The changing role of telcos

Johannesburg, 30 Mar 2021
Read time 5min 50sec
Sudipto Moitra, General Manager: ICT, MTN Business.
Sudipto Moitra, General Manager: ICT, MTN Business.

Partnerships, leveraging existing assets, aggregation and connectivity are key factors if telcos wish to be regarded as significant ICT role players, says Sudipto Moitra, General Manager for ICT at MTN Business.

“In order to move up the ICT stack, the telco needs to move from being a core mobile and connectivity provider, to become a provider of non-core mobile, ICT fixed, IOT, ICT infrastructure and security solutions."

This journey is a progression, says Moitra, and to be embarked upon through partnerships and with the end-customer’s requirements in mind.

The majority of telcos still see the bulk of their business from a core mobile perspective. But they have to embark on a trajectory to move to non-core mobile and then ICT fixed business – or connectivity – in order to become ICT players. “The market is demanding more converging connectivity, and security has to be inherent across the board. When we talk about moving up the stack, we need to ensure that security is embedded at each level. This is the path that any telco has to embark on.”

Telcos need to extend their offering and shift towards being able to offer or support advanced ICT services such as big data, robotics, software and services, and artificial intelligence to increase their wallet share.

In order to achieve this, telcos need to work through partners, establishing partnerships with SMEs to deliver services instead of developing competencies internally. “The telco becomes a service aggregator, bringing together the services required by the end-user so that they only deal with the telco instead of a series of providers, with the telco providing managed services.”

The aim is to adopt an agnostic, multi-vendor approach that enables the telco to become the customer’s digital partner, providing them with access to innovation accelerators in the space of big data, robotics, software and services and AI. The partnerships extend across SMEs, large enterprise, public sector and private enterprise.

Moitra says: “Research predicts significant growth in the local ICT market in the next five years, with the growth coming largely from emerging technology, and not connectivity, which is where telcos currently play. This is why we need to shift our focus to emerging tech, specifically IOT, data centres, cloud, big data and unified communications as this is where opportunity lies.”

It’s important to note that customers aren’t buying connectivity in isolation, they’re demanding an aggregation function from their telco – and this capability becomes pivotal to retaining an existing customer base and remaining relevant to new customers. “Telcos have to look at what customers want to do with their data, the new ways that they’re working, how they connect with their clients, and identify where they can fulfil a need, which requires investment in emerging technology so the telco can bundle other solutions and services with connectivity and move up the stack.”

He highlights four key areas of interest for telcos: IOT, security, cloud and big data.

The core of IOT is connectivity, but additional opportunities exist around sensors, software and managed service. The main aim here is for the telco to invest in platforms to become a platform-led operator. A partner ecosystem is required, with each partner bringing their own unique value proposition. “The telco needs to invest in 5G and base stations but has to partner with other technology providers to build vertical solutions to leverage that investment and be relevant.”

When it comes to cloud, telcos with data centres are in a strong position as hybrid cloud is very relevant, with clients not wanting to move all of their workloads to the public cloud. This gives telcos an opportunity to leverage their current investments such as data centres.

Moitra says this principle applies across all segments: “Telcos need to consider how they can best leverage their existing investments into technologies such as hosting, edge computing, etc. By taking an agnostic approach, focusing on as-a-service offerings and bundling those with connectivity, they can adopt an application-led approach. They need to eventually become a master systems aggregator in the market, choosing their strengths, identifying where they can leverage existing assets and build on that.”

A different approach is required for security deployments. “Telcos need to take a compliance- and GRC-led approach. They need to seek out the right vendors to partner and become an aggregator, integrating the required solutions, chosen on an agnostic basis, and relying on the right partnerships to implement these."

Finally, fixed and unified communications require different platforms for different segments. Customers want a hosted platform on the cloud that’s scalable and flexible from a contractual point of view – this last point applies equally to unified communications and connectivity.

“Building networks for different segments represents a massive investment for a telco, so it’s key to be able to leverage that investment for other businesses in other verticals. Unified communications requires a platform-led approach, with each user wanting their own solution. SME partnerships come to the fore here so that the telco can bundle solutions into a catalogue to meet the customer’s requirements.”

In summary, telcos wanting to move up the ICT stack need to look at leveraging their existing assets, including investments in data centres, connectivity, 5G and modernising the network. They need to work with different OEMs and create the right partnerships to expand their portfolio while taking an agnostic-led approach to bundled solutions. This will enable them to provide a one-stop-shop through aggregation.

In addition to partnering SMEs with assets that can add value, the telco can co-innovate with partners, especially in the IOT space. It’s important to keep innovating technology that can offer a better value proposition – and partnering the SMEs that do so – to deliver a strong customer experience journey. The cloud and connectivity are part of the bundle. It’s impossible to have one solution for all industries, so telcos need to focus on vertical solutions, embedding IOT and leveraging connectivity at the heart of everything they do.

Moitra’s parting piece of advice to telcos is as follows: “If you have the brand, you have the customers, you have the connectivity and you have a strategy, you aren’t starting from zero, you just need to enhance these to be relevant to the market. It calls for a spirit of co-creation, partnerships and aggregation.”

See also