Time for Telecom Providers to rethink their role in the new connected society.

One thing COVID-19 has shown is that people adapt quickly when a major event occurs. Suddenly our lives changed as ‘Remote Everything’ became the new norm. We shopped online for groceries and all manner of products, we visited our doctors online, our children went to school online, met with our friends and family online, and conducted business online. Everything we have talked about for the past 10 years became a reality. We became “digitally connected”, and Telecommunications became essential to our existence. COVID has forever changed how we function both individually and as a society, and many of these new habits will remain.

Due to COVID, broadband traffic has surged over the past 12 months. Telecom Providers are reporting a 20% to 60% increase in traffic, with spikes in video conferencing, gaming, streaming and other media services. COVID has exacerbated the never-ending demand for faster and higher quality internet, with consumers expecting Telcos to provide more for less. Work from home, stay at home has only increased the market’s expectation for high-quality, low latency internet for streaming services, video calls and remote working, and people are on the net more than ever. On average, internationally, broadband consumption at the end of 1Q20 jumped to 402.5 GB, an increase of 47% over the 1Q19 average of 273.5 GB and a 17% rise over the 344.0 GB in 4Q19.

However, many of these communication services are provided by OTT Players such as Microsoft, Zoom, and Facebook. These businesses have a free ride on the network, providing consumers with alternatives to legacy voice, messaging and video services. For example, globally, WhatsApp has 2bn users and Messenger 1.3bn. Both services are owned by Facebook, providing voice, video, and chat services globally, with no apparent cost to the user, leaving the Telco providers short on revenue.

In the Australian market, WhatsApp has approximately 37% of the users, according to the business of apps website. The Telcos only financial transaction is to deduct from data usage on average, using one megabyte per min for voice and 3 megabytes per minute for video. Telecom Service Providers need to ensure they are not reduced to merely infrastructure carriage. For the communication services market, the fight for customer ownership and service domination was made more evident thanks to COVID… it already appears to be an uphill battle for Telcos to compete for and remain relevant in the consumer communications and entertainment market.

Enterprises and governments are entering a digital era with new technologies, 5G, Artificial Intelligence and Machine Learning, Robotics, Augmented and Virtual Reality, Internet of Things, and Edge and Cloud Computing as the new digital foundation. These technologies and industry verticals are being touted as the new sources of revenue for the Telcos. But to win will require a new approach. Industries are looking for solutions, and Telcos will need to create strong partnerships with industry players across the board. Mega technology companies such as Amazon, Google, and Microsoft, with their cloud offerings, already dominate the market and are progressively moving into the enterprise platform and application business with SaaS offerings, making it difficult for Telcos to participate and win.

Then along came 5G with the promise of being a game-changer. The thematic statement of the Telco Industry is “5G will release the next generation of super services supported by AR, IoT, AI that only Telecom Companies can gift to the world”.

Suppose Telcos are to truly maximise the new prospects of 5G. What would be required?

Industry knowledge, a solution focus to build ecosystems with a transparent and flexible infrastructure to support new business models enabling innovation and creativity for new offerings to support industries.  To realise the real value of a Telecom Service Provider, the key is having an organisation and securing the right leaders to forge a place in the newly connected world.

The challenges with identifying these individuals are there are few, and they are dispersed.

These visionary leaders are almost always “the strategist”, as defined by Rooke and Torbert in their classic HBR article “Seven Transformations of Leadership”.  Successful strategists, in turn, require diverse teams to outperform, but if these teams are not exceptionally well lead, they almost inevitably fail and do so dramatically. Complementary to achieving success is matching this leader with diverse, talented individuals to formulate a cohesive, effective team.

Blenheim Partners excels in identifying and successfully placing leaders and building executive teams that can meet this challenge.

According to a study by Bain, technology has been the winning global sector growing market cap with 25% (median) in 2020 vs 2019, but that does not equate to every technology organisation winning.

Responding to the market, Blenheim Partners Telecommunications, Technology and Digital Transformation Practice has built and will continue to compile intelligence on an international pool of current and future Executives and Game Changers.

Contact us