Nearly 70% of leading telco said that 5G and Internet of Things (IoT) are the most important emerging technologies driving their digital transformation over the next five years, according to the latest EY report, Accelerating the intelligent enterprise.
Other emerging technologies that are pushing forward the industry’s digital transformation journey include automation (62%) and AI (58%).
However, according to the report, the telcos’ current use of digital technologies is heavily weighted toward customer-related rather than network-related gains. And while telco leaders are optimistic about the promise of digital transformation, but there is a lack of synergy in the application of emerging technologies at the network layer.
“While the network accounts for the lion’s share of industry investment and operational expenditure, telcos continue to focus the power of emerging technology around the customer,” said Tom Loozen, EY global telecommunications sector leader. “It is now critical that they take a holistic approach to the adoption of AI and automation by shifting their investment priorities and applying greater focus to use cases in less advanced areas like networks.”
The results of the EY report showed that nearly half (48%) of respondents said improving customer support is the main catalyst for adopting automation, while 96% said customer experience is the main driver for analytics and AI use cases over the next five years. Only 44% see network-related use cases as critical during the same timeframe.
Telcos must tweak current approach
The report found that the current approach to emerging technology adoption is out of sync with telcos’ long-term ambitions. Seventy-six percent say IT and the network are most likely to benefit from improved analytics or AI capabilities over the next five years, despite their reluctance to move beyond customer applications. This disconnect is echoed by the views of nearly half (46%) of respondents, who believe that a lack of long-term planning is the biggest obstacle to maximizing the use of automation.
Inadequate talent and skills is also cited as a key barrier to deploying analytics and AI, according to 67% of global industry leaders surveyed, while a third (33%) cite poor quality data.
“Migration to 5G networks and the rise of the IoT means the pace of evolution across the telecoms industry is rapidly accelerating. Operators have no choice but to transform if they are to remain relevant to consumer and enterprise customers, and achieve growth,” Loozen said. “To succeed in this environment, they need to take a long-term view of emerging technology deployment and create a more cohesive workforce that thinks and collaborates across organizational barriers.”
The imperative for telcos to be bolder in their approach to digital transformation and innovation is highlighted throughout the report.
Nearly all respondents (92%) admit they need to be more agile to realize transformation gains, while 81% agree that they should adopt a more experimental mindset to maximize the value of analytics and automation. As the choice of emerging technologies and processes continues to widen, most respondents (88%) also believe that their organization requires a better grasp of interrelated digital transformation concepts.