Deloitte TMT Telco 2030
Deloitte TMT Telco 2030
Introduction 04
Thinking in scenarios 06
Relevant scenarios based on identified key drivers 10
Critical uncertainties and how they shape our four scenarios 12
Generic key drivers – the same but different 14
Journey into our four scenarios 20
Taking the long view 34
Sources 36
Methodology 37
Contacts 38
03
Introduction
The pace of change in the European tele- There were incorrect predictions about the
communications industry is accelerating: development of computers, too:
the boom years are either over or coming
to an end very fast for most telcos. The tech •• In 1949, Popular Mechanics magazine
sector has seen enormous disruptive chang- forecast that the computers of the future
es affect social life, politics and business. would weigh no more than 1.5 tons.4
Throughout history, both society and indus-
try insiders have been colossally wrong or •• Even Steve Jobs, who was well known for
totally underestimated markets and gadgets his sense of customer needs, was totally
that we couldn’t live without today. wrong when he prophesied no hope
for mobile computers: “For the average
In the beginning, the telephone was not person, they're really not that useful, and
expected to be a success story: there's not all that much software for
them either”.5
•• Western Union, who dominated the
telegraph industry at the end of the 19th Another major part of the communications
Century, noted in an internal memo: “This industry, the Internet, is a hotbed for wrong
'telephone' has too many shortcomings predictions:
to be seriously considered as a means of
communication. The device is inherently •• Microsoft founder Bill Gates thought the
of no value to us”.1 Internet was just hype.6
•• In Germany, the first telephone directory •• Ron Sommer, then CEO of Deutsche
was popularly called “the book of 99 Telekom, said in 1990 that the Internet
fools”, as the general public believed the was a gimmick for computer nerds and
telephone had no future.2 he didn’t see any future in it.7
•• In the 1980s, when the first cell phones The accelerating pace of this change makes
were introduced, AT&T forecasted that predictions hard, so we adopted a more
there will be less than 1 million subscrib- holistic approach – and we now invite you
ers in the USA by the year 2000.3 to travel with us into four scenarios for the
telecommunications industry in 2030. Our
scenario approach does not aim to predict
the most likely outcome, but to illustrate
what could plausibly happen in the telco
world and how market players might deal
with many uncertainties along the way.
1
airncross, F. (2001)
C
2
Winkelhage, J. (2006)
3
Lozano, A. (n.d.)
4
Meigs, J. (2012)
5
Erdmann, C. (2011)
6
Handelsblatt (2014)
04 7
Pillkahn, U. (2013)
To be or not to be |
The future of the telco business model
05
Thinking
in scenarios
06
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The future of the telco business model
07
Most of the trends that telcos are exposed In this uncertain environment, industry
to display a high level of uncertainty – they stakeholders such as telco companies, ven-
could turn out to be disruptive, lead to dors, and other investors are asked to con-
exponential change over the next decade, sider long-term assets, and the decisions
or sink without trace. Shifting customer they make today will have a major impact
behavior, with ever-increasing expectations on users, companies, and the economy
and pressure from both existing and new in the future. As we have seen, traditional
players in the game, affects their business, analyses struggle with forecasting, since
while more and more revenue streams ei- no amount of research can remove all the
ther face strong decline or are being taken uncertainties affecting the successful out-
over by other players such as over-the-top come of a decision over decades.
(OTT) players and tech giants, challenging
the telcos’ traditional business model. Yet Nevertheless, telco players need to make
the transformation of their core business, these decisions, and scenario design is one
coming sooner and faster than foreseen, way to deal with the lack of certainty and
is pushing telcos to step outside of their look beyond the conventional planning ho-
traditional thinking and become innovation rizon. While predicting the future is usually
drivers. impossible, scenario design helps to devel-
op robust strategies that will work in dif-
ferent potential futures by highlighting the
risks and opportunities of certain strategic
issues. Scenarios are stories, narratives
about alternative future environments in
which today’s decisions could play out: they
are neither predictions nor strategies. Each
scenario models a specific, plausible world
of the future which differs considerably
from the others. Scenario design emphasiz-
es large-scale forces that might move the
future in different directions.
