John is part of the BSS practice in Analysys Mason’s Telecoms Software Research team. He leads the Revenue Management programme and contributes to mobile money research for the Digital Economy Software Strategies programme. John has been part of the telecoms industry since 2006, and joined Analysys Mason in early 2012. He has worked on a range of telco projects in Africa, Europe, India and the Middle East.
June 2017 | The Internet era has had a significant impact on the telecoms industry, with increasing competition, declining revenue from traditional services, changing customer preferences and new business models. Customer expectations too have evolved significantly in this period, driven by the rise of the Internet-based companies (such as Amazon and Google) that allow customers greater control over their engagement and interactions. Customers have become accustomed to a seamless user experience and real-time control of their services – and they expect nothing less from their CSPs. CSPs are therefore under pressure to improve digital user experience, while also providing a consistent interface with their legacy platform.
CSPs however have retained some inherent advantages (such as their existing customer relationships and network infrastructure) that give them invaluable leverage in becoming an essential part of the new digital economy. Telecoms operators worldwide are exploring ways to defend against the competitive threats of digital economy players while capitalising on their strengths and network infrastructure to become a more-integrated part of the digital economy. This is driving CSPs to transform themselves from simple CSPs into digital service providers (DSP).
The transformation of a CSP to a DSP from the perspective of its customers will principally mean that they receive a consistent digital experience, comparable to their engagement with other online companies. CSPs must take three essential steps on the journey to becoming a DSP. First, a CSP must first transform the way that it interacts with its retail customers to become a DSP. The second step in becoming a DSP involves becoming a provider of a new generation of ‘digital economy’ services.And finally, a new agile network will be essential to support the new agile business cases. Each step represents a major transformation in the sphere of operations, services or networks.
CSPs agree that there is no one-size-fits-all approach to becoming a DSP. While the transformation path that each CSP adopts is unique, Analysys Mason has identified the three most important criteria that define every CSPs transformation journey.
Analysys Mason’s survey of the digital transformation approaches of 34 CSPs from both developed and emerging markets highlights how different priorities impacts CSPs approach transformation (figure 1). For instance over 50% of CSPs in Western Europe are in favour of deploying adjunct support platforms while a similar percentage in emerging markets favour complete end-to-end transformation. Even among the large percentage of emerging market CSPs that intend to continue using their current systems, many are planning an adjunct update from the same vendor. This is mostly because in the past, several CSPs in developed markets have made multiple attempts at large-scale transformations of their support systems with limited success. This has made many CSPs in developed markets apprehensive about large-scale transformation projects. On the other hand, most CSPs in emerging markets view large end-to-end transformations favourably as an opportunity to completely revamp and revive their ageing support infrastructure, thereby cutting down on expensive maintenance.
The CSP-to-DSP transformation is perhaps the most important operational issue facing today’s CSPs, as they place increasing emphasis on providing compelling customer engagements and improving experiences across multiple channels. The key challenge for a CSP is to maintain operational continuity and procedural compliance as its underlying support systems are transformed. That each CSPs digitisation journey is a unique path only adds to the complexity of the transformation since there is limited consensus on the ideal digital transformation path. CSPs howeverfirmly agree on this – that their future is closely aligned to the successful digital transformation of their operations.