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Telecom Business Review | Wednesday, April 13, 2022
There is an opportunity for telcos to capture value beyond connectivity due to changes in the industry's structure and technological capabilities.
FREMONT, CA: The operators' core business has become increasingly commoditized, and growth has slowed despite their enormous investments to adapt to successive waves of new technology. Rather than focusing on capturing a large part of the value created in the industry, the vast majority has been captured by so-called edge players - those who design and manufacture handsets, develop apps, build infrastructures, and provide streaming and other types of digital services.
In recent years, tech companies have enjoyed a distinct advantage in terms of their ability to reach global markets. Indeed, there are still some giants in the digital space. Still, as the market for digital services matures, more and more players are emerging that cater to the tastes and preferences of local consumers and offer alternatives to those offered by the global giants. The leading tech players had their pick of the best technical talent needed to build innovative solutions for a long time. Telcos had to play catchup in this area because they had to compete for talent with leading tech companies.
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Nevertheless, operators wishing to expand into digital businesses shouldn't be hindered by a lack of technological know-how. Even though cutting-edge innovation still relies on outstanding talent, outstanding talent remains in high demand. There is less scarcity of more general tech skills today, though they are not yet ubiquitous. A further advantage of today's tools and software is that it has become much easier for developers to create digital services.
Corporate clients can benefit from big data services, business insights, and data consulting services from some companies that use the data they collect from their customer interactions. For example, analytic and aggregated data can be used by retailers to determine how many people visit their physical and online stores and what duration and frequency they visit. Government departments can use anonymized and aggregated data to plan road traffic controls. Several telecommunications companies are developing a portfolio of digital service businesses that generate new revenue and strengthen their core competencies.
In order to conduct analysis and produce insights, as well as offer target market offerings, market research companies, ecosystem companies, and marketplace companies require a large subscriber base to provide enough data on which to conduct analysis. Telcos must enjoy a high level of user engagement to succeed in both ecosystems and marketplaces.
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