Communicating a Change in Culture

Telecom companies prioritize customer service and support, sales and channel enablement, and back-end processes for developing digital transformation strategies at the enterprise or business level. This indicates an industry preoccupation with customer acquisition, growth, and obsession with customer service and support.

The overall approach of telecom companies, however, lacks consistency in customer value enablement functions (HR, finance, accounting) when compared to the Digital Champions. Digital Champions think about the potential of digitalization across all dimensions (customer experience, brand, loyalty, growth), efficiency of back-end operations, employee experience, and finance.

Consequently, a majority follow rigorous strategy development across the enterprise or within the function. In all these cases, it is the business functions and leaders that lead the development of vision, strategy, and execution plans.

>Digital Transformation in a Highly Competitive Market

Top Concerns for CEOs in the Telecom Industry

The next generation of telecom CEOs will be defined by who acts aggressively, risking short-term advantages to seize long-term market growth. To understand the changing environment, here are the top five concerns that CEOs will need to address as the industry accelerates into the digital era.

Shifting Digital Priorities

Shifting Digital Priorities

People and businesses shifting to digital means to manage their workloads have led to an unexpected surge in fixed and mobile network traffic and access demands. To address this unprecedented situation, telecom network operators must increase bandwidth and leverage digital technologies. This is a huge opportunity in the industry.

Customized Service Offerings

Customized Service Offerings

Telecom CEOs will need to focus on cutting-edge technologies, aggressively monetizing infrastructure investments, and learn from the examples set forth by the hi-tech industry. Technology is inevitable, but disruption can be mitigated by new, customized offerings to enable seamless interaction with users while still moving forward with business processes.

Talent Acquisition

Talent Acquisition

With the challenge of keeping workers connected, CEOs will need to address the systems that streamline collaboration. Maintaining workplace security while simultaneously opening new channels of communication will be key to retaining the top talent in today’s rapidly changing workplace environment.

Supply Chain Disruptions

Supply Chain Disruptions

The pandemic has shown that CEOs will need supply chain contingency plans in place to meet customer demand. Developing a proactive and data-driven approach will help identify potential vulnerabilities and choose the best alternative sources to safeguard the organization from supply-chain disruptions.

Cyber Security Threats

Cyber Security Threats

With the reliance on connectivity growing daily, telecom CEOs will need to ensure they take the right steps to safeguard themselves and their customers from security threats. While no organization can eliminate the risk of security breaches, seeking out the right third-party Managed Security Providers (MSPs) will help telecoms strengthen their threat monitoring and alerting capabilities while meeting compliance standards.

Design Thinking for Innovation in Telecom

Design thinking is a method used in ideation, solving problems, and software development. It consists of an iterative design process with five major steps: empathize, define, ideate, prototype, and test. Design thinking compels teams to think about solutions from a user/stakeholder point of view (not a technology point of view). This approach guarantees a validation of the need or value and sets teams down the right path to develop the right form factor and experiences.

However, given the low levels of investment in digital technology foundations, telecom companies are limited in the effective use of advanced technologies to select initiatives. Few technology areas such as IoT, RPA, machine learning, and design thinking have been used to create new business models, products & services, and customer service and support.

The Most Successful Digital Transformations Are Powered by Analytics Capabilities

Our benchmarking services are powered by over 1.5 million data points in addition to our primary research and data collection capabilities. With access to leaders across more than 40,000 companies in various size segments, industries, and geographic locations, we can quickly gather additional data to address how your business is performing against the competition.

A graph showing which industries are investing the most in digitalization.

Source: Trasers

Data analyzed in this report comes from 4,000+ responses. For the telecom industry, data from 234 companies have been used.

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The State of Digitalization in the Telecom Industry

Over 70% of telecom companies are in various stages of cloud adoption for their infra, analytics, and business applications, following the evolutionary path of Digital Champions. Except for IoT on the cloud, a large cross-section of telecom companies are in the value realization and implementation phases of cloud migration. Telecom now recognizes the cloud as a significant factor in transformation. It shows a greater willingness to take risks by migrating infrastructure, analytics, and business applications to cloud.

30% of telecom companies are migrating to the cloud for analytics. Another 41% of telecom companies are in the planning stages and are laying down the building blocks to cloud migration, such as moving data and deploying MDM and governance frameworks. Shrinking margins, coupled with the commoditization of services, are the primary drivers for telecom companies to move infra to the cloud. 12% of organizations report they are in the value realization phase, and another 35% of companies state that they are in the implementation phase.

In terms of migrating business applications to the cloud, one-fifth of the telecom companies are in the value realization phase, while another 23% are in the implementation phase. IoT on the cloud is poised to be the next harbinger of disruption and business transformation in telecom. It is the next sign because service providers seek to collect as much data as possible from towers, network equipment, sensors, and other resources to derive operation insight. 50% of the companies in telecom are in various stages of preparing, planning, and implementing cloud migration of IoT applications and analytics.

Only 7% of Companies Are Delivering on Their Transformational Initiatives

Our research has shown that 30% of companies will fail to survive this decade due to an inability to evolve digitally. To address this negative trend, we have developed the Digital Enterprise Evolution Model™ (DEEM).

Digital Enterprise Evolution Model™

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DEEM allows our clients to recognize digital evolution patterns, implement benchmarking and prioritization strategies, and initiate application management protocols to satisfy stakeholder and market requirements.

Securing Telecom’s Future

Security threats require planning and preparation. Only 33% of telecom companies report including data security in their 2-year plan. Given a much higher level of cloud adoption or digitalization, 91% of Digital Champions are focused on data security while investing across the board.

Digital Champions focus on application defense using AI the most, with 37% of them ranking this as their top priority, followed by a strong focus on self-defending networks), and anomaly detection software coming in third (23% choosing this as their top priority).

Telecom companies rank using machine learning defense applications as their main priority when it comes to security technologies (43% ranking it as highest priority), followed by the usage of AI (23%) and self-defending networks (17%). The focus on AI-based application defense shows that the foundation layer of aggregation and parsing is already in place, making the next layer of AI-based defense and self-defending networks possible.

Training Is Essential for Telecom Long-Term

Telecom companies need to close the training gap to ensure seamless day-to-day functioning of digitalized business operations. Talent training and readiness are directly correlated with the effectiveness of digital transformation programs in all industries. Most organizations do not invest enough in role-based training on digitalizing functional operations and technology or communicating with various stakeholders.

The correlation between the scale of training investments and the effectiveness is crystal clear, which is why Digital Champions have invested heavily in role-based training and certifications. Investing in training helps in accelerating the R&D cycle, learning from feedback, and continuous improvement.

A well-trained workforce continuously learns, and thus, sets up each iteration of transformation for higher success. While it is good news that only 5% of companies in all industries report an inadequately trained workforce, there is ample opportunity for telecom to close the gap by better meeting the needs of an evolving workforce.

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