Telecommunications industry insights Telecommunications industry insights Telecommunications industry insights

In an ever more connected world, telecommunication providers are at the heart of keeping society operating during the pandemic – for fast wireless networks with the remote workforce, elastic streaming of media, smart mobile functionality, rich data services and contagion heat maps. With the COVID-19 pandemic prompting lockdowns around the world, and with many people still spending much more time at home than before, there was a shift in network traffic from city centers to the suburbs, and the demand for fast broadband services soared with a quarter of the sector (24 percent) in ‘surge’ mode. Industry leaders, such as Comcast, AT&T, and Verizon, have seen a surge in their at-home internet and voice services in order to support the increased traffic for video conferencing, work collaboration tools, video streaming, and phone calls for work from home. With most consumers and businesses having experienced relatively few connectivity problems during the pandemic, telecom providers have proven that they have the networks and IT infrastructure to flex with demand.

While telecommunications has long been a key enabler of keeping business, governments, and capital markets running, there are also short-term and long-term challenges for telecom companies. While video streaming grew fast, video conferencing and collaboration tools grew even faster. Prior to the pandemic, download speeds for video streaming already had high performance. Upload speeds still need to catch up and are now being stress-tested with the influx video conferencing, work collaboration tools, remote learning, distributed cloud, and SaaS on the network. Companies have also grown in their expectations for fast, reliable connectivity as well as digital customer service and sales channels – an area where telecom has trailed behind other sectors such as retail and media. In the 5G space, telecom providers must solve for the rising expense costs associated with the buildout of the 5G network infrastructure and smartphones – an area where their profit margins already have strain but is a key area for establishing new customers. However, 5G also provides an opportunity for remote areas where there has not been established wired broadband as well as time-critical use cases in sectors such as healthcare. Notably, there is high demand for automation in the telecom sector (94 percent) with 18 percent of digital leaders having large scale implementations of AI/ML to help solve for challenges through self-optimizing networks, preventative maintenance of communications hardware, and virtual assistants. In addition, companies in this sector must utilize the full range of today’s technology tools – cloud, automation, AI – to deliver faster, more seamless services that deliver on customer expectations and meet seemingly insatiable demand.

There is no doubt that connectivity is at the forefront in the new reality. The telecom sector will remain a highly competitive and rapidly evolving market in which it is becoming ever easier to switch providers and where the quality of the customer experience supported by the flawless performance of the network is paramount. Building networks of the future will require understanding what the new reality for network traffic will be including a shift towards wide area versus metropolitan, optimizing upload speeds, and keeping a close eye on profitability of new and existing products and services. With the onset of 5G around the world, new and significant growth opportunities are opening up – but also a fierce and highly political race to win market share with many countries having banned international equipment or services in creating the 5G infrastructure needed.

Board priorities are strongly based around customer engagement, developing new products and services, and improving operational efficiency. They need to be agile, quick to respond to changing demands, and able to monetize their huge investments in building new 5G networks. With their ability to deliver voice, video, apps and data in our connected world, telecommunications and internet networks serve as the backbone for consumers, governments, and businesses. 5G implementation will continue across markets and offer unprecedented connectivity speeds, ushering in exciting developments in AI, autonomous vehicles, and infrastructure. But telcos have to look beyond mere connectivity and identify new ways to realize value – they need to behave more like pure technology companies, building a broad portfolio of services and products that users truly engage with, rather than traditional utility providers.

While KPMG firms are some of the largest providers of services to telecommunications organizations globally, we take a boutique approach to client issues with a focus on flexibility, adaptability, and innovation. We recognize that there are many on-ramps to supporting IT transformation and we’ve tailored our services accordingly:

• Strategy and operating model
• Organizational design
• Enterprise architecture
• Portfolio planning
• Merger and acquisition
• Integration and separation

• Scaling agile
• Product management
• DevOps tooling
• IT financial management
• IT service management
• IT asset management

• Cloud strategy
• Data center strategy
• Continuity and resiliency
• Workplace transformation
• Network modernization
• Cyber, risk, and compliance