With the advent of 5G, the Internet of Things (IoT), and cloud technologies, the telco industry is rapidly evolving into service enablers in a new ecosystem of greater business complexity and increased automation.

5G’s dynamic capabilities continue to reshape the market directly and indirectly. While some of the more obvious 5G benefits include network and services modernization, this fifth-generation technology standard has also indirectly facilitated numerous telco-to-techco transformation journeys. 

Modern telcos are transitioning from traditional telco entities to agile techco through several key shifts in their business and operating models.

• Starting from their core structures, telcos should transition from end-to-end vertically integrated models to a paradigm of business orchestration. This entails fostering multi-sided consumer-producer ecosystems, extending their reach into the B2B2X segment, and embracing open architectures and API economies.
• Telcos must move from undifferentiated customer experiences to a digital-first approach, creating immersive, hyper-personalized experiences and enabling self-service and digital interactions across omni-channel journeys.
• Telcos must shift their product and service offerings from being barrier protected and connectivity-based to a data-powered structure. Furthermore, telcos should prioritize data-powered third-party products and services – utilizing software-driven and over-the-top (OTT) solutions and accelerating innovation cycles through rapid ideation, incubation, and industrialization processes.
• Regarding technology, telcos should transition from on-premises and hardware-centric architectures to cloud-native solutions. Telcos should embrace software-defined networking, adopt a componentized approach, and invest significantly in in-house modern engineering capabilities. Automation will be crucial, leveraging analytics and AI to deliver zero-touch services.
  

These telco-to-techco shifts point to a transforming market and to changing investor priorities. To keep up with digitization demands, Telcos are revising their investment in tech to transform their decision-making capabilities and operational services.