to differentiate themselves while partnering with integration platforms

3. Solve For Fragmentation At Industry Scale

Defragmentation across connectivity + products (connectivity + security, IoT etc) will remain key to new value creation, particularly for ‘mini solution bundles’ at the infra layer, which ladder up to bigger solutions

TOOLS

Organizational agility and scalable innovation are the most important tools when playing

in a constantly changing terrain. Existing technology investments are the building blocks of the ‘platform ready operator’. When coupled with a new arsenal of organizational capabilities, new service models will be enabled within the telecom industry.

Four shifts ‘platform-ready’ operators should be aware of

1. Shared business capabilities stack
2. Funding reusable shared building blocks vs product lines
3. Enabling innovation through consultative governance model
4. Empowering small autonomous teams to solve problems through customer proximity

Organizational agility and scalable innovation are the most important tools when playing in a constantly changing playing field