From Telco to Techco: How CSPs Can Regain Control of Their Operations
How CSPs Can Regain Control of Their Operations
Part 1: The Ingredients for Techco Success
Communications service providers (CSPs) have undergone a decades-long transformation, gradually moving away from vertically integrated telecommunications monopolies toward specialized connectivity providers. This transformation was fueled by significant capital expenditures aimed at ensuring seamless delivery of connectivity, encompassing voice, data, messaging, video, and value-added services (VAS), for both consumers and enterprises.
Recently, CSPs have prioritized digital transformation to stay ahead of technological innovations and streamline operations by becoming lean operators. To achieve their objective, they outsourced most of their core competencies to a select few large third-party providers, comprising independent software vendors (ISVs), system integrators (SIs), consultancies and hyperscalers. Attempts to venture into adjacent activities, like media production, were unsuccessful due to the CSPs’ organizational structures being unsuitable for activities unrelated to network operations.
Digital transformation produced substantial advancements in technology and operations but fell short of lifting CSPs to the same level as other tech companies in terms of revenue growth, profitability and market capitalization.
The recent shift toward becoming techcos reflects the intention of CSPs to morph into business enablers instead of just being delivery organizations. This involves achieving greater self-sufficiency by regaining control of their core competencies from large third-party suppliers.
Compared to the incremental approach of digital transformation, techcos must reinvent their entire organizations. Techcos must address the most pressing challenges facing the industry today:
- How to shift from network-based architectures to software-driven, service development architectures.
- How to promptly respond to customer needs by quickly launching and innovating new products, overcoming long development cycles.
- How to migrate legacy infrastructure to the public, private or hybrid cloud.
- How to reinvent their organizational setup to foster internal innovation and develop the necessary skills.
- How to manage and orchestrate digital value chains instead of relying on a small number of large suppliers.
This blog series illuminates the five elements necessary for transitioning from a traditional telecommunications company to a techco.
Modern CSP IT systems should be based on an open, standards-based, modular and cloud-native foundation, with support of intelligent orchestration, automation and a modernized, consolidated BSS/OSS.
Customer and Partner Centricity
CSPs must rapidly launch new services that are cognitive, transactional, interaction and event-based.
Business Model Reinvention
CSPs must become agile, DevOps-governed software development companies that excel in developing or co-developing their own code to successfully redirect their focus from consumers to the B2B segment.
CSPs must develop specialist knowledge and skills in cloud, automation and orchestration, as well as artificial intelligence and machine learning technologies that driven by CI/CT/CD, DevSecOps and other industry best practices.
CSPs must orchestrate a new platform-as-a-service business model that spans various different industries, partners, ecosystems and value chains.