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4 min

What's Really Driving Telecom's Digital Transformation? These 3 Trends Tell the Story

Insights shared by Telstra and Telefónica experts at Telco Growth Oct'24

George Petersen

Head of Telco-enabled Projects

Ellen Snesar

Content Manager

November 8, 2024

Intro Trend #1. Transitioning from telco to techco through modular approach Trend #2. Cloud and open APIs: unlocking new service opportunities Trend #3. Optimizing team dynamics and leadership Key takeaways

The telecommunications industry is experiencing a pivotal shift as companies work to innovate and transform in response to evolving market demands. Industry experts from Telstra and Telefónica at Telco Growth Oct’24 shared insights on how telcos are leveraging industry trends to overcome traditional limitations, optimize business operations, and expand into new services.

Below, we break down these key technology trends driving this transformation and the opportunities they unlock for the telecom sector.

Trend #1. Transitioning from telco to techco through modular approach

The telecom industry’s historic growth is slowing, but the shift to a techco model offers telcos a new path to sustainable expansion. This approach involves adopting modular, API-driven architectures to release products more quickly and support innovation across diverse service areas.

The key to this transition is composable architecture, which allows telcos to build services in smaller, modular units.

Global research confirms this trend: costs of launching new products have already decreased by 30% and could reach a 50% reduction. Time-to-market is also improving by 25%. As telcos modernize with API-first architecture, these results are set to improve even further. Learn more about modular approach to development here.

Trend #2. Cloud and open APIs: unlocking new service opportunities

Cloud technology and standardized APIs are central to the telecom transformation, particularly as they enable collaboration across industries. These digital building blocks allow telcos to develop flexible and scalable services, opening the door to innovation in sectors like finance, e-commerce, and logistics.

Telefónica’s Open Gateway initiative, which offers open APIs for telcos and partners, is a key example of this cross-industry cloud transformation. This shared infrastructure enables developers to build on telecom capabilities across various industries, expanding the scope of telecom services beyond traditional boundaries.

By integrating cloud and DevOps practices, telcos are also speeding up development cycles and enhancing service quality. Cloud provides flexibility, DevOps enables faster releases, and Agile ensures adaptability with a customer focus, which illustrates the synergy required to deliver seamless, customer-oriented services.

Trend #3. Optimizing team dynamics and leadership

A significant, often overlooked component of digital transformation is the shift in how telecom teams are structured and led. For telcos to fully benefit from the digital technologies they adopt, leaders must cultivate collaborative and adaptable team dynamics that align with the digital shift.

One of the ways to achieve the right cultural mindset is moving from a project-centric toward a product-centric model. It will not only reduce duplicated effort across teams but also foster a sense of ownership and accountability at every stage of development, as teams act as CEOs of their own products.

Agile methodologies are also crucial practices that help telecom teams shorten product development cycles and respond more rapidly to customer needs. This adaptability is especially critical in a fast-paced, customer-centric industry.

Digital transformation requires leaders who understand the evolving dynamics between technology and team structures, fostering environments where innovation thrives. With empowered, cross-functional teams, telcos are better positioned to navigate the rapid changes in the digital economy.

Key takeaways

These three digital transformation trends are often overlooked, yet they represent a comprehensive approach to transformation in telecom. The shift to a modular architecture empowers telcos to operate as agile tech companies, cloud and open APIs are unlocking opportunities for cross-industry collaboration, and moving to a product-centric mindset helps teams own their software products and release them quickly. Overall, it means the shift is not only about technical upgrades but also about reimagining how telcos operate as an organisation.

If you want to learn more about the ways to implement the digital transformation project in your telco organization and move from telco to techco, read our free Telco-to-Tehco guide.

last update

November 8, 2024