08
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The future of the telco business model
09
Relevant scenarios
based on identified
key drivers
Extensive research based on Natural
Language Processing algorithms, desk
Examples are the ownership of network
innovation, which is an important success The best
research, and expert insights generated factor in the telco ecosystem. Network
a long list of drivers that could shape the
future of the telecommunications industry.
innovation could either be driven by the
telcos themselves or outsourced to other
way to predict
These were then analyzed and clustered
into five categories: social, technological,
players in the value chain, such as hard-
ware vendors, while telcos merely use the the future is to
economic, environmental, and political. The network.
drivers were then rated for their degree of
uncertainty and their impact on the tele- Another example of a high impact and high
create it.
communications industry. uncertainty driver is the role of OTT players,
Peter Drucker
who could become a significant threat for
telcos as their power in the market increases.
OTTs could take over customer relations if
users perceive connectivity as a necessary
but basic utility. It is also imaginable that
the telcos own the user data, analyze their
needs, and use this knowledge and insight
to monetize the relationship.
10
To be or not to be |
The future of the telco business model
Zone of interest
High
Vertical Economic
Industry Agile management
Communication integration climate
Aging population alliances
behaviour method
Industry
Broadband
consolidation Changing Competitive
Energy infrastructure OTT player
Mobile vs IoT workforce development
consumption competition
stationary usage
- Acceptance of
E-Band Augmented reality
Bandwidth / e-waste digitalization in social life
latency
Usage
restriction for Crowd sourcing /
public players collective intelligence
Robots
Authentication (3D/4D)
mehod Printing
Global
warming
Low
11
Critical uncertainties
and how they shape
our four scenarios
All high impact and uncertain drivers in the The “Ownership of the (network) tech- users and network, or device producers
zone of interest were clustered into critical nology layer” axis can tip in one of two might equip their devices with virtual SIM
uncertainties based on feedback from in- directions. At one end, telcos own the cards that choose the best provider in a
dustry clients and expert knowledge from network layer, at the other they are fully dynamic process. This cluster contains var-
the Deloitte EMEA TMT Community. These separated from the network layer, which is ious drivers such as customer service and
critical uncertainties were then enriched dominated by vendors as the main source contact, competitive development, willing-
with other drivers which are less uncertain of innovation, while telcos outsource most ness to pay for telco services, the number
and have less impact, in order to enhance tasks. This cluster is driven by network of personal devices used, (un)bundling of
our understanding of the concepts the clus- innovation, bandwidth, and latency devel- services, the role of OTT players, and data
ters represent. These critical uncertainties opments, the mobile communication cell protection and privacy. With the help of our
were then tested for inter-dependence network structure in the form of 5G/6G, scientific scenario development approach,
and the relevance of their combination. the Internet of Things, and also Software these critical uncertainties shaped four
This process led to a scenario matrix with Defined Networks. possible scenarios.
two axes, “Ownership of the (network)
technology layer” and “Dominance of the The second critical uncertainty, “Domi- In “The engineer strikes back”, telco oper-
traditional customer relationship”, as criti- nance of the traditional customer relation- ators master both customer relationships
cal uncertainties. ship”, can logically also tip in one of two and the technology layer. In the second
directions. At one end, telcos as primary scenario, “The new wholesale truth”, telcos
providers of value-adding services like com- have been driven out of the customer
munications and media access continue to domain but remain masters of the tech-
own the traditional customer relationship, nology. Telcos retain the primary customer
but at the other they could also be fully relationship but transfer the technology en-
isolated from the customers, who are tirely to vendors in “The virtual telco”. In the
served by various providers such as OTTs last scenario, “A vendor brand”, telco players
or technology companies. For example, IoT are driven out of both domains.
providers could insert themselves between
12
To be or not to be |
The future of the telco business model
Customer relationship
remains with telcos
Technology Technology
competence Dominance of the Dominance of the competence
fully with technology layer technology layer returns to
vendors telco players
13
Generic key drivers –
the same
but different
Regardless of the scenario, some
general topics emerge. Most of
them reflect the external environ-
ment, such as customer behavior,
data privacy, and regulation, while
other factors clustered under ope-
rational excellence can be influen-
ced by the telcos themselves.
