The telecommunications industry is no stranger to fast-paced change and innovation, but nothing could have prepared it for the events of the past 18 months. Within a matter of days, schools and households around the world transitioned to remote working, becoming more dependent on their connected devices than ever before. Governments, retailers and other service providers had to shift their services online, cramming years worth of digital transformation into a few short weeks. The result was an unprecedented spike in mobile data traffic worldwide. In 2020, smartphone usage skyrocketed by almost 50%[1] across all age groups, becoming the number one way for users to interact with the online world.
Telco companies around the world met this challenge head-on, doubling down on network and systems’ resilience to cope with the surge in demand. Many, such as AT&T and Verizon, prioritised connectivity for frontline healthcare responders, and the likes of Vodafone and Telefonica offered up insights on demographics and statistics to aid the response to the pandemic. However, despite operators being the connectivity heroes of the whole world and doing their part to go above and beyond for their regional communities, there’s no getting around the fact that they are still heavily dependant on traditional physical sales channels to peddle their own products and services. 70% of them rely mostly on their call centres and bricks and mortar stores, lagging behind other industries.
This dependence on physical is far more prominent in emerging markets such as Latin America (LATAM) and the Middle East and Africa (ME/A), primarily due to poor infrastructure and a general lack of digital innovation. It presents a problem for customers, particularly those adversely impacted by the pandemic who might be in desperate need of basic online services that they simply can’t access or afford. This has a knock-on effect on telcos themselves, making it more difficult for them to retain and engage their customers, and therein lies the challenge.
So how are telcos in emerging markets coping with digitalization in a post-pandemic landscape?
Planning the move toward digitalisation
A 2021 report by the Technology Innovation Council[2] (TIC) Upstream commissioned (The Road to Digital) sheds some much-needed light on this very issue, comparing telcos in emerging markets to the rest of the world. While there is a definite recognition of the benefits of digitalization among telcos in emerging markets, including cost reduction through sales automation and a general improvement in the customer experience, few operators in the region have established a viable ‘digital roadmap’ to get them there.
For instance, fewer than 30% of telco operators in ME/A have developed workable strategies or blueprints for digitalizing their sales channels. That’s compared to more than 70% of telcos in Europe and more than 80% in the Asia/Pacific (APAC) region who have development roadmaps in place.
Despite the global pandemic acting as a catalyst for digital transformation throughout the industry as a whole, only 55% of telcos in ME/A have carried out a basic technology needs assessment, and more than 70% have no data management strategy in place.
The picture, however, is slightly different in the world’s other largest emerging market, LATAM. This region matches the likes of Europe when it comes to digital planning, with more than 71% of operators having a working digitalization blueprint in place. However, despite this, six out of every 10 telcos in the region are still at least 80% dependent on traditional, physical channels as discussed earlier.
Perceived benefits and barriers to progress
Regardless of what stage operators in emerging markets are at with their digital roadmaps, the raw desirefor digital transformation cannot be questioned. In ME/A, for instance, more than 60% of telco operators plan to increase their investment in digital sales solutions by 10-20% this year. In both ME/A and LATAM, the top three perceived benefits are cost-saving through automation, and improved customer experience, and the ability to better manage business performance through data and visibility.
The desire is clearly there. However, while strategy and planning seem to be a barrier to digitalisation in ME/A – as referenced above – cost appears to be the number one barrier to digitalisation in LATAM. Both regions cited ‘integration with existing infrastructure’ as a barrier to progress, again suggesting that outdated infrastructure in these regions may be at least partly to blame for the slow uptake of digitally native sales channels.
Measuring digital success
As technology evolves and services move online, it’s becoming increasingly clear that basic internet access should be a right rather than a luxury. Telcos in emerging markets are working hard to bridge the ‘digital divide’ that makes it difficult for communities in those regions to stay connected, and their work is really only just beginning. One of the most surprising finds from the TIC report was that all telco operators worldwide, from Europe to Latin America, suffered from the same affliction – they didn’t possess the means to benchmark and measure their own success. In fact, as of 2021, only a quarter of telcos worldwide have established any meaningful KPIs (key performance indicators) when it comes to digitalization.
The digitalization of services and the diversification of revenue streams benefits communities and customers as much as the telcos themselves. For this reason alone the digital rollout will continue. However, the speed and quality of that journey will very much depend on the formation of workable strategies and roadmaps that factor in the unique challenges that emerging markets face.
