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Here’s a better way to do a digital transformation in the telco industry
Alex Semenov
Chief Executive Officer
Ellen Snesar
Content Manager
May 21, 2024
Telecom companies need to catch up. Between 2015 and 2020, the global telco sector has grown just 28% in total shareholder returns, compared to an average 111% across other sectors.
The most frequent solution to the growth challenge has been moving from a telco to a techco. This means transforming a business from a telecom company providing just mobile network services into a technological company that can compete with industry giants and hyperscalers. In this blog post, we will look at 4 telco companies using the most efficient path towards becoming a techco—building a digital ecosystem.
Jio’s journey from a telecom company towards a digital ecosystem started in 2016, when it was a pure-play 4G LTE mobile network operator. Back then, Jio disrupted the Indian telecom market with free voice calls and affordable data plans. However, its ambitions went beyond connectivity.
Jio started building an entire ecosystem by launching JioFiber, a fiber-to-the-home broadband service offering ultra-high-speed internet, TV services, and smart home solutions.
Later, the company ventured into other areas. First came entertainment with JioTV, JioCinema, and JioSaavn for streaming content. JioMoney, a digital payments service, was introduced later. Finally, the company launched the MyJio app as an all-in-one services interface.
Recognizing the potential of emerging technologies, Qualcomm, Google, Intel, and Facebook partnered with Jio and invested over $10B in Jio business. These collaborations enabled Jio to develop cutting-edge solutions in AI, IoT, cloud computing, and 5G.
Later, Jio’s ecosystem boomed with services like JioMart for e-commerce, JioMeet for video conferencing, JioHealthHub for telemedicine, and JioPages for small businesses. They even launched an affordable JioPhone to bring the Internet to millions of Indians.
Today, Jio is not just a telecom company but a digital services conglomerate, offering Indians access to advanced customer-centric services.
MTS is the biggest mobile operator in Russia. The company unveiled its ecosystem plan in 2019, after presenting its new Customer Lifetime Value 2.0 strategy. It was focused on four business verticals: telecom, fintech, media, and enterprise solutions. The telecom business, however, remained the core of the ecosystem.
All four verticals served one goal: increase the number of subscribers using several MTS products, not just connectivity and a mobile network.
Now there are more than 30 applications in the MTS ecosystem, with MyMTS being the flagship digital product. Through MyMTS, users top up their accounts, manage the tariffs, and access support. Ancillary services are available in other applications, not in the main one.
Another feature of the MTS ecosystem is that subscribers of any operator can use the ecosystem services. Other operators usually take a different approach, for example, only Jio subscribers can use Jio’s entertainment services. For MTS, however, the user’s mobile operator doesn’t matter—they can create an account and get a single MTS ID without switching to MTS mobile network. This way the company is trying to reach more users and lure away the audience of competitors.
Single ID gives MTS subscribers access to entertainment services like music, books, videos, TV, and cinema tickets. The operator also gives access to watching TV channels, movies, and TV shows via smartphones, tablets, and smart TVs.
Vodacom is a leading mobile telecommunications company in South Africa. Vodacom recognized the need to evolve beyond just providing connectivity services when it faced increasing competition.
A key part of this transformation was adopting an omnichannel strategy to deliver a better experience across channels. Vodacom invested in advanced customer experience and call center technology, which helped them monitor customer journeys across various touchpoints like voice, chat, email, and social media.
The insights Vodacom got through using technology showed the company that there’s a niche in the market—the lack of services for the unbanked population. Thus came M-Pesa, a mobile money service for mobile banking and virtual cards.
Through adding financial services, Vodacom changed its brand positioning. Vodacom Business, a corporate division in the Vodacom Group, was rebranded as a techco—a trusted technology partner for businesses.
Now Vodacom is considered a digital services provider, offering solutions in finance, education, and e-commerce.
Turkcell is the top telecom company in Turkey. A key part of its transformation was building a digital ecosystem of apps and services that generated $150 million in 2021.
One of the first initiatives was the launch of BiP, a communications platform for instant messaging and voice and video calls. Later on, Turkcell introduced fizy, a music streaming platform, and TV+, an OTT TV platform offering live and on-demand content.
The next step was to venture into digital payments. Turkcell developed Paycell, a digital payments platform, for a seamless and integrated experience for customers within the digital ecosystem.
The ecosystem strategy helped Turkcell decrease mobile churn by 5-12% and grow the average revenue per user (ARPU) across all services by 5-10%.
This transformation has positioned Turkcell as a champion in the digital services space, driving innovation and progress in the markets it serves.
Telecom companies are evolving into techcos to stay relevant. Building a digital ecosystem is one of the ways to do it most efficiently because it allows a company to diversify services and generate new revenue. We can help you learn from leaders like Jio, MTS, Vodacom, and Turkcell, and make sure your telco company also thrives in the tech-driven future. Feel free to reach out to our team to start your journey.
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