Telco to techco

As featured on BusinessMirror: Telco to techco

The term “techco” is a relatively new buzzword that has emerged to describe the transformation of traditional telecommunications companies (telcos) into more technology-focused and innovative businesses. This transformation is driven by the rapid pace of technological change and the increasing demand for digital services.

The evolution of telcos into techcos reflects the convergence of telecommunications and technology. As the digital world becomes increasingly interconnected and reliant on data, techcos are poised to play a crucial role in shaping the future of communication and innovation. Today’s telcos know that in order to survive and thrive in the digital age they should be built around their customers, with an ability to continuously respond and adapt to ever-changing needs.

Major telecommunications companies in the Philippines have already transitioned from being traditional telcos to techcos, positively impacting their businesses in various areas, including digital inclusion.

Telco service revenue has stabilized over recent years. A TM Forum report states that despite substantial revenue growth in technology-related industries, telco operators experienced slow revenue growth at a compound annual growth rate (CAGR) of just under 1 percent. This sluggish growth is primarily attributed to stagnant consumer service revenues, with both fixed and mobile subscription numbers reaching saturation points, and intense competition continually eroding average revenue per users (ARPUs). As a result, telcos are increasingly shifting their focus to the business-to business (B2B) segment as a key driver for revenue growth.

 Techcos strive to understand and meet the needs and expectations of customers, fostering a customer-centric mindset. Products and operations are designed to focus on delivering the best customer and shareholder experience through connected value streams that align across the business end to end. Leveraging technology, techcos enhance customer interactions and gain deep customer insight to continuously improve their offerings and customer satisfaction.

Techcos design and deploy digital services over cloud architectures to maximize efficiency, flexibility and scalability. Decoupling the software and hardware enables generic hardware to be used. Virtualization of resources maximizes flexibility and scalability. Application programming interfaces (APIs) simplify access and real-time orchestration. And that gives product managers and software developers the flexibility to focus on customer expectations when developing product features and designing user journeys.

Techcos develop a spectrum of innovative services delivered and/or consumed over digital channels. They are constant innovators and continuously launch pioneering products and services while enhancing existing ones. At the same time, the decoupling of the software and hardware layers has led to the emergence of two distinct models in the technology space—digital service providers that offer digital solutions and cloud service providers that offer services to developers and digital service providers.

Techcos excel at creating seamless, intuitive and engaging user experiences across a range of digital channels, platforms, devices and contexts. They combine technologies like customer experience management systems, self-service platforms, chatbots and AI-enabled virtual assistants to deliver real-time order to fulfilment, self-care, charging and service monitoring.

Techcos actively engage in the collection, storage, analysis and utilization of diverse data sets to generate insights, make decisions and create value. Leveraging user data analytics and artificial intelligence (AI), they extract insights on customer behavior to develop personalized services (such as dynamic pricing, tailored service plans, customized marketing offers and customer service) and optimize operations.

Techcos leverage the flexibility of their operating model, partnerships with hyperscalers, co-creation approaches with vendors, and deep insight into customer behavior and expectations to rapidly adapt to changing customer needs, market conditions and technological advancements. They promote experimentation, rapid prototyping and continuous learning to stay ahead of trends and emerging opportunities which enables them to go to market faster with new services and features.

In the digital era, tech talent is one of the scarcest strategic resources. Techcos nurture a culture and professional environment that attracts top talent, provides opportunities to work in leading-edge projects and technologies, offers clear career paths and helps employees to grow.