Next generation CMT operators can unlock billions of value

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The adoption of key technologies in the South African communication, media and technology (CMT) space, can unlock R182 billion in value for the industry, consumers and society at large by 2026, we found in recent study.

Our Unlocking Digital Value in South Africa’s Telecoms Sector report leverages the value-at-stake framework developed with the World Economic Forum (WEF) to measure the impact of digital technology on government, business and society, and quantifies the value these technologies can create.

One of the main digital themes that we identified as critical to compete on post-digital era, was the effective use of data, new tools and capabilities to redefine customer engagement through hyper-personalisation of service experiences along the entire value chain. It therefore comes as no surprise that one of the key emerging technology trends that was subsequently identified in Accenture’s Technology Vision 2020, is the ‘I’ in experience.

Globally there was a sudden explosion of users as many globally started working from home, and customer engagement on a variety of applications started playing out, many applications not built for such rapid scale and quickly thrown into the limelight.

This customer-centric trend is testimony to the fact that enterprises are not only looking to personalise and individualise experiences to a greater degree than ever before, but it also points out that the next generation of digital enterprises will be those who take this even further by enabling their customers to co-create the experience and provide them with the choice to tailor their own products.

Our research highlights four digital themes that CMT operators can leverage to unlock the key pockets of value that form part of this R182 billion in potential growth:

  • Redefining customer engagement – Telecoms operators who apply new digital tools and capabilities to obtain deeper insights in customer behaviour and design experiences that delight their customers across the entire value chain, stand to benefit from greater customer lifetime value, reduced churn and lower acquisition and service costs, with the value at stake potentially as great as R13.8 billion.
  • Beyond the pipe – The way in which people communicate, collaborate, shop, travel, learn, work and are entertained continues to evolve.

This transformation presents the telecoms industry with opportunities to extend revenue streams beyond their current connectivity infrastructure, through three key initiatives, namely digital services, the Internet of Things (IoT) and re-imagining communications through virtual and extended reality which could unlock a total R76 billion in value by 2026.

  • Networks of the future – Internet accessibility should be a basic commodity as most people in SA use mobile devices, yet Internet penetration is currently only at ±54%. The research shows that improving Internet access could result in an additional 4.3 million jobs, plus a cumulative increase in productivity and earnings to the value of R26.7 billion.

Four key initiatives were also identified that will shape the networks of the future, namely: alternate connectivity, software-defined networks, zero touch networks, and cyber resilience, which could collectively unlock a total of R91.9 billion by 2026.

Perhaps this serves as a reminder and a call to action for the industry but NFV (Network Function Virtualisation) will need to be fast tracked to curtail capex requests, it is so fundamental as this will be a key component of the battle for network quality and in this Industry time and time again network quality is still king in the eye of the customer thus the virtual network will pave the way for the future network and myriad of services that this will provide.

The reality of a post COVID world is that there is no doubt that the cloud will start to play an even greater role and cost take out by a future network is paramount for the industry.

  • Bridging the gap on innovation – The ability for traditional telecoms operators to continue to invest substantial sums in new IT and network infrastructure is becoming prohibitively expensive given the constraints in monetising those investments.

While 5G promises to change the speed and connectivity landscape, it also requires investment in new infrastructure. This could further widen the gap between incumbent operators that could monetise the investment given the size of their footprint, versus those who do not.

Being a 5G disruptor versus 5G disrupted

Hyper-personalisation will require near real-time processing. This brings with it the need for better connectivity across mobile and broadband platforms. At Accenture, we agree that 5G holds massive potential and will transform the digital experience and allow hyper-personalisation.

The hot topic in the African CMT space right now is whether to go 5G or not, which, simply put, is the fifth generation of wireless technology for digital cellular networks, which enables substantially greater speed in transmissions than 4G. Like in many parts of the world, African CMT operators who wish to future-proof their businesses should strategically consider adopting 5G as soon as possible.

Some of the advantages of 5G are:

  • Increased transmission speed – 5G transmission has been proven to approach up to 100 gigabits per second (Gbps), which basically makes it 100 times faster than 4G.

