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How Telcos Avoid the Digital Disruption Trend in 2017

Industries that have always embraced the adoption of new technologies are not immune to being digitally disrupted by savvy new market entrants. The global telecom service provider market had a long history of relative stability. Now, however, business model disruption is pervasive.

The market is in a state of rapid evolution, with telecommunications companies now competing against more progressive web-scale companies. They can deploy a new service in a matter of hours, thereby delivering real-time experiences to their online subscribers.

As more customers demand instant access for digital services, ABI Research predicts many Tier One telcos will transform into digital service providers (DSPs), in order to compete more effectively with over-the-top (OTT) players -- such as Google and Facebook.

Digital Services Market Development

"Digital transformation is the ultimate goal for telecom network operators. For instance, T-Mobile Un-Carrier digital offerings likely played a huge role in boosting the company's total revenue by 48 percent over the past three years," says Sabir Rafiq, research analyst at ABI Research.

But it may not be possible for all. While Tier One telecom service providers will likely transform to into full-service DSPs, smaller telcos may remain purely internet access-oriented.

An industry misconception is that telcos simply need to upgrade their traditional operations support systems (OSS) and business support systems (BSS) in order to undergo the required digital transformation. According to the ABI assessment, this approach will not enable telcos to survive the long-term disruptions.

"BSS and OSSs are reactive platforms capable of providing telcos with basic services, such as configuration management and billing," continues Rafiq. "Now is the time that telcos need to be investing in DevOps and Agile development models."

Only then will telcos be able to rapidly launch new services and improve their new offerings post launch, in real-time, as they receive detrimental feedback from customers.

Outlook for Telco Digital Transformation

Savvy telecom service providers can work toward completing the digital transformation by deriving analytics from the vast amounts of data they hold, aggregating the analytics to provide valuable insights, and then consolidating IT and communication platforms to build an ICT infrastructure.

This will enable the creation of new types of services, and potentially generate an agile environment that is proactive, rather than reactive to market changes.

"Digital transformation should be on the minds of all telcos right now, and they need all of the help that is available to them," concludes Rafiq.

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