The Impact of Digital Transformation on the Telecom Industry

The telecom industry is undergoing a rapid digital transformation, revolutionizing customer-facing experiences. With the advent of 5G, IoT, and AI-powered analytics, telecom companies are investing in advanced networks and digital platforms to enhance connectivity, improve customer experience, optimize operational efficiency, and increase productivity.

As the industry continues to evolve, telecom companies are leveraging digital transformation to meet the increasing demands for high-speed connectivity, personalized services, and seamless digital experiences. Moreover, evolving customer expectations have compelled telcos to explore new technology operating models prioritizing speed and responsiveness. Though customer-centricity digitization and building an insight-driven organization are the top priorities for telcos, fostering connectivity remains the focus area in their transformation agenda.

Challenges of digital transformation in telecom

EdgeVerve commissioned Forrester Consulting to conduct a custom study with 105 business and IT decision-makers from the telecommunications services industry to understand the effectiveness of digital transformation initiatives and the adoption of platform-based strategies.

Despite significant investments — most telco firms invest over US$100 million annually — many of their digital transformation efforts have not achieved the desired business impact and outcomes. Only 14% believe they have achieved success, whereas 65% of firms state that their transformation journey is still underway, and they are yet to measure their results.

The reasons? Internal challenges, such as resistance to digitalization, conflicting management priorities, and a lack of skilled talent, contribute to the difficulty of achieving success.

Obstacles to digital transformation efforts:

How can telco firms reduce customer wait times, offer customer support, and enhance customer satisfaction in today’s volatile market conditions and flickering customer behaviors? This is where harnessing emerging technologies such as AI comes into the picture.

AI-powered solutions to drive digital transformation to the next level

Telco firms are increasingly prioritizing AI-driven digital transformation to connect human and AI capabilities.

As per the custom study, more than two-thirds of the telco firms will increase their investment in technologies such as digital platforms, generative AI (genAI), and process mining in the future. Digital process automation (DPA), digital decisioning platforms, and industry-focused process automation solutions are the top areas that firms have plans to implement or expand in the next 12 to 24 months.

While telco firms want to utilize AI to its full potential, they face challenges in scaling AI, such as security and a lack of trust in AI-based systems among employees. This requires a change in mindset, awareness of AI usage, and replacement of legacy systems with cloud-native platforms.

Benefits of digital transformation in telecom

Enhanced CX and new growth opportunities: Customer service plays a fundamental role in the telecom industry, with customer demands for efficient, high-quality service compelling the telecom industry to digitize and automate quickly, thereby reducing wait times and improving customer satisfaction. Moreover, harnessing new digital approaches helps telcos improve resilience, customer experience, and competitiveness.

According to the custom study, driving transformation that improves CX is a key motivation for 90% of decision-makers in the telco industry. They believe AI can help improve CX, increase automation of customer-facing services, and internal processes. They also want to drive straight-through processing to enhance CX, operational efficiency, cost reduction, and risk mitigation.

Insights-driven decision-making: 89% of respondents highlighted that it was a priority for their organization to embrace data-driven decision-making across IT and business verticals to become an insights-driven business.5 Achieving better data integration is then essential, from unlocking the value of data to extract insights to improving overall intelligence and automation in IT and business processes.

Future outlook: Adopting a platform-based strategy to drive change

How can telco firms unlock the full potential of their digital transformation efforts?

Adopting a platform-based strategy that efficiently unifies and orchestrates business and tech will help drive digital initiatives effectively. Moreover, the gaps in digital transformation effectiveness have emphasized the need to strategically connect business, IT, and partner ecosystem priorities while enabling technical connectivity across systems, data flows, and operational processes to drive change.

Harnessing the power of a connected ecosystem helps: