Defining the leaders of the future

Estimated reading time:2 minutes, 40 seconds

It has been clear for some time now that mobile connectivity is outpacing fixed-line connectivity as the communications growth is being driven mainly in developing countries that are typically characterized by poor fixed infrastructure. Mobile communications offer a cheaper and more efficient solution to connectivity and have surged in usage and applications. However, in the past several years, telecom companies in many markets have come under significant pressure from Internet-based over-the-top (OTT) players.

Voice communications have been commoditized to a large degree from the advent of OTT applications, and for many operators data (non-voice) revenues have been their saving grace. On the cost side, heavy network and IT investments along with increasing operating expenditures reduced telco profit margins and cash flows significantly, placing them under financial pressure. The global telecom industry is faced by vulnerabilities that in my opinion can only be overcome through the adoption of five key transformational stances.

  1. Operational cost transformation through digitization: Telecom operators need to undergo significant transformation to reduce heavy cost of their network maintenance, site leases, marketing and human resources. They need a new approach to costs; and this cost reduction drive requires a completely different mindset and reorganization of value drivers. It also requires digitization of internal processes.
  2. The search for growth: High margin voice and SMS revenues have been under tremendous pressure from OTT players. Telecom operators, instead of purely investing in their traditional networks, will have to find ways to diversify into the digital value chain by investing in, acquiring or partnering with nascent digital players. The search for the new growth verticals will be expedited in the coming years.
  3. Defending and growing core revenue with artificial intelligence: Customer experience and enhancing customer value are key concepts in today’s telco sector. Telecom operators have begun to adopt artificial intelligence tools to protect their core voice and data revenues. Leveraging technology allows them to provide individualized voice and data offers to specific customer microsegments, by linking value to share of wallet, and I see this trend ramping up as AI becomes mainstream.
  4. Smart network investments: A major trend in telecom is the explosion in the number of connected devices and the internet of things (IOT), which is forecast to grow to over 30 billion units installed in 2020 representing an approximately 20-fold increase from 2011 according to various sources. The significant growth of these devices will result in an astronomical increase in data usage, which will require major network investments. The swing back from mobile to fixed and the adoption of cloud technologies will also become central, as mobile networks are increasingly reliant on powerful fixed backhaul.
  5. Demand in strong human capital: Technology is advancing rapidly, however, organizations move at a slower pace. Many telecom operators still retain outdated industrial age structures and practices. The demand for new human capital who can adopt new working models and digital practices has emerged. I firmly see this as one of the biggest opportunities in the future.

As the leading mobile telecom operator in Lebanon, touch is successfully executing its Digital Network Accelerator (DNA) strategy, which epitomizes the five points raised above, and I firmly believe that the leaders of the future are the ones who are taking disruptive actions today.