The digital transformation of the telecommunications sector has the potential to unlock more than $2 trillion in value for the industry, consumers and wider society over the next decade according to a new report published by the World Economic Forum (WEF) together with global professional services company Accenture.
The authors note that a series of digital, industry and customer trends is accelerating digital transformation. The telecom industry is gearing up for a massive increase in demand from other industries, forcing telecom operators to redefine customer experience.
The report indicates that networks will evolve from being differentiated on proprietary hardware to an era of software-defined systems. Moreover, pressures on traditional revenues are forcing operators to look for new digital business models and service areas, with areas such as IoT (internet of things) likely to emerge as new battlegrounds.
The analysis identified four digital themes that will have the greatest impact on digitization over the next decade:
- Networks of the Future – Virtualization and an abstraction of the physical hardware layer promise to fundamentally change the basis of future technological differentiation by creating networks that will be self-aware, self-optimizing, self-healing and self-secure.
- Beyond the Pipe – The increased digitization of consumers and businesses presents the telecom industry with important opportunities to extend revenue streams beyond just connectivity through IoT, digital services and entirely new models of digital communication.
- Redefining Customer Engagement – To win the race for customer loyalty and mindshare, the telecom industry will need to increasingly deploy features and tools that deliver delightful digital experiences.
- Bridging the Gap on Innovation – The need for rapid innovation, greater convergence and new services means that telcos must fill key capability gaps using innovation models and revamped talent strategies for a digital workforce.
The report forecasts that software-defined networking (SDN) and network functions virtualization (NFV) could be worth a total of $220 billion for network operators and equipment providers over the next decade. Much of that figure comes from a drop of up to 30 percent in network and operational technology spending coupled with energy cost reductions of up to 50% by 2025.
Analysts estimate that SDN and NFV could generate savings of 25% to 75% of overall operator operating expenditure thanks to significantly reduced provisioning, monitoring and hardware costs.
These technologies also promise to create value for customers through flexible services, faster times to market and improved user experiences.
To download the digital transformation report by WEF and Accenture click here
To learn about Telco System’s SDN & NFV Open Metro Edge solutions, click here