Industry Thought Leadership

The Emerging Role of Telcos in an Increasingly Digitalised World

July, 2017
Farid Faraidooni
Chief Operations Officer

du

The ever increasing world of digitisation is providing telecom companies the opportunity to rebuild their market positions, reimagine their business systems, and create innovative offerings for customers. In fact, digitisation can actually enable telcos to improve their profits by as much as 35 percent, yet the average improvement achieved is just 9 percent. Investment in the telecommunications industry as far as technology goes has rapidly increased and as a result, the total mobile data traffic has grown 4,000 times over the past 10 years, and 400 million times over the past 15 years . As the impact of the Fourth Industrial Revolution is felt more widely, digitisation is only going to increase further. As such, the requirement of cloud and mobile services is also going to increase. Reliable and secure connectivity will be critical for the operation of new technologies.

The increase in mobile data traffic has contributed to an unprecedented level of economic activity, including the global flow of goods, services, and finances, which has grown by 1.5 times to $26 trillion in the space of two decades – 1990 and 2012. This figure could triple to more than $80 trillion by 2025 . Telcos of today are evolving to become ICT partners to their clients. Gone are the days where the prime focus was purely telephony. There are new players in the game, which have emerged as Internet of Things (IoT), the Cloud, and Smart Cities. Telcos are fast becoming the solid pipeline for companies and governments to undergo their own digital revolution. Studies have shown a strong correlation between profit margins and five select areas of IT, including robust customer analytics, digitisation of order management, self-service customer relationship management, a simplified IT-application landscape, and automation of IT-infrastructure management. Organisations with digital capabilities, in fact, boast a profit margin of 43 percent , compared to those with less digitisation.

With a rise in Smart Cities, telcos are creating and providing services to cater to the new digital world. Smart cities are not just built through isolated projects or Governments taking the burden alone, it takes a community to make a Smart City dream a reality. The Smart City Project of the Dubai government builds on the considerable digitisation of the government services by integrating them with the IoT. The project will see the opportunity to marry live data from IoT with repositories of archival data of the city, to generate a whole new category of services and will go live in 2017. To increase the advancement of the state-of-the-art existing digital platforms, Dubai’s government decided to change course and build applications on top of a platform that would be able to aggregate inter-related data, such as traffic volumes and corresponding accident rates. These will help to draw insights into ways to improve the quality of governance besides providing another crop or services to citizens.

du was chosen as the strategic partner to the Government’s Smart Dubai Office as a telecom company, it is now becoming a leading Smart City enabler and supporter, providing connectivity experts from its Smart City portfolio, which is the most advanced in the Middle East. This partnership with the Smart Dubai Office will fast-track the Smart City development in a more efficient and sustainable way. The platform will provide applications developed with the infrastructure and an environment for generating end-to-end services, rather than them being fragmented by several different operating systems. In addition to this, the platform will take advantage of the vast volumes of data generated by the Internet of Things and a host of other smart devices. A data log will come along with the platform and will catalogue each series of data to define the rights to access it by third parties. du will provide a system integrator that will conduct end-to-end execution capabilities for the Smart City. The Smart City platform will be placed throughout Dubai as part of the government’s plan to improve the city resources, for businesses to flourish and for a happier stress-free life for everyone in the UAE.

Telcos are part of the race towards 5G, where the target launch in the Gulf region is 2020. du is planning to revolutionise the way people live their lives through the launch of its U5GIG practical and innovative Initiative. du is taking the lead to build a UAE 5G Innovation Lab to prototype, test and validate early 5G and IoT, equipment and services. U5GIG will also allow universities and technical organisations across the UAE to work together and participate in the development of the 5G ecosystem, and for academia and industry to test applications and technologies in a real-world setting. U5GIG has been envisioned to be a consortium of technical and academic organisations in the UAE as well as, global telecom vendors to plan and use their expertise to define and develop a global 5G network. du was early to deploy LTE and they are eager to maintain their leadership with 5G technologies. Operators must be involved in the standardisation debate and plan a multi-phased approach to deploying 5G in order to maximise the opportunity and minimise the risks and costs associated with this migration. They can start by investing in key enablers of 5G such as virtualisation and site density.

The telecom industry has been critical in the current process towards digitalisation across a range of sectors. From retailers to financial services, firms depend on telcos to provide customers with compelling online and mobile experience designed to capture their interests. The time for telcos is now, and making sure that they have the steps to creating reliable and secure connectivity technologies in the evolving digital world is critical. Making smart use of digital technologies across the whole business is an imperative for telecom operators in order to seize opportunities that can make them stronger and more profitable than before. Getting it right will involve a digital transformation that starts with full commitment and great leadership from the top.

1 http://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/how-telecom-companies-can-win-in-the-digital-revolution
2 http://www.cisco.com/c/en/us/solutions/collateral/service-provider/visual-networking-index-vni/mobile-white-paper-c11-520862.html
3 http://reports.weforum.org/digital-transformation/wp-content/blogs.dir/94/mp/files/pages/files/dti-telecommunications-industry-white-paper.pdf
4 http://www.mckinsey.com/industries/telecommunications/our-insights/lessons-from-digital-telcos-five-initiatives-to-improve-business-performance

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