14
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15
Customer behavior Fig. 3 – VR-Revenue forecast for Germany
Today, 62% of under-24-year-olds look at
their phone within 15 minutes of waking up,
in million Euro
compared to 36% of the overall population.8
With the accelerating pace of technological 1,020
100%
development, customer behavior in 2030
90%
will be significantly different from today’s
290
world, since many aspects of our lives will
80% 790
be interconnected and ‘smart’, featuring
70%
remote-controlled gadgets, automatic re-
orders from fridges, and autonomous vehi-
60% 300
cles. The way we communicate and interact 510
50%
with technology will change enormously,
from augmented reality to virtual reality
40% and
240
330 730
eventually holographic communication. The
30%
worldwide virtual reality market is already
210 490
worth USD 1bn; by 2020 the German 20%
market 160
will have reached this size on its own, with 270
10% 130
further exponential growth expected sub- 120
0% 30
sequently.9
2016E 2017E 2018E 2019E 2020E
8
Böhm, K. (2015)
9
Lutter, T. , Meinecke C.-M.,
Prescher, D., Böhm, K. &
Esser, R. (2016)
10
Wigginton, C. (2017)
11
Sallomi, P. & Lee, P. (2017)
16 12
Briggs, B. & Hodgetts, C. (2017)
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The future of the telco business model
13
riggs, B. & Hodgetts, C. (2017)
B
14
DeNisco, A. (2017) 17
The most valuable Regulation
In the past, the telco industry was a highly
major effect on telcos in all scenarios and in
various dimensions, since levies and taxes
1,878,866
1,621,187
1,354,037
509,785
217,590
72,149 84,992
19,957 31,056 1,449
18
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The future of the telco business model
At the same time as becoming leaner, Leadership and talent drive innovation. In view of the shortage of
telcos are required to tap into new data Management processes will change highly skilled technology experts and data
sources for analysis. Today, companies only radically in all scenarios: not only will the analysts that we are likely to face in 2030,
analyze a minor portion of the available development and use cycles for products telcos need to invest in employer branding
data. Estimates show that by 2020, 37% of become shorter at exponential speed, but to remain an attractive employer when
the digital environment will consist of valu- also decision-making cycles will change at expanding their workforce. In the case of
able information once it is analyzed; conse- a rapid pace, leading to agile management downsizing, retention strategies for key
quently, companies that tap into all relevant methods to stay innovative and relevant in staff are vital. The key to success will be a
sources and analyze them sufficiently can an ever-changing market environment. new set of skills such as engineering, soft-
achieve more than USD 430 billion world- ware, and analytics that enable employees
wide in productivity gains in comparison to Across all scenarios, telcos will have to master new technologies and innovative
their peers who do not leverage this data.17 outsourced most non-core activities that business models, yet such skillsets are rare.
Based on their ability to analyze a full set of they still conduct in-house at present. Telcos therefore need to adapt their HR
data, telcos can validate or formulate their Operational excellence will enable telcos in approach to attract the profiles needed.
expectations, advise decision-making, and 2030 to capitalize on big data to be more
formulate future strategies. efficient in the network and the customer In addition, the general workforce will need
base, e.g. by lowering the costs of customer to be more flexible and agile. Only the core
acquisition and retention and network workforce, consisting of top decision-makers
maintenance. Despite technological and highly skilled risk-takers who would
progress, the workforce will still be a key otherwise not join the company, should be
resource for telcos. All companies, regard- employed permanently. All other areas of
less of sector, will be looking for people the workforce will be staffed on demand on
who have the mindset and the ability to a pay-per-project basis.
15
uropean Commission (2016)
E
16
Brake, D. (2015)
17
Briggs, B. & Hodgetts, C. (2017) 19
Journey into our four
scenarios
20
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The future of the telco business model
21
Scenario 1:
The engineer strikes back
22
To be or not to be |
The future of the telco business model
Customer relations Business model stage in the value chain they have a key
More than a third of the population belongs In In this scenario, a new generation of competitive advantage. Telcos use their
to a digital native generation that does not hands-on, cutting-edge, software-based knowledge of customer demand to tailor
understand the concept of pay-per-minute network engineers enable innovative rev- their product portfolio and bandwidth
offerings; rather, they see communications enue generation. Telcos offer services that expansion roadmap.
