Over the last year, we’ve seen a rapid increase in industry digitalization across almost every industry vertical. The pandemic has forced all kinds of businesses to rethink how they interact with both their employees and their customers and consider how technology will change how we live and work.
The new normal has also had an impact on the telecom sector, which has seen a 40 percent increase in data traffic globally – as well as an 80 percent decrease in roaming revenue. However, to truly future-proof their businesses, it’s essential for service providers to think beyond these immediate shifts in the market landscape – and accelerate their own digital transformations.
At a recent event hosted by Ericsson, Nik Willets, CEO of TM Forum, discussed what tomorrow’s service provider will look like. Here, we share are some of the highlights.
The changing role of the service provider
Technologies like 5G, IoT and the cloud are rapidly changing the communications industry. For the first time, service providers have the opportunity to transform their technology environments so they can establish a firm footing in the largely untapped enterprise market. To do so, service providers must evolve from connectivity providers to enterprise service creators. Also, especially in IoT world, importance of business partnerships becomes essential for success.
In order to succeed in this transformation and create an outstanding level of value for enterprises and IoT partners, service providers need to enter new application ecosystems that include a larger network of vendors, service providers, systems integrators and hyperscale cloud providers.
Collaboration and co-creation with these ecosystem partners have become paramount. Service providers must focus on building strategic alliances that allow each partner to leverage each other’s strengths to secure future success.
What is a true digital service provider?
Put simply: digital service providers use a variety of new technologies, such as 5G, AI, IoT and cloud services, that allow them to explore new market territories and opportunities for growth.
The challenge for our industry is unlocking this growth. If we look at the trajectory for most service providers today, we can see it’s guided by a siloed digital transformation – leading them to becoming a more digital telecommunications business, but not a truly digital service provider or multi-service operator.
To become a digital service provider requires a deeper level of transformation. In order to unlock the growth potential of 5G and enable new enterprise services beyond connectivity, service providers have to:
- Embrace new business and operating models, including multisided and enterprise business models.
- Establish new ways of working such as CI/CD and DevSecOps
- Continuously innovative and learn to move at the pace of the market
- Build the new aforementioned ecosystem partnerships
The new operating model for service providers
For those who want to capture new growth and play a meaningful role in the new digital ecosystem, they have to make the transition from being a connectivity provider to a true digital service provider. According to TM Forum’s research, over 70 percent of future revenue opportunities can be captured in this environment requires a more fundamental operating model transformation.
This means service providers must move away from the traditional value chain where they sell connectivity to others who then use it to create and offer services. Connectivity will soon be just one of the capabilities and technologies that underpins a whole set of services and use cases for multiple industries in different ways.
The key capabilities that will characterize the future service provider include:
- End-to-end business agility: to meet emerging market requirements, service providers need to reduce time to market and be able to launch new services in a matter of days, not months and deliver new features in minutes.
- Cost optimization: service providers need to drive dramatic cost efficiencies, not just because of the increasing pressure from the competition, but because the margins for new services are lower.
- Digital experience and trust: the truth is that today many people rarely want to or need to interact with a human being. Service providers must prepare themselves for a world where 100 percent of customer interactions are digital, and individuals and businesses manage their own services through a dashboard or digital platform.
- Partnerships with enterprises and IoT partners, together with systems and capabilities to support this new business landscape
To make this possible, a radical transformation of IT operations, BSS and OSS is required. Service providers have to move away from thinking about OSS and BSS in a traditional architecture sense and begin thinking about what’s happening through the entire technology stack and the business – all the way from the people to the network.
We must be driven by intelligent operations built on a flexible platform with a modern software architecture sitting on a virtualized infrastructure. With this, service providers can move towards zero-touch interoperability and quickly partner with other ecosystem players – without the technological and cultural barriers that we see today.
If service providers choose to evolve into a truly digital service provider, they can secure their place at the heart of the digital revolution that’s been so long awaited.
This blog post was adapted from a discussion at our recent BSS Days Live event. This event is open to all Ericsson BSS customers. If you missed the first sessions just contact your Ericsson partner and we will provide you the opportunity to listen in on-demand.
Want to know more?
Learn more about TM Forum’s digital service provider blueprint
What we know: a look at current 5G market trends
BSS days live 2020 highlights
Read more about Ericsson ConsumerLab trends.
Read more about BSS for the 5G era.
Related reading:
MIT Technology Review Insights report: The 5G operator