In practise, this promises mobile data speed that for example outperforms even the fastest home broadband network that is currently available to consumers. As a result, users will be able to quickly and seamlessly download content and access files, programmes and remote applications via the cloud from all mobile devices. This will also reduce or eliminate businesses’ dependency on physical servers or internal memory to run software applications.

  • Decreased latency – Latency speaks to the time it takes for a message to traverse a system, or the time that elapses from the moment we give an order on a device, until the action actually occurs.

The latency of 5G is proven to on average be ten times less than 4G, which will substantially decrease the delay or lag experienced when requesting data from the network and make it possible to perform remote actions in true real time.

This can for example significantly improve remote control and monitoring of complex business operations, such as power plants and factories, enabling them to instantly detect operational defects and reducing downtime.

  • More connected devices – The increased speed of 5G makes it possible to connect substantially more devices to the network, per square kilometre than with 4G, which is a critical enabler of the Internet of Things (IoT).

Domestic users can for example benefit from this by creating what is referred to as ‘smart houses’, which is basically a home automation system that connects all the appliances and systems in the home with IoT sensors to i.e. control lighting, climate, energy consumption and alarm systems.

In industry, a manufacturing plant will for example be able to connect hundreds more devices with IoT sensors to enable instant alerts when critical machinery deviates from its prescribed operating parameters, which will in turn increase operational efficiency and eliminate machine downtime.

  • Network slicing – 5G network slicing is a form of virtual network architecture that creates an end-to-end network across the mobile network domains that can be sliced in multiple isolated virtual networks that can be accessed to fulfil a diverse range of requirements, on demand.

Some of the business benefits of network slicing is that it provides configurable services for specific customers and uses, that it adds efficiency and agility to address specific customer needs and that it increases time-to-market and time-to-customer for network services, not to mention that it substantially simplifies network automation as a whole.

Detachment: A critical aspect to pave the way for 5G

The CMT space is marked by high Capex legacy networks and IT and asset-heavy operations that may prohibit operators to remain relevant and take full advantage of the competitive edge that 5G will bring to the market.

Detachment, or decoupling will not only counteract this issue, but also help operators to establish the necessary agility for innovation and differentiation.

Detachment can be achieved through the following four key steps:

  • Ensure efficient interaction between systems, decouple optimisation of the network layer and partner intelligently or establish symbiotic ecosystems to collaborate and accelerate agile approaches
  • Optimise the network to create efficiency and cost-savings that can be reinvested in transformation, innovation and ideation of services
  • Optimise workforces through intelligent platforms, improve operating models and streamline processes to transgress functional silos
  • Create a culture of innovation and co-creation

Driving omnichannel transformation to delight the ‘I’ in experience

Following 5G adoption, CMT will have to rapidly embrace omnichannel transformation across the entire value chain, to win their customers’ loyalty and advocacy. Omnichannel is an approach that brings the ‘I’ in experience to life by maximising the value of the customer across the lifecycle, right through from acquisition to retention.

To derive the full value from such a customer experience strategy, CMT operators will have to re-think their channel strategy and deflect interactions towards less expensive channels (placing digital first).

Operators will have to correlate customer context across all channels to provide a personalised experience, proactive care and relevant products and services.

We are also of the view that by improving the time-to-market of products and services telco businesses will enable rapid deployment of new customer journeys to provide significant value to both CMT operators and the customer.

The world has changed in the past few months, many challenges to overcome however together we will rebuild and pave the way for a prosperous planet. The CMT industry is at the heart of providing essential services and by applying some of the ideas mentioned in this article will assist in getting our recovery started much faster and play a vital role in kick starting the economy, applying stoic thinking is key at present and through every problem there is an opportunity, the industries cross road has arrived much sooner than expected.

As a last point relaxing of spectrum is critical and hopefully policy makers can resolve this right now as this will allot the industry to build the road ahead.


Nitesh Singh | Managing Director | Communications, Media and Technology | Accenture Africa | mail me |


 



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