and basic connectivity as basic needs to be penetrate and connect different aspects of
financed by a tax such as a network levy. people’s lives by providing individual, tech- With their platforms developed in-house,
Customers are very willing to pay for fast based services that are tailor-made to meet telcos can orchestrate an ecosystem of
bandwidth, superior network quality, and the requirements of their B2B and B2C external and self-built offerings. In the
a premium customer experience offered customers. End-user products can leverage end-user, B2C environment, the telcos have
by telco players going beyond free, basic optimized network utilization with special to offer total connectivity across devices
connectivity. Display communications deal propositions that depend on user and multiple services. They can seamlessly
have been replaced by conversational location and use time and thus boost the embed different smart home systems into
communications like hologram technology, profitability of their business. Telcos also their world and connect it with third party
communication lenses, built-in devices, need strong customer segmentation to of- applications such as health or mobility sys-
or ultrasonic communications. All aspects fer perfect price differentiation and benefit tems. For B2B customers, telcos will be the
of life have been changed by intelligent from individual users’ willingness to pay. single network enablers for all IoT solutions
technologies, such as cognitive computing, that require connectivity. This will be highly
which make life easier and shape human To further increase attractiveness for relevant in a market that is already expo-
interaction. Even though digitalization is shareholders, highly profitable business nentially growing from 12.1 billion installed
fully a part of daily life, device producers can be generated from OTT payments for IoT units two years ago to 30.3 billion units
have a weak relationship with end users, premium connectivity to end users. Due to in the near future, making it a USD 3 trillion
since telcos own the relationship and their strong position as network owners, market. Telcos can partner with enterprises
directly provide value-added services to telcos can be highly selective in their choice who will be users of 60% of all IoT devices.18
customers. This is facilitated by other tech of OTT partner. The combination of sover-
players such as OTT players, who remain eignty over network technology, software,
in their traditional domains. With changes and innovation cycles provides telco players
in the regulatory environment, the use and with stronger bargaining power over OTT
analysis of user-specific data is now widely providers than they have seen for a long
possible. time.
Telcos have developed platforms con- For network infrastructure elements, the
necting users’ devices and providing the telcos have a good bargaining position with
necessary connectivity, so they are the the hardware vendors. By managing third
intermediary in the market. OTTs and tech party networks telcos can generate addi-
players rely on access to these platforms tional income streams from small providers
to interact with customers. Consequently, such as municipal utility providers.
all end-user hardware devices made by
various manufacturers are fully connected Furthermore, telcos initiate their own
via the telcos’ platforms. Using a Swedish alliances with their partners of choice to
smart home system with a Chinese mobile integrate their offerings and market indi-
phone to play Arabic music on American vidualized products and services to their
audio equipment does not cause any customers on their own platforms. The
complications. This decouples hardware success of the platforms depends heavily
companies and OTTs from their customer on the telcos’ ability to secure and interpret
relationships. user data, which enables them to analyze
customer needs and monetize the data.
Telcos enjoy high loyalty on the part of their While acting as a broker between OTTs and
customers, who consequently bear high customers, the telcos also lock consumers
costs for switching their communications into their own ecosystem; as they are in a
provider. position to analyze customer data at every
18
Vesset, D. & Schubmehl,D (2016) 23
Client interaction will require advanced data
analytics to streamline operations. At the
same time the corporate culture requires
an entrepreneurial, change-driven mindset
as telcos are in direct competition with
innovative OTTs, incumbents and startups.
Operational excellence as capacity planning or product design. By talent, especially for technology experts,
Since customers see connectivity as a 2030 there will be few telco processes that with players from a vast range of industries,
low-cost, low-involvement commodity and cannot be automated with AI-enabled tools. the telcos rely on strong employer branding
a basic need, telcos must streamline their The virtualization of the network results in and attractive salary packages to gain and
processes to cut costs and become leaner, very lean and automated operations that retain their talent.
which will change operations significantly. enable a never-before-seen efficiency. As
the telcos have ownership of the network, Due to the strong demand for innovation,
Client interaction requires advanced they need to hire and upskill talent such as they need to have strong R&D initiatives
analytical capabilities to offer in-depth software developers, network technicians with a short time-to-market in order to fill
knowledge of customer needs. This is gen- and engineers. Physical network expansion customer demand gaps with new services
erated through near-perfect segmentation is fully outsourced to construction and field and products. This requires an entrepre-
based on personalized insights, predictive service partners. neurial, change-driven corporate culture as
analytics, and pattern recognition. Most telcos are in direct competition with innova-
basic customer-facing processes are fully Global telco alliances are a key differentiator tive OTT incumbents and new startups.
