Digital Transformation: The Future of CX in Telecoms

The idea of digital transformation in telecoms is neither new, nor novel. Most telecoms organisations understand that they need to tackle a digital business transformation to ensure long-term sustainability, expand (and fortify) their customer bases and supply their business with the required agility for responding to changing consumer behaviors and expectations.

Published ·December 21, 2021

Reading time·9 min

For the past decade, the telecoms industry has dealt with the type of wall-to-wall disruption that can only be overcome through transformation. When polled in 2017, 71% of major telecommunications organisations around the world said moving to a digital business model and providing digital services was their No. 1 strategic priority for 2020.  

But then COVID-19 hit and all long-term plans were placed on hold.   

COVID-19 Accelerates Digital Transformation in Telecoms 

The challenges these organisations face as we move towards a new normal are very much the same as those that were being grappled with pre-pandemic. All that is different since March 2020 is that overcoming these challenges has taken on a greater sense of urgency – 75% of telecoms operators globally are preparing to increase their investments in digital channels this year and 65% say they now have a clear roadmap for digitalisation. Not only did COVID-19 accelerate the need for telecoms providers to change their approach to CX, but also to transform – fast.  

Why is digital transformation in telecoms so important? As the smartphone moved from unusual to everywhere, traditional sources of revenue within the telecoms industry started to shrink. Why make a phone call when you can FaceTime, instead? Why send an SMS when WhatsApp and Facebook Messenger provide a richer yet lower-cost experience? In 2019, voice was worth $381 billion in revenue for mobile operators and it’s forecast that before 2024, this figure could fall by 45% to $208 billion

Likewise, there is less need to subscribe to a premium cable package when there are a host of over-the-top (OTT) services, such as Netflix, available.   

Diversification Is Not Digital Transformation 

Telecoms organisations began diversifying their product and service offerings. But, in doing so, some businesses moved too soon and unintentionally diluted their customer experience (CX). Without a single, 360° view of each customer, products or services were being mis-sold or offered repeatedly. In 2017, as part of its annual CX Index, Forrester noted that because there was so much potential within the industry for improvement that a 1-point increase in customer experience could earn the average U.S. telecoms organisation $3.39 in per-customer incremental revenue

However, telecoms organisations didn’t have the bandwidth required to undertake a digital business transformation that could bring robust, sustainable improvements to customer experience. Although this could have increased both loyalty and customer lifetime value, traditional sources of income started to dry up while the need for investment in technology and in infrastructure increased.  

Over the last decade, 3G has given way to the 4G/LTE network and now 5G is rolling out. Meanwhile, consumer demand for high-speed fibre optic at home internet connection has never been greater.  

The events of 2020 highlighted the fact that telecoms organisations, their products and their services are now equally fundamental to the modern way of life as access to banking and financial services and to utilities. Without their infrastructure and the levels of customer support the telecoms industry managed to deliver during the pandemic, it would have been impossible to transition to remote working, to maintain contact with friends and families, for children to continue their education or to simply access the information needed to stay safe.   

And yet, worldwide telecommunications and pay TV services revenues remained flat in 2020 and are predicted to grow by just 0.7% over the course of 2021.  

All of which is why the industry is now embracing transformation.  

What is Digital Transformation in Telecoms?

Digital transformation in telecoms will look different from digital transformation in retail or in tourism. However, the definition of a digital business transformation and the benefits it can deliver to an organisation remain the same regardless of industry or sector.  

A digital business transformation is about adopting digital technologies that enable an organisation to optimise the way it operates. It frees up and unifies data sources to enable analytics that deliver business intelligence and genuine customer insights. However, a digital transformation, in telecoms or in any other industry, is also about culture. To succeed, a business transformation requires a change of mindset, the development of new or complementary skills and a willingness to embrace new systems, processes and ways of working.  

When both the technological and cultural aspect of a business transformation come together, the result is an organisation built around the customer and guided by actionable data insights.  

The Benefits of Digital Transformation for the Telecoms Industry  

The biggest single benefit of undergoing a digital business transformation is creating a closer relationship with customers. With the right combination of technologies, tools and working practices it becomes easier to meet customer needs and flex in line with changing expectations. A closer relationship provides greater insights that can be operationalised for creating new products and services, for building greater levels of customer loyalty and for minimising churn.  

Successfully adopting a digital business model elevates customer experience, creates greater efficiencies and gives organisations the agility they need to keep innovating and responding in line with changing market forces.  

The Biggest Barriers to Digital Transformation in Telecoms 

While the benefits of a digital transformation in telecoms are clear, many businesses will have barriers to break down. 

Legacy Systems

Across the industry, the consensus is that the burden of legacy IT systems is the biggest obstacle to overcome when aiming to transform. Technology ages faster than budgets for new tools and processes can grow. Added to this is the fear that while attempting to replace existing systems, day-to-day operations and levels of customer service can be negatively impacted.  

However, as more and more proven solutions with cloud capability become available, some of these problems, such as maintaining business-as-usual operations during migration, can be elegantly solved. Likewise, because technology no longer needs to be on-premise to perform, with the right help and guidance from experts with experience specific to the telecoms sector, it’s simple to conduct a digital triage. This will help you to understand what systems are still crucial and what are the best digital solutions based on existing technology stacks and supporting systems.  

