The telecommunications industry is undergoing a major transformation, with traditional revenue streams like voice services declining due to commoditization, rising competition, regulatory pressures, and a shift toward data services. This blog explores how technology-driven strategies can unlock new revenue streams and enhance customer experiences for telcos. We also highlight how innovation-driven digital transformation can optimize operational costs and how empowering digital innovation through data monetization can open new growth opportunities.

Unlocking new revenue streams leveraging technology and data

As traditional revenue streams dry up, advanced technologies like 5G, IoT, and edge computing are emerging as the pillars of future growth for telcos. Here are some key examples of how technology can play a crucial role:

5G technology: 5G offers faster speeds, lower latency, and higher capacity, enabling smart cities, connected vehicles, and industrial automation. It also supports enhanced mobile broadband for seamless streaming of HD video, VR, and AR applications, improving user experience and creating new revenue streams through premium content services.
IoT solutions: The proliferation of smart devices in homes and industries presents a massive opportunity for telecom providers to offer seamless management solutions. Telcos can partner with healthcare institutions to secure the connectivity of personal healthcare devices and networks, improving patient management. Additionally, telecom providers can offer IoT-based energy management solutions to optimize energy usage in buildings, reducing costs and enhancing sustainability.
Edge computing: Processing data closer to its source reduces latency and enhances performance, making it ideal for applications that require real-time analytics, such as autonomous vehicles, smart manufacturing, and remote monitoring. By offering cloud services combined with edge computing, telcos can tap into lucrative enterprise markets, providing businesses with faster and more efficient data processing solutions.
Data monetization: Turning insights into revenue
Data monetization strategies for telcos can be categorized into internal and external monetization. Internally, telcos can leverage business and operational data to improve processes, enhance customer experiences, and optimize operational efficiency. This includes reducing churn, enabling targeted marketing, and supporting location-based promotions. Externally, telcos can monetize data by offering raw data, insights, or bundled products to third parties, creating new revenue streams and business models. The key to successful monetization is selecting and managing use cases effectively through data discovery, integration, and visualization. This ensures that the use cases deliver value and contribute to the business model.

Examples of data monetization use cases cut across industries, like analyzing buying habits and customer profiles in the retail sector and credit scoring and usage-based insurance in the financial services industry to optimize transport flows and detect fraud in the transportation industry. As data becomes a dynamic asset, telcos must foster a data-driven culture and partner with proficient data providers to unlock its full potential and drive innovation.

Enhancing customer experiences leveraging technology

Leveraging AI and data analytics enables telcos to deliver personalized services and recommendations, enhancing customer satisfaction and loyalty. AI-driven customer profiling facilitates hyper-personalization, improving engagement and retention. Implementing omnichannel support ensures seamless service across all touchpoints, elevating the customer journey. Additionally, real-time AI monitoring systems can swiftly detect and resolve issues, while intelligent assurance systems analyze vast network data to maintain high service quality. This proactive approach streamlines network management, minimizes disruptions, and enhances overall customer experience.

Strategic technology partnerships and ecosystems

Telcos must partner with specialized tech companies, cloud providers, and industry specialists to bridge the technology gap and unlock new business models. These partnerships will drive service expansion through cloud-based solutions, AI-driven automation, and industry-specific offerings beyond traditional connectivity. Additionally, they will enable telcos to prioritize sustainability by investing in green solutions that reduce environmental impact and ensure regulatory compliance. By leveraging AI and automation, telcos can enhance operational efficiency, lower costs, and improve service delivery.

These collaborations drive innovation, create growth opportunities, and enhance the telco's value proposition through joint POCs tailored to customer needs. By adopting these strategies, telcos can mitigate the decline of legacy revenues and position themselves for long-term success in the digital age.

However, adopting technology to the current ways of working is easier said than done. It involves careful planning and a 360-degree approach to transition to a Tech-co business model.

Adopting the tech-co model

Since 2020, as digital platforms and ecosystems evolved to deliver enhanced capabilities with new working methods, telcos have adapted and reduced their dependencies on external support environments.

Omnichannel is now a buzzword, with AI/genAI revolutionizing customer experiences. Telcos are leveraging this opportunity to adopt the tech-co model by participating in innovation experiments and building in-house tech teams. This shift has created a hybrid delivery model, where telcos and vendor partners collaborate equally to develop and implement multiple use cases, ensuring optimal ROI and effective solutions.

For example, AI/genAI has proven most impactful in contact center technology, particularly with IVR systems, where customer experience remains a top priority for telcos. Many leverage COTS (Commercial-off-the-shelf) Low-Code/No-Code (LCNC) platforms, which often require extensive customization and have high usage and maintenance costs, resulting in expensive, sub-optimal solutions. Telcos can develop these capabilities in-house with their IT teams to address this issue. This approach enables tailored solutions aligned with organizational needs, existing processes, and guidelines, optimizing costs and customer experience.

As the success rate for a telco to tech-co transformation is low, it is crucial to address the industry's current state and ensure telcos embark on the right roadmap for their tech-co transformation. Telcos must first understand and adopt the core characteristics of a tech-co encapsulated in the ABCD model to bridge this gap:

Automation: Achieving digitization at scale while delivering a seamless, uniform experience.
Business centricity: Prioritizing initiatives that directly benefit clients and end users, driving value across the ecosystem.
Connected experience: Transforming applications and infrastructure through advanced technologies like LCNC (Low-Code/No-Code) platforms and AI/ML, fostering seamless interactions.
Data utilization: Harnessing the power of data to drive insights, innovation, and decision-making—cementing its role as a critical enabler of transformation.

This approach aligns fundamentally with the TM Forum digital maturity model, which provides a practical framework for guiding telco transformations.

Future-proofing the Telecom industry

Beyond business models, organizational change, and new-age products, telcos must prioritize a robust operational blueprint to support digital transformation. Whether cloud-native or on-premises, application development, support, and maintenance remain critical.

Telcos should adopt a B2B2X approach, extending capabilities beyond connectivity through SaaS, PaaS, and cloud-ready solutions infused with digital innovation to thrive. This strategy enables telcos to reduce costs, enhance efficiency, and minimize dependencies, aligning with their key objectives for sustainable growth.

Looking ahead: A blueprint for success

In conclusion, the telecommunications industry is undergoing a profound transformation driven by advanced technologies such as 5G, IoT, edge computing, and AI. By embracing these technology-driven strategies, telcos can unlock new revenue streams, enhance customer experiences, and optimize operational costs. The shift towards data monetization, strategic partnerships, and digital innovation offers a path for long-term growth and success. To fully capitalize on these opportunities, telcos must foster a data-centric culture, adopt the tech-co model, and leverage the power of automation, business-centricity, and connected experiences. This approach will address current challenges and position telecom companies at the forefront of digital innovation, ensuring they remain competitive in a rapidly growing digital world.

Services

Industries

Insights

Careers

About