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Facts / November 8, 2019

[:en]As technology continues to advance and consumer expectations continue to grow, companies from all around the globe can no longer put off adopting a digital-centric approach when it comes to the way in which they do business. This is especially true for the telecoms industry. However, research has shown that it is this sector that is lagging behind.

In many ways, the leading reason for this is that Communications Service Providers (CSPs) are growing increasingly concerned about their organisational and cultural obstacles which, in turn, are drastically slowing down the process of digitisation. This is despite the fact that the TM Forum (a global industry association that drives the digital transformation of the communications industry through collaboration) claims that 60% of surveyed CSPs have already embarked on or are about to embark on their digital transformation journey.

Ultimately, something needs to be done to aid telecoms companies in overcoming these challenges that are preventing them from fully taking advantage of the power of digital. At the end of the day, driving growth tomorrow means driving digitisation today!

But, Why Is Digital Transformation so Important?

The short answer is that if companies neglect to digitise, they are sure to fall behind within their industry, caught in the dust of their competitors who are embracing it full-force. Without digital resources and relevant market offerings, CSPs will also be unable to provide the consumer with the quality of experience that they have come to expect. Taking this into consideration, along with the fact that the constantly increasing scope and use of smartphones have opened up opportunities to allow for better communication, engagement and delivery of services which, in many ways, are a lot faster and more efficient than traditional mediums. And, then it becomes fairly obvious why digital transformation is not only important, but absolutely essential.

The Telecoms Industry Is Declining Rapidly

Due to the fact that the industry has not managed to leverage digital transformation fast enough, there is no denying that it is currently on the decline. This is proven by various statistics released in a recent McKinsey report. According to the report, the growth of revenue is down 4,5 percent to 4 percent. Furthermore, EBITDA margins have fallen from 25 percent to 17 percent, and cash-flow margins have plummeted from 15,6 to 8 percent. The report also highlights that data revenue currently accounts for around 65 percent of the total revenues within the telecoms sector.

How to Begin the Process of Digitisation

So, if you are sold on following the digitisation trend, you may be wondering where you should start. It is important to consider both the internal and external aspects of a business when it comes to digital transformation. For instance, the internal aspect focuses on optimising business agility and general efficiency, whereas the external aspect will be centred on improving the overall consumer experience and perhaps offering new digital services that help the business stand out from its competitors, both on a local and a global scale.

Basically, the key to ensuring successful implementation of the digital transformation journey lies in applying it to all aspects of the business. This goes for customer strategy, technology, operations, culture and, perhaps most importantly, the company’s employees. All employees need to be thoroughly trained and fully on board to go ahead with the change if it is to all come together seamlessly. Digitisation is a group effort and requires patience and dedication from all sides of a business. However, while arduous in many respects, if done correctly, digitisation affords CSPs the opportunity not only to see a substantial improvement in profits, but also to capture new markets, rebuild market positions, replenish outdated business processes and systems, and more!


Contact AFR-IX telecom for more information about digital transformation today.