Capabilities and Culture  

As previously mentioned, a digital transformation in telecoms is as much about cultural change as it is about adopting new technology. Employees at all levels of an organisation will require some type of up-skilling or cross skilling in order to drive the greatest benefits and achieve the biggest efficiencies new digital processes can deliver. However, these skills need to be supported by an overarching business culture, one that runs top down from the C-Suite that emphasises collaboration and innovation. New processes and operations can present new opportunities or possibilities to gain insights that were previously unavailable. People need to be empowered to be able to identify and seize these opportunities – or to feel they have the agency to act based on insights or new levels of understanding.  

Data Silos 

One of the ultimate goals of a digital business transformation in telecoms is the harnessing of data. However, across the industry, enterprises of all sizes are struggling with fragmented or siloed data or with trying to combine and analyse different types of data in different structured and unstructured formats. Pre-pandemic, 30% of telecoms organisations cited fragmented and siloed data as the biggest barrier to a successful business transformation. But again, thanks to tools such as Robotic Process Automation (RPA) it is much easier to pull data from different sources together for better business insights, while new systems are developed and brought online that are focused on enterprise-wide data capture.  

  1. Artificial Intelligence 

Unless an organisation is on its journey towards a digital business transformation, it will not have the systems or tools necessary to take full advantage of artificial intelligence (AI). From an operational perspective, AI can help to automate processes and manage workflows; however, the greatest benefits are around customer experience. AI is what makes it possible to leverage customer engagement tools such as chatbots and virtual assistants that can offer the round-the-clock access consumers now expect. Our own data tells us that 52% of U.S. consumers equate good service with access to 24/7 support and one-in-three consumers now prioritize self-service channels when they have an issue to resolve.  

It is also key to providing support for customer-facing employees, helping them to find the right information during a live interaction or solve a problem when a customer has a serious issue with a product or service – 68% of U.S. consumers say access to knowledgeable staff is the most important aspect of good customer service. 

  1. Robotic Process Automation (RPA) 

RPA can automate and standardise back-office operations, create bridges for connecting systems and data sources and, when correctly applied, eliminate the mundane elements and repetitive tasks many employees would otherwise have to undertake. As well as making it easier to manage resources, RPA also enables employees to focus their attention on the aspects of their jobs that really matter for the business and for the customer base.  

  1. Data  

Data is already a valuable commodity for any business, but its volumes are set to increase exponentially as the 5G network continues to roll out and as the Internet of Things (IoT) becomes a reality. With all the elements in place as part of a digital transformation, telecoms organisations will have the necessary capabilities to capture and operationalise more of this increased data flow. They can use the insights to feed back into product and services roadmaps and into targeted customer loyalty and retention programs.  

  1. Speech and Text Analytics  

With speech and text analytics, an organisation can capture and analyse 100% of customer contacts – whether through a contact centre or via virtual assistants, an IVR or a chatbot – as well as website and digital asset clickstream analytics. This gives businesses the power to understand and decode customer sentiment and expectation in real time. Customer journeys can be constantly refined, potential problems with products or services can be identified and dealt with upstream and certain types of contact can be eliminated altogether.  

The insights that speech and text analytics can deliver will also improve staff training and coaching. They will ensure consistency of service across touchpoints and channels and boost customer satisfaction while simultaneously lowering the cost to serve.  

  1. Omnichannel Customer Experience  

A digital business transformation brings an organisation closer to its customers. Telecoms organisations are embracing digitalisation because they need to augment their channel strategy and find better and more effective ways of engaging with their customers. This demands an omnichannel approach to customer experience. A digital business transformation in telecoms can improve any aspect of customer experience delivery. However, unless all elements of customer experience operate in unison, it is impossible to deliver a consistent level of service or, to capture and preserve information relating to each customer’s history or preferences.  

For consumers, channel preference is fluid and influenced as much by context as cohort; yet, expectations are set. Whether trying to self-serve, conversing with a chatbot, using a connected kiosk at a physical store or interacting via online chat, social messaging or through a traditional voice channel, consumers want the same thing: swift issue resolution. This is true whether it’s a frequently asked question or a moment of truth.  

This is why a robust omnichannel approach to CX is set to be a defining trend for business transformation in the telecoms industry. It provides organisations with the overview and insights needed to meet customer needs and a foundation on which to build out the customer experience of tomorrow.  

Successfully undertaking a digital business transformation will bring telecoms organisations closer to their customers. The ability to leverage and optimise the use of tools, technologies and processes, from AI and speech analytics to RPA and big data, provides insights and advantage in equal measure. However, it’s crucial to remember, that as digitalisation progresses, the value of a human-to-human interaction actually increases, rather than diminishes. Consumers across the world and across generations still prioritise live channels and making a real emotional connection with a real person in those moments that matter.  

Regardless of the channel, friendly and knowledgeable staff versed in efficient service has the greatest positive impact on customer satisfaction. Telecoms providers must ensure every person on their CX frontline has everything he or she needs to deliver the first time, every time. Regular staff training is a good place to start, but live interactions should not be left to chance.