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75% of telcos to spend more on digital transformation in 2021

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A new research report find that the same percentage still rely heavily on stores and call centres for revenues.

Three-quarters of telcos are increasing their digital transformation investments this year in response to huge demand for connectivity driven by the pandemic.

About 65% of telcos have a roadmap for their own digital transformation but only 25% have established what metrics to use to measure their own success. In other words, there is a huge disconnect between top-line strategy and the tactical deployment of digital projects to attain the overall goal.

Operators rely predominantly on physical channels to sell their products and services, although they are aware of the value that digital sales can create for them.

That’s according to a new report, The Road to Digital, from the Technology Innovation Council (TIC), commissioned by mobile technology specialists, Upstream.

Digital value


The telcos surveyed listed the top benefits to their businesses from digitalisation as being: reduced costs via automation (66%); better customer experience (59%); improved revenue growth (46%); efficiencies through automation; and more effective marketing.

At the same time, telcos’ top five perceived challenges for turning to digital are: integrating new solutions with existing technologies and platforms (73%); privacy and data concerns (54%); cost of new solutions (46%); establishing the return on investment (43%); and, internal skillsets (34%), or rather the lack of them.

Maniatis  said, “These are totally legitimate concerns. For instance, how can you improve customer experience by going online, when you still haven’t figured out how to make online transactions safe?
To succeed in creating value from digitalization and fast, telcos need to indeed balance a fine line, overcome the big organisation inertia, escape the drawing board and aim for smart quick wins and solutions”.

Are telcos selling online?

During a year with enforced lockdowns and closure of physical stores, operators did go online to sell their products, but more than 70% of respondents said they still generate revenues predominantly from physical stores and call centres.

“There is a quick win to be made for telcos in digital sales. They are less costly than stores and call centres, have proven higher success rates and allow more accurate targeting than physical channels”, said Kostas Kastanis, Upstream’s Deputy CEO.

“The consumers are already online, some will never return to close-up transactions, as they did before the pandemic”, he added.

Europe in the middle

North American telcos have the highest digitally driven revenue in the world with 45% from digital channels, followed by APAC, including Japan and Singapore, at 39%.

In the Middle East and Africa 72% of sales of physical rather than digital, while in Latin America 100% of telcos say they mostly rely on physical channels.

European operators are somewhere in the middle, with 57% having switched from physical channels and now deriving 29% of revenues mostly from digital sales.

Interestingly American operators have jumped headfirst into digital sales: switching to digital channels is the number one step 91% of them report in their digital transformation journeys.

On the other hand, their European counterparts prioritised digital transformation roadmaps and change management strategies.