Nilay Akdemir: How Telecom Companies Can Keep Pace with Digital Transformation

Up to 75 percent of operators will experience significant revenue decline in an “unlimited data world” if they don’t change.

Nilay Akdemir: How Telecom Companies Can Keep Pace with Digital Transformation
The author of this Expert Opinion is Nilay Akdemir, senior director of Simon-Kucker & Partners Middle East

The telecommunications industry is evolving around the increasing customer expectations, accelerating digitalization of the experiences and services and new technologies.

We identified three areas that telecom operators would focus on to keep pace with the transformation: Protecting the core by enhancing network and service quality, digitizing and personalizing customer engagement and diversifying the Average Revenue Per User composition by investing in new revenue streams.

Since the beginning of the pandemic, network quality awareness of customers significantly increased for the telecommunications services. Customers value good service and network quality over the price in their purchasing decisions.

The global Customer Base Management Study conducted by strategy and marketing consultancy Simon-Kucher & Partners shows that in the Gulf Cooperation Council, 73 percent of customers state they value a fast internet connection the most. Therefore, it is crucial for telecom operators to invest in their network and service quality and strengthen their core as it has been perceived as indispensable for telecommunications customers.

The global customer base management survey involved around 4,700 telco customers in 15 countries worldwide and aimed to determine the effects of the COVID-19 pandemic on consumer behavior in the telecommunications industry.

Digitalization and artificial intelligence are among the most undeniable trends of the century. Smartphone penetration has reached to 90 percent in GCC, which is expected to be 95 percent in 2030.

Increasing smartphone penetration and high internet connection speeds with 5G investments accelerates digitalization for telecommunications industry further. This makes it inevitable for the operators to redesign their whole customer engagement and operating model in the new digital era.

Opportunity to reshape digital engagement

Many opportunities exist while reshaping the digital engagement such as: digitizing the products and customer services, gamifying the experiences, building a loyalty eco-system to attract customers to the digital channels frequently, leveraging data and intelligence to personalize each and every experience, and be ahead of the customers by taking predictive and preventive care actions. Operators that can position a holistic and intelligent digital ecosystem at the center of customer engagement will be the winners of future.

While operators protect their core services and transform their business models digitally, they need to look for opportunities to diversify their revenue streams as well. Many telecom operators started to introduce unlimited data propositions, which comes with a high risk of turning more-for-more strategies into same-for-less.

Simon-Kucher Partners’ study shows that 75% of operators will experience significant ARPU decline through the transition into an “unlimited data world” if they don’t change their monetization strategy. Telecom operators already started to face significant shifts in the ARPU composition, where it shifted from voice to data in the last decade and is expected to shift to digital services in the next decade.

Global Mobile Trends study shows that services beyond core, including pay TV, media and advertising, IoT, cloud, security, financial and lifestyle services, and solutions for vertical industries, have reached an average of 20% of total revenues for major operators already.

It is time for the operators to explore the ideas and innovations that are aligned with their long term strategy, validate them on the market, and invest in the ones that are feasible and serve for reaching their north star – which is in most of the cases an iterative process.

Nilay Akdemir is Senior Director of Simon-Kucher & Partners Middle East. Simon-Kucher & Partners is a global consulting firm with more than 1,600 professionals in 42 offices worldwide. Founded in 1985, the company has more than 35 years of experience providing strategy and marketing consulting and is a leading pricing advisor. This piece is exclusive to Broadband Breakfast.

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