automated using AI-based tools, which for telcos in this scenario. On the one hand, Lobbying is a key enabler for telco players
permit them to anticipate customer needs they have to develop new global standards to steer political decision-makers into a
and wishes. In the rare cases in which these together with other global telco operators favorable direction. They are consequently
algorithm-based services cannot find a to keep non-telco players under control. On developing and extending their lobbying
solution, telcos run call centers staffed by the other, they can boost their efficiency capabilities.
humans to provide a first-class customer by sharing network assets or operational
experience to premium customers. These capabilities such as network monitoring
call centers make premium positioning centers, giving them scope for OPEX and
possible for the top ten per cent of paying CAPEX reductions. These deals are a valid
customers in order to monetize their great- alternative to market consolidation to reach
er willingness to pay. global scale. Thirdly, telcos build alliances
with partners from other industries such as
Software-defined networking and self-or- entertainment, banking, or smart home, to
ganizing network assets rely on highly au- include partners’ offerings in their self-de-
tomated and predictive network analytics veloped services.
for all purposes such as incident handling,
maintenance, and network expansion. The Even though telcos are highly automated,
softwareization of networks will bring auto- they are still in need of talent with a funda-
mation and AI into the hardware technology mentally different skillset (such as software
layer and automate processes that current- and analytics skills) to manage network and
ly require major human interaction, such clients. As they are in fierce competition for
24
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The future of the telco business model
19
Smud, D.; Wigginton, C. Ninan, S. Ramachandran, K. , Moceri, P. (2017) 25
Scenario 2:
The new wholesale truth
26
To be or not to be |
The future of the telco business model
Customer relations As a key economic factor, the government Since the various telco players face a similar
End-user devices are separated from the takes an active part by publicly subsidizing situation, combining their forces in alliances
network and enable easy switching of net- the infrastructure and the necessary is a way to stay at the forefront of network
work operators with soft SIM technologies. innovation to connect the entire population technology.
OTTs and device producers have taken with high-speed internet and telco services.
advantage of alliances to disrupt the mar- This makes telcos the lubricant behind the
ket, which has enabled them to take over scenes that keeps the system running, as
the customer relationship. Initially seen society and the economy depend on the
as a gift, telcos opened up their customer services they offer.
data to OTTs, enabling them to completely
take over the customer relationships that Business model
telcos had maintained and invested in for In this scenario, the telco business model
so long. OTTs now collect and process needs to be refined to enable them to
customer data to enhance the customer succeed as a ‘smart pipe’ provider, since
experience, an advantage telcos cannot they can only offer wholesale products to
compete against. The OTTs’ abundant data OTTs. This development can already be
is a unique competitive advantage that can seen, as today’s customers spend more
be intensified with data from third parties time with OTT-developed products such as
which OTTs can acquire on the market. WhatsApp or Snapchat than with traditional
OTTs leverage this data to enhance cus- telco services. Microsoft’s communication
tomer service with a low headcount, thanks tool Skype already carries more than 25%
to Artificial Intelligence. However, their of all global cross-border call traffic.20
network competencies make third-party
connectivity revenues for telco companies Telcos have taken over the role of green-
possible. Customers display strong demand keeper for the publicly funded network.
for fast bandwidth and short latencies to Their main customers are OTTs who lease
connect to their OTT services and consume network capacity to provide services to
their multiple digital offerings. their end-users. In the buyer’s market of
network infrastructure, the telcos have
Traditional unbundled services are gone, a a good bargaining position as hardware
multitude of connected devices are oper- vendors rely on them, and since they run
ated in each home, family, and company. the publicly-funded network, the telcos
Apart from the customer-facing OTTs, benefit from their scale and manage
device manufacturers and tech companies external networks for third parties such as
own the end-user control points, since their municipal utility providers, charging them
devices are interoperable, connected, and for this service.
consequently make life easier for users.
