The telecommunications sector is changing. Traditional telecoms companies are becoming innovation-promoting, technology-oriented companies. The transformation from "telcos" to "techcos" is being driven by the rapid pace of technological progress and the increasing demand for digital services.
The ongoing development reflects not least the convergence of telecommunications and technology. As the digital world becomes increasingly interconnected and reliant on data, techcos have a key role to play in shaping the future of communication, networking, data management and innovation.
Decision-makers in telecoms companies are aware that customer centricity is a priority in order to increase resilience and generate new growth in the digital age. To do this, they need the ability to continuously react and adapt to changing customer needs.
We have analysed the details of the complex transformation processes in the white paper "From telco to techco: Towards tomorrow's telecom". (embed LINK)
Signals of change in the telecommunications sector
Sales of telco services have stabilised in recent years. It is striking that, despite the considerable growth in sales in technology-related sectors, telecommunications companies have only recorded low sales growth with an average annual growth rate of just under 1 per cent.
The main reason for this is stagnating sales in the end customer business (B2C): Subscriber numbers in the fixed-line and mobile sectors are reaching saturation points. Intense competition is having a negative impact on average revenue per customer. As a result, telcos are shifting their focus to the business customer segment (B2B) as an important driver of revenue growth.
Katja Modder
Partner, Head of Technology, Media & Telecommunications (TMT)
KPMG AG Wirtschaftsprüfungsgesellschaft
Dr. Jesco Willms
Partner, Performance & Strategy, Head of Integration & Separation
KPMG AG Wirtschaftsprüfungsgesellschaft
What telcos should do now
- The most important thing: Telcos should invest continuously to avoid falling behind within the industry.
- Business customers (B2B) are looking for secure, scalable telco solutions with integrated services and personalised support - this is where we need to start.
- Traditional telco models still focus on infrastructure and network operation and place less emphasis on the customer experience. There is potential to be realised here.
- The traditional business models of telcos are no longer suitable for tackling the new digital opportunities. Additional growth requires a technology-orientated change.
What are the main features of a Techco?
Techcos are evolved telecoms companies. They see the digital future as a great opportunity and prioritise innovation, new digital value levers and customer experience. Techcos are characterised in particular by their focus on the following aspects:
- Customer Centricity
- Digital user experience
- automation
- Data utilisation
A strategic paradigm shift is essential if a tech company is to be successful in the long term. It requires a holistic reorganisation of internal processes and structures. In order to adapt to the continuously evolving digital landscape, several complex tasks need to be mastered.
Telco companies that tackle these challenges effectively can achieve competitive advantages in the highly competitive telecommunications sector. One thing is clear: those who act with agility, offer smart technology solutions, promote innovation and prioritise customer needs can play a leading role in the industry.
How KPMG can support
KPMG Connected Enterprise can help overcome challenges around lack of customer centricity, missing links between individual business activities, previously unaggregated data and outdated technology systems. Using an agile approach, KPMG experts can assess and adapt your current approach to ensure it meets your current needs and conditions.
We support you in all transformation processes along the value chain - from customised strategy development to redesigning the customer experience.
KPMG Connected Enterprise is part of our approach for your successful transformation. The approach consists of four elements: Elevate, Connected, Powered and Trusted.
Elevate can help you to efficiently unleash your value creation potential. Regardless of where you are in your transformation and growth process: We can help you achieve measurable improvements in sales, operating margins, cost structures and working capital positions.
Connected can help you transform into a digitally connected and customer-centric organisation that is data-driven and powered by technology and human expertise to work more efficiently.
Powered can help you deliver transformation processes with leading operating models, structures and technologies, while improving efficiency, engagement, user experience and growth.
Trusted can help you embed a balanced approach to risk and regulation into every part of your organisation and increase stakeholder confidence. This enables responsible growth.
