Telcos: evolving into ‘problem solvers’ in order to survive


Abhishek Kapur | Telecommunications, Media and Technology (TMT) Leader | EY Africa | mail me |  

South Africa’s telecommunications (telcos) companies need to rapidly evolve by adding additional services for a new mobile working and learning world in order to stay relevant and profitable. 

Their legacy business model of telcos which has long sold data and SMS packages to consumers, is no longer enough on its own – a fact that has been brought into stark relief throughout the lockdown period.

In South Africa, the telecommunications industry is mostly a business-to-consumer (B2C) service. During the lockdown, most telco stores were forced to close. As people were unable to do the normal interactions with their providers such as SIM activations, SIM swaps, call centres were under pressure.

Collaborative online work services

There was likely also less demand for general telco offerings as people switched to using collaborative online work services like Microsoft Teams and Google’s G-suite for messaging, video conferencing and voice calls.

Telcos, like many other businesses impacted but the coronavirus pandemic, are likely to face cash flow and cost management pressures if they remain as just a ‘pipe’ for calls, messages and data.

As the working world has now changed for good, telcos must become much smarter and see themselves as problem solvers for remote workers and businesses that are struggling to adapt to this new world.

The world has changed, so they too need to change, or risk being left behind.But they now have an opportunity for a new growth story as a much wider digital services provider.

Lockdowns the world over amounted in effect to a global social experiment and that the outcomes were revealing. Many companies have told workers they should become permanent remote workers.

There is therefore an unprecedented opportunity to service the remote work force as the business enterprise changes to offer business to business (B2B) services on a large scale.

Going digital

Globally, we forecast a significant widening of traditional telecom basket of services to a deeper Information Communications Technology (ICT) portfolio, and greater adoption of these solutions as businesses go digital.

For instance, telcos could provide services different from but adjacent to their core offering such enterprise data analytics, cybersecurity, cloud services, payments services enabled by blockchain. They can also help companies manage cash-flow better and bring costs down which will be a widespread challenge the global economy struggles to recover.

As these services mature and become more common in the future, South African operators are likely to need greater numbers of people and expertise to support the demand at scale.

Education and healthcare offer further opportunities for telcos too. We’ve seen children the world over adapt well to online classes and remote schooling.

It has been exciting to see how the sector has positively contributed to the education crisis caused by COVID-19 by ensuring that learners across the country, especially the matric pupils in public schools, aren’t negatively impacted by the social distancing regulations currently in place.

It begs the question whether bricks and mortar schools are really necessary when learners could simply go online for their lessons. This way, time and costs could be saved. It is a massive opportunity worth exploring and could pave the way for a fundamental advance in the way learners are taught.

Public health services

Telcos are also proving useful in rapidly broadcasting SMS health information to the general public during the lockdown.

This kind of public health services could also be further expanded and used not just for emergencies but rather for ongoing communications between people and healthcare providers.

In other emerging economies such as India, apps on cellphones are used for two way health communications with health authorities by receiving medical advice and health reporting.

They have gone way beyond just receiving SMS messages and are dynamic tools to combat and manage a nation’s health. South Africa has a similar opportunity.

In conclusion

Since the lockdown was announced, the SA government has implemented many encouraging changes and reforms in telecommunications to address our economic and infrastructure challenges.

The Department of Communications has been successful in bringing the industry together to help resolve infrastructure problems much quicker, and to provide telecommunications infrastructure support where needed.

The sector has and will continue to play a crucial role in supporting the government and the various communities in SA during the lockdown and beyond at its potential is further developed.



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