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In-depth Guide to Digital Transformation for Telecoms in 2024

In-depth Guide to Digital Transformation for Telecoms in 2024In-depth Guide to Digital Transformation for Telecoms in 2024

The telecommunication or telecom sector is a ~$1.5 trillion market that makes communication possible worldwide. As remote work becomes more widespread, consumer needs continuously change in the telecom sector, and they demand better services from telecom service providers. Like every other sector, the telecommunications sector can also benefit from digital transformation to improve its services. 

In this article we highlighted the each aspects of digital transformation in the telecommunication sector, including what it is, why it matters, its benefits & challenges, and key digital technologies being used in the telecommunications industry.

What does digital transformation mean for the telecommunication industry?

Digital transformation in the telecommunication sector means that service providers expand and improve their services through implementing new digital technology in their business. These services include:

  • Phone service
  • Internet service
  • Television service
  • Networking for businesses and homes 

What are the benefits of digital transformation in the telecommunication sector?

Benefits of digital transformation for the telecommunication companies include:

  • Improved customer experience: Digital transformation can enable telecom service providers to improve customer experience through digital solutions such as digital customer relationship management and omnichannel customer care services, chatbots, and social media interactions.
  • Data-driven insights: Digital technologies can analyze vast amounts of data and provide accurate insights. These insights can enable better planning and help with strategic development.
  • Agile network: Digital technologies can help telecoms react to changing customer demand and stay competitive. 
  • Automation: Automating workflows can help reduce human errors and improve operations in the telecom sector. This can reduce failures and problems in the telecom network. 

What are key digital technologies being used in the telecommunications industry?

The following are some digital technologies that are reshaping the telecommunications sector:

Artificial intelligence and machine learning

  • AI enables predictive maintenance in the telecom sector. AI and ML algorithms can identify patterns in historical data, and through algorithms, it can predict possible hardware failures.
  • Conversational AI platforms such as virtual assistants and chatbots can significantly improve efficiency in the telecom sector by managing large amounts of customer queries.

Big Data

  • Big data technology adds considerable value to the decision-making process and provides accurate and actionable insights for telecom companies. 
  • For instance, companies can use network traffic data to better understand user behavior, which can ultimately help improve the delivery of media content and the overall customer experience. 

Process Mining

  • Process mining collects and analyzes business processes stored in event logs data generated by IT systems to provide insights on telecom operations.
  • Process mining enables telecoms to monitor, manage, improve and automate processes to accelerate digital transformation.

Internet of Things (IoT)

  • Global IoT revenue is projected to increase from ~$441 billion in 2021 to ~$1 trillion by 2030.
  • IoT has significant implications in improving infrastructure management in telecom. It provides an intelligent platform for achieving increased efficiency and enhanced workplace experience. 
  • IoT can also provide data for predictive, diagnostics, and prescriptive analytics services for telecom customers.

Cloud computing

  • The telecommunication cloud market will reach ~$125 billion by 2030.
  • One of the most significant advantages of cloud tech is the substantial amount of IT cost savings. In addition, cloud infrastructures can also provide the desired flexibility that telecoms need to provide ubiquitous services to their customers.

What are the challenges for the digital transformation of the telecommunication sector?

It is challenging for telecom companies to provide quicker and more agile services as their business becomes more complex.

Some of the challenges are:

  • Market integration: Previously, services such as fixed-line, broadband, and broadcasting were separate markets. Consolidating these services increases complexity for the telecom service provider. This will get even more challenging as more services such as smart cars and smart homes become common. 
  • OTT Services: The increasing demand for over-the-top (OTT) platforms, such as Netflix and Disney Plus, has forced telecom companies to incorporate a more flexible business model, work with new operators, and allocate revenue to new alliances. The seamless integration of these elements in the existing model can be challenging for telecom service providers.
  • Centralized to decentralized: Many new digital technologies are based on agile development. Therefore, if a telecom company has a centralized system, it can be challenging to decentralize these systems in order to implement these digital solutions in different parts of their business. 

How can telecoms remain competitive in the future?

The following figure illustrates the elements that telecommunication companies need to incorporate in their business systems to become more agile and remain competitive in the market.

Figure 1. legacy to agility

The image represents the key elements that telecommunication companies need to incorporate in their business systems to get competitive edge.
Source: ey

What are some case studies of digital transformation in the telecommunication sector?

The following table presents some digital transformation case studies in the telecommunications sector:

Type of projectCompanyBusiness FunctionCase StudyResult
Process ImprovementVodafoneCustomer Service•Introduced Chatbot TOBi•68% improvement in customer satisfaction
Process Improvement and innovationAT&TCustomer Services•AI and Machine Learning applications
•Efficient customer assistance • Optimized schedules for technicians • ML-based incident management program managed 15 million alarms per day
InnovationGlobe TelecomProduct and customer experience•Implemented ML and cloud to enhance omnichannel customer experience
• Bette business decision • Improved customer experience •Boosted product optimization
Process Improvement and innovationDeutsche TelekomCustomer Service•Chatbot called Tinka: Similar to a search engine
•Processes about 80% of the queries and reduces the load on employees.

To learn more about digital transformation, you can also read:

You can also check our sortable/filterable list of digital transformation consulting companies to find the most suitable option according to your business needs.

If you have questions about digital transformation in telecommunications, let us know:

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Access Cem's 2 decades of B2B tech experience as a tech consultant, enterprise leader, startup entrepreneur & industry analyst. Leverage insights informing top Fortune 500 every month.
Cem Dilmegani
Principal Analyst
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Shehmir Javaid
Shehmir Javaid is an industry analyst in AIMultiple. He has a background in logistics and supply chain technology research. He completed his MSc in logistics and operations management and Bachelor's in international business administration From Cardiff University UK.

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