Digital Transformation & Maturity

Operators must change their game plan to compete

Traditional growth for communications service providers (CSPs) is eroding at an alarming rate. Forecasts state that operators’ share of the global industry profit pool will drop to 45% in 2018 from 58% in 2010.

Shareholder performance, revenue growth and future positioning are fundamental issues for CSPs, which could threaten the very existence of some players. But it doesn’t have to mean the end if they make vital changes to their business models quickly.

The digitization of enterprise processes is a top priority for business leaders today, with an initial focus on cost efficiency, but gradually it is evolving to end-to-end process innovation. This transition is happening thanks to the rapid development of new technologies such as AI, blockchain and 5G, enabled by a more diverse and open ecosystem. Within that new ecosystem lies an enormous opportunity for CSPs and the key to winning in an all-digital world.

One of the more aggressive growth scenarios open to CSPs is to evolve current connectivity services to enter the emerging value chains of platforms. The network as a service based on unique capabilities e.g. trust and proximity.

The core is a context-aware, pervasive network that provides cost-effective connectivity coupled with ubiquitous compute capabilities. Data-heavy analytics in the field and applications requiring low latency are the two main drivers of this capability. The change allows for a transaction-based business model depending on reach and intrinsic value throughout the digital enterprise process.

On average, 24% of CSP revenue is business-to-business (B2B), yet there is a huge market potential created by the establishment of pervasive networks that CSPs are not addressing today. They must act quickly or risk losing out on a huge opportunity.

New network needs

As processes within the enterprise become more digital, CSPs need to take an active role in building a pervasive and context-aware network, with new tradable assets to shift the monetization model away from commodities such as data and voice connectivity. This new business model is built on an open API infrastructure enabled by microservices and a dynamic programmable network, with embedded intelligence that enables digital transformation projects for enterprise clients.

To be successful, CSPs need to expose a new, or augmented, set of network features in real-time to enterprises, such as dynamic connectivity in network slices, on-demand mobile-edge computing or traceable secure transactions. They also need to be able to place the enterprise application in the right location at the right time.

One prime example is the potential for CSPs to serve manufacturing companies. Already in industrial plants, low latency 5G networks can enable engineers to use remote-controlled (haptic), or augmented reality for critical interventions or process improvements, in addition to drawing insights from data in the field.

Imagine, as the engine or other machinery leaves the plant travelling in a car fitted with sensors, it collects a tremendous amount of data that would otherwise be cost prohibitive to acquire. The data, thanks to the pervasive network, can be analyzed in the field and the business-critical information can be transferred safely at a greatly reduced cost.

These insights can then inform production to improve anything from the design of the engine, to making the manufacturing process more efficient or improving engine functionality. CSPs could offer the enterprise the best ubiquitous connectivity for the connected object and process – e.g., a connected supply chain service – with a monetization plan led by the business transaction.

By delivering that service, CSPs also benefit from understanding the context of the specific transaction and can use that data, plus cognitive intelligence and AI, to create a more effective platform on which to base the process. This information is then used to trade with the larger ecosystem, including insurance, blockchain or product lifecycle management partners. In this way CSPs bring value to the digital enterprise, the ecosystem and the end consumer.

By offering the most effective network in a country, combined with best global reach, CSPs are well positioned for growth. They can take a leading role in the road to Industry X.0 – the emerging modern enterprise combining communications, IT data and physical elements that enable the industrial internet of things.


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