Digital transformation for 2020 and beyond, an EY study on the Telecommunications industry
By Rahul Gautam, Americas TMT Advisory Leader
The views in this blog post are the views of the author, not EY.
EY’s global telecommunications study Digital transformation for 2020 and beyond is a landmark report based on interviews with 39 senior executives from the telecommunications industry. Taken together, interviewees represent organizations that generate US$421 billion in turnover and which boast a combined market capitalization of over US$600 billion.
The messages coming from our interviews with senior IT and networks executives were illuminating and thought-provoking. Disruption is here to stay, new digital business models are as important as a winning customer experience, and operators must take bold steps to ensure their organizations can adapt and flourish in the digital age.
While CTOs and CIOs see analytics as the top driver of innovation and process automation as the principal driver of long-term operational excellence, the burden of legacy IT and a lack of digital skills threaten to undermine the transformation journey. All operators view the arrival of 5G and IoT with optimism, but only a holistic approach to organizational overhaul will allow telcos to flourish in an increasingly dynamic environment.
Key takeaways from the survey include:
Disruptive competition tops the list of industry challenges
- Disruptive competition is cited by 74% of participants as the leading sector challenge.
- Lack of organizational agility was cited by 47% of respondents as the number two challenge.
- Regulatory uncertainty ranks lower as a perceived industry challenge when compared with our previous study.
Digital business models, customer experience and cost control rank highest as strategic priorities
- Digital business models (71%), customer experience (61%), and cost control and business efficiencies (53%) are cited by more than half of participants.
- Participants cite customer experience improvements as a driver for other priorities, including IT systems overhaul and increased organizational agility.
Operator confidence in the digital services opportunity is growing
- TV and video, B2B cloud and advertising ande-commerce are the top three drivers of incremental revenue growth.
- However, smart home, connected car, security services and smart city have improved their scores since our 2015 study.
Process automation leads the list of long-term IT enablers
- 71% of respondents cite process automation as a key driver of long-term operational excellence.
Operators see 5G having the greatest impact on the industry beyond 2020
- The most important network technologies over the next five years are 5G (77%) and IoT (57%).
- Supporting investments in small cells and 4.5G underscore in terms of perceived impact.
You can find the full report here.