OTT providers offer opportunities for
Generally, connectivity is a low-value com- additional revenues through premium
modity whereby the end-user segment of- connectivity sold via wholesaling. Having
fers very low margins to all players engaged been pushed to the side, telcos focus
in basic connectivity. Every citizen has the on developing the ‘smart pipes’ in “the
right to a 100 MBit connection at home, new wholesale truth”; they have several
which is financed with public network lev- choices here: they can offer small bundles
ies. Although many customers pay for con- of data with low discounts and thus higher
nected services and superior bandwidth, profitability or larger data-based wholesale
these cash flows go only indirectly to telcos, packages with high discounts and lower
as most revenues are generated by large profits. Furthermore, they can wholesale
tech companies, device manufacturers, and their entire infrastructure with higher mar-
OTTs. By now, customers can choose to ob- gins. As the network owners, the telcos are
tain connectivity and a service level either an enabling partner of IoT firms, providing
with a device or through a provided service. connectivity for manufacturers to connect
their machines and systems.
20
F orge, S. (2015) 27
Operational excellence Investment
To run this business model successfully, the In this world, telcos need to invest in two di-
organizational set-up needs major changes. mensions. First, they need to expand their
Telcos will have to transition into highly effi- network, where public funding is a strong
cient, fully automated utility providers with lever. To be able to control the network,
very lean structures. The telco players own telcos have to invest in IT and software
large parts of the network value chain and capabilities to design, build, and run future
rely heavily on network analytics to improve networks. Capabilities can be built in-house
their general operations and thus boost or may be acquired from competitors and
their revenues. Processes and predictive tech companies. Second, research and
network analytics have become essential development capabilities require heavy in-
for software-defined and self-organizing vestment in order to be at the leading edge
networks to optimize operations such as in network innovation in technology and in
incident management or maintenance. The setting new industry standards.
softwareization of networks will also bring
RPA into the hardware technology layer and
automate processes that currently require
major human interaction, such as capacity
planning and product design. However, the
telcos focus on technological service for
their wholesaling partners. Physical net-
work expansion as well as network opera-
tion and maintenance are fully outsourced
to construction and field-service partners.
Hope is being able
Telco alliances develop new global industry
standards that amplify the telcos’ prime po-
to see that there is
sition in network innovation. Thanks to their
alliances, telcos can combine their assets
via network sharing to split investment and
light despite all of the
maintenance costs.
28
To be or not to be |
The future of the telco business model
Scenario 3:
The virtual telco
29
Vendors not only drive the network infra- Business model for users to join and stay in these ecosys-
structure, but also enable and facilitate This scenario requires a business model tems. Telcos initiate agile development
IoT development, as they leverage their with tailor-made, individual products which capabilities to be able to fulfill customers’
customer relationships and their network meet customers’ requirements and which demands that are not yet served by partner
ownership to major tech companies. Telco must display a high level of flexibility. Cus- offerings. Partners join this ecosystem and
players own only few parts of the network tomers demand innovative pricing concepts incentivize telcos with commissions to push
capabilities which are dominated by large outside the classic minute-based plans that their specific offerings and hence provide
vendors, and can consequently only easily facilitate data sharing and enable all a new and significant source of income.
compete with these strong forces in global the benefits of connected living. To service These commissions are flexible, depending
development with difficulty. all the different levels of willingness to pay, on the importance of the service to cus-
strong customer segmentation for perfect tomers, and varies by customer segment.
Customer relations price differentiation will be necessary. As all Telcos are therefore taking on a broker role
Consumers’ lives are ‘smart’ and intelligent clients have different payment preferences, for B2B and B2C customers, which makes
across multiple connected devices; telcos telcos offer hybrid pricing models that them the central point of communications,
provide their customers with innovative – combine pre- and postpaid models with orchestrating the customer relationship,
largely network-agnostic – services from different payment forms. This is based on which brings benefits to both customers
the Cloud. Even though digitalization is fully the telcos’ ownership of user data, which and third party service providers.
integrated into daily life in every aspect of enables them to analyze customer needs
human interaction, device producers have and monetize user data. Operational excellence
a weak relationship with end-users. Since This business model requires a new opera-
connectivity is a commodity and consumers Telcos do not run their own network any tional excellence environment. As the telcos
are decoupled from the network, network longer but rather use rent and lease mod- are no longer in charge of the network, all
quality is no longer a unique selling point els from the vendors who run the network network operations have been handed
any provider can benefit from. Regulatory cost-efficiently; many brands lease network over to partners. In order to stay relevant
changes enable new data analytics meth- capacity for their customers and operate in this communications commodity market,
ods and facilitate the use of customer data. as mobile virtual network operators who data analytics are inevitable for the telcos.
