The Original Technology Innovators
Simple fact: Without technology, there would be no telecommunications industry.
While smoke signals and drums may have been the first form of telecommunications, the industry wasn’t born until the telegraph was invented in the 1830s. By using wires and cable to enable the exchange of information over long-distance in real-time, the telegraph was the first true technology to revolutionize communications. Initially used by the government and railroad industry, Western Union became one of the first telecom companies to offer telegraph service to consumers. By the 1850s, multiple Telcos were providing services enabling connectivity, making life easier for businesses and consumers alike. 

Since their inception, Telcos have focused on building and maintaining the connectivity infrastructure and networks necessary to continually allow people to share information quickly. The invention of telephones, fax machines and the internet only increased the importance of the industry to our economy and society. 

Today, a combination of factors, ranging from multiple rapid technology advances and increased competition to changes in consumer behavior and customer expectation have caused disruption in the telecom industry. Despite the fact that the core capabilities Telcos offer – networking and connectivity, remain relevant to the digital economy, Telcos are losing customers to emerging cloud-native communications service providers whose platforms and business models were built to support 5G mobile networks, live streaming, virtual assistants, autonomous cars and the IoT. 

“Every business in every sector faces the challenge to cater to these constantly changing and growing customer expectations. Many expectations for digital services depend on some form of connectivity of devices, assets, cloud-based applications, and services. It is in this context that Telcos can help businesses to deliver better “connected experiences.” 

The Future of Telecoms: From Endangered Species to Digital Service Providers, Forrester Report, 2018

The Challenge: Choosing Transformation over Tactics

The New Truth: To compete in today’s “connected” world, Telcos need a technology foundation that enables them to offer new services that can capitalize on their data, drive revenue and create value.

The technology platforms most Telcos rely on today are antiquated yet over and over IT teams and outside consultants convince them that new tools can be integrated, and new software adapted, to handle the new expectations of both consumer and business customers. According to Matt Alberts, Vice President of Professional Services for commercetools, it’s simply an impossible feat. He points out that retailers have already tried that route and failed – and Telcos have more complicated systems and are more siloed. “In order to successfully deliver what customers are demanding requires Telcos embrace true digital transformation.” 

In a recent commercetools white paper, How Modern Commerce Technology is Transforming the Telecommunications Industry, Alberts identifies 5 main challenges Telcos face in today’s digital economy:

  • Siloed Information
  • Deregulation
  • Sub-par Digital Customer Experience
  • Need for Horizontal Diversification
  • Legacy solution

The only way to overcome the first four challenges, according to Alberts, is by first tackling the legacy technology issue. He points out that multiple reports from Forrester reinforce his thoughts. “One of the main takeaways from The Forrester Report was that only a few Telcos will survive unless they transform sufficiently to become digital service providers.”

The consensus across the board for Telcos to compete in today’s digital economy, is that they have to step out of their comfort zones, and make decisive, bold, sweeping organizational changes starting with building a microservices-based, API-first, cloud-native headless platform. “Nothing else is going to deliver the functionality and flexibility they need for future growth.”

If you’d like to learn more about the new commerce technology used by today’s biggest Telco organizations, we’re releasing an exclusive virtual panel discussion in July, featuring headless experts from EPAM Systems and commercetools. Send us an email at marketing@commercetools.com with the subject line, “Interested in Telco Panel” and we will send you the recording as soon as it goes live.

“Legacy solutions…are posing considerable problems to the organizations. They are usually on-premise solutions…a lot of resources are used to keep the server structure up and running. Secondly, the solutions themselves need to be kept updated…an expensive and time-consuming task….[By] Adding more and more features while trying to support new business requirements, this  IT ecosystem becomes unstable over time. At the same time, this unstable menagerie of software applications is constantly stress-tested by more and more traffic. In other words, if a 20+ year old IT infrastructure is barely surviving business during the year, the organization is headed for disaster during BFCM or the holiday season.”

How Modern Commerce Technology is Transforming the Telecommunications Industry commercetools White Paper, 2020

The Headless Transformation Solution

It’s common knowledge that what consumers and businesses want from their communications providers today is faster, more reliable data and voice connections, more applications and a better customer experience. While most Telcos are diligently working to adapt their technology to meet those expectations, the majority are having difficulties implementing, and achieving, the significant transformation necessary to meet customer expectations.

Alberts says many Telcos are used to doing everything in-house, and even if they outsource, they are resistant to change for multiple reasons. He says it’s key to show them how partnering with commercetools enables them to go live more quickly and with less risk, without overtaxing their internal resources. He focuses on reinforcing that his team understands the specific needs and issues of the Telecom industry. “And, providing them with proof that the implementation plan we offer truly can deliver a seamless transition over to a headless, cloud-native platform while protecting the one they have in place.” 

Once the transformation process is in motion, commercetools provides ongoing support to ensure it is successful across the board. “We work with them to launch initiatives to gain buy-in from stakeholders, explore different business concepts/service offers, revise their operating models, and perhaps most importantly – recommend strategies that allow them to capitalize on their newfound ability to deliver omni-channel experiences.”

At this point, transformation is no longer an option, says Alberts. ‘The rewards headless platforms offer far outweigh any risk – the value transformation delivers across the board is immediately recognizable.” he says. “No longer do they have to deal with exceptions, glitches or downtime. No longer do they have to hear, “No, you can’t do that.” With headless, they get to hear “Yes” a lot more.”

“When Telcos adapt a modern, cloud-native infrastructure in combination with an agile team structure, they can quickly change business processes and make changes to production every few weeks. These changes enable them to cross-sell and upsell new services and devices to existing customers, as well as across business units; ultimately increasing revenue streams and market share. As far as customer acquisition businesses are concerned, having a centralized, cloud-native platform with flexible APIs in place helps minimize siloed information and maximize return by consolidating customer data.”

How Modern Commerce Technology is Transforming the Telecommunications Industry. commercetools white paper, 2020

Visit our website to learn more about the challenges in today’s telecommunications industry, and how commercetools’ modern, headless technology can help your organization be successful.