Digital transformation amidst Covid-19: How telco companies are adapting to disruption
Jon Sasserath, Head of our Digital Transformation Practice, discusses the role new technologies have played in the telco sector and how digital transformation is playing a part in their response to the Covid-19 pandemic
The story so far
Th UK telecommunications sector has been in a period of growth and transformation for some time, responding to increasing demand and competitive pressures. The major driver of this change has been technology and increased connectivity requirements. Over this past year we have seen critical discussions take place around the roll-out of the next generation of faster mobile technology, 5G. While the mobile phone market is already tapped into by and large, with 96% of the adult population in the UK having a mobile phone, the Internet of Things has been a new development for the telecommunications industry and has taken off quickly. There are now 8 million ‘things’ connected to mobile networks in the UK with more room for expansion as products using the ‘machine to machine’ technology continue to emerge – we are expecting to see the number of connections rise rapidly as smart meters are rolled out and M2M is used for applications such as the connected car, livestock tracking and environmental monitoring.
As the industry has grown and expanded to provide new services for increased connectivity in our rapidly digitising and globalised world, telco is considered a critical core infrastructure capability, alongside the energy and utilities providers. The communications services in the UK provide immense socio-economic value. On a consumer level, mobile phones now are a social inclusion tool enabling more people to access the internet, government services, healthcare and banking. On the economic side, mobile communications support a supply chain of infrastructure, equipment, applications and content providers that accounts for 75,000 jobs.
The newly arisen Covid-19 challenges
Since the start of 2020 the world has experienced unexpected and unprecedented disruption in the form of the Covid-19 pandemic. This has tragically impacted the lives of so many people and has had a huge impact on businesses large and small. We all rely on the providers of critical national infrastructure at such a time, and our telecommunications providers are key to all of us. The crisis has shone a brighter light on how important communications and connectivity now is to all of us, both in our professional and social lives.
However, the past few months of increased use of mobile services during the Covid-19 pandemic has been a great challenge for telco providers. Our reliance on mobile networks has caused an unprecedented spike in demand and strain on the network. These unusual patterns of usage, caused by the shift from commercial to domestic use and the massive increase in the use of on-line services for remote working, video conferencing, online learning, online shopping and banking, has been difficult to manage.
Not only has the network not been tested for such high levels of activity, but the industry, like many others in the UK, has been operating with a reduced workforce. With the lockdown measures in place, organisations have had to close premises to comply with safe working protocols. For many, the shift of back-office activity to remote working has been seamless but many other operations have been impacted greatly. Essential work, such as maintenance activity and the much-needed network upgrades have needed to be risk assessed and managed differently in order to safely deploy staff and ensure service continuity during this health emergency.
The industry has responded with energy and urgency, taking a collaborative approach to overcoming the challenges arising from the pandemic. Ofcom was prompt in its decisions to support and direct telco providers while ensuring the safety and security of the industry and customers. Working unitedly with the Government and leading industry organisations, there have been several emergency measures agreed upon to support customers through the challenges they will face as a result of the pandemic, as well as the regulator taking a slightly more lenient approach to enforcement in recognition of the significant challenges providers will face when prioritising their Covid-19 response. There has been a commitment from all to ensure customers are able to stay connected in these times of uncertainty, whether through more generous service packages, support in paying bills or prioritising maintenance work for vulnerable customers.
Working through this crisis and preparing for the future, telcos are accelerating their digital transformation to institutionalise new ways of working. Not only have we already seen sharp pivots to enable remote working for their back-office operations, but this will be developed further to provide a more consistent omnichannel digital experience for consumers and businesses. We will see a focus on digital self-service using artificial intelligence (AI) to augment call centres and retail stores, providing a streamlined process driven by in-depth customer insights.
Automation will also be a core investment for the management of network operations, with telcos developing hybrid network architectures with the use of cloud IT systems incorporating AI and machine learning technologies. Building a more agile system will enable providers to accommodate and balance major shifts in workload - this technology is a must given the current challenges of network usage spikes and the shift from commercial to domestic use which is expected to continue as we settle into this ‘new normal’.
Moving forward, we will also see more cases of traditional telcos re-inventing themselves as a platform business, operating as both Digital Services Providers and Digital Services Enablers. This is a trend we have already seen with industry mergers, partnerships and JV’s – such as BT/EE and Virgin/O2.
The coming months, and even years, will see the telcos undertaking large-scale and complex transformation programmes to continue to adapt to the new demands of consumers and businesses, as well as adapt to the technological advancements we have seen in the industry. To guide and direct these, telcos will need subject matter expertise and objective independent leadership to ensure an efficient, well-established and long-lasting solution to these impending strategic and transformational questions. While the most standard approach is to seek out management consultancy services, this comes at a high cost. An alternative is the use of highly skilled, high impact independent consultants: alumni from the likes of McKinsey, BCG, Bain and the Big 4, now operating as objective independents offering consultancy expertise.
For more information please contact Jon Sasserath.