Clients interact on automated customer supply the entire ecosystem with connec- Cognitive and conversational computing
care platforms via chatbots and self-care tivity. Their optimized services enable high as well as analytics-based and optimized
facilities with AI-enabled service offerings performance across all available infrastruc- processes are needed to remain relevant
from their telco provider. Telcos are thus tures. Freed from their infrastructure base, and succeed in the market with improved,
enabled to provide their customers with telcos are aiming for pan-European or even efficient customer services. The telcos
any information at any time via self-service global scale with their purely cloud-based therefore require a high level of customer
offerings. Customer service is a key differ- services that enable them to take advan- knowledge which is enabled by Big Data
entiator in the overall customer experience. tage of economies of scale by operating in a and analytical capabilities, leading to a
Furthermore, in case of interaction with single European market. world-class AI-enabled customer service.
human customer services representatives, They generate this through nearly perfect
AI can provide all relevant information to Other players are beginning to offer com- segmentation based on personalized
solve issues that go beyond the scope of munications services over the networks in insights, predictive analytics, and pattern
the self-service platforms. Telcos use their competition with the telcos. Having shed recognition. The telcos steer their custom-
understanding of customer demands to their network responsibilities, telcos directly ers’ connectivity by switching between
approach clients on the most appropriate engage in customer sales and also fulfill networks according to time, place, capacity,
channel and supply them with innovative, their role as an intermediary between OTTs, and use case.
tailored products. tech-companies, and other players on the
one hand and customers on the other, Telcos can thus significantly reduce the
by offering open platforms that connect number of client-facing service agents;
different devices and services. As virtual nevertheless, customer service is often out-
operators, telcos have their own platform sourced to third-party providers who can
environment in which they can easily inte- offer leading-edge solutions. The telcos are
grate offerings from their various partners in a customer-facing position and obtain
with a variety of services such as banking, insights into network issues, but detailed
media, or smart home connectivity. These problem analysis and troubleshooting are
cloud-based platforms are open for exter- conducted by network operators.
nal developers to increase attractiveness
30
To be or not to be |
The future of the telco business model
31
Scenario 4:
A vendor brand
32
To be or not to be |
The future of the telco business model
33
Taking the long view
American management author John C. Having developed their future aspiration
Maxwell said “Change is inevitable. Growth and identity, telcos need to define which
is optional”. However, for telcos, it is not business model helps to monetize this idea
only growth that is called into question, best. This requires companies to shape
based on current trends taking place but their operational excellence and allocate
also the entire business model. their investments to enable success.
To grow, and even more importantly, to sur- Despite all these questions, there are some
vive, telcos need to define for themselves ‘no regret’ moves telcos can easily execute:
which role they want to occupy.
Do they want to be the holder of the net-
work infrastructure and customer relation-
ships at the same time or would they rather
focus on one of those two domains in order
to maximize shareholder value?
Develop virtual plat-
forms that are open
to external developers
and partners as well Strengthen their position as
as implement new and appealing employer, while
innovative offerings updating the required skillset
of their workforce in an ongo-
Continuously participate ing process to attract and
in regulatory discussion by retain the best talent in the
active lobbying since con- market
nectivity will be seen as a
low-involvement commodity
in future
34
To be or not to be |
The future of the telco business model
35
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The future of the telco business model
Methodology
The methodology of this study is based Fig. 6 – Center for the Long View Scenario Methodology
on the proven scenario approach first
employed by Shell, and then perfected by
Monitor Deloitte. A seven-step scenario
7
development approach (see figure 6)
applies the guiding scientific principles of Monitoring 1 Focal Question
objectivity, reliability, and validity. The study
is the outcome of a series of interviews,
questionnaires, and workshops involving
TMT experts from the Deloitte EMEA
network and industry professionals as well
as experienced scenario practitioners from
Monitor Deloitte’s Center for the Long View 6 Implications
Seven Step 2 Driving
& Options Forces
(CLV). Scenario
Development
Approach
Scenario design starts by identifying the
focal question of the underlying issue. Since
we could tell an infinite number of different
3
stories about the future of the telco indus-
try, we first had to agree on the issue or 5 Scenario Critical
Uncertainties
strategic challenge we wanted to address. Narratives
Special thanks to Daniel Glaser and Andreas Schühly for their contribution.
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To be or not to be |
The future of the telco business model
39
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Issue 07/2017