Digital Reinvention

The Digital Paradox: Reinventing the Companies Who Were the Foundation of the Digital Revolution

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Growing up, I had a front seat for the evolution of telecommunications.  My father worked for the traditional regulated “Bell Companies” and later in the cable and video parts of these businesses.

It was through him that I became interested with early video, entertainment, and gaming technologies.  We were early adopters of the VCR, CD player, and Apple IIe – technology that would later provide the content that continues to transform this industry.  Later, I would become fascinated about how telecommunications companies could provide video and entertainment content on their networks.  In fact, as an intern at the “phone company,” I was able to see the first tests of video over traditional networks using ADSL technology up close.  The point is, so much has evolved since those early days.

The industry I grew up loving is now in a great state of change.  These relics of technology are scattered along the path that leads to the devices that we rely on today.  As IBM prepares for Mobile World Congress (MWC), we have been meeting with telecommunications leaders discussing digital strategy and taking a closer look at what’s coming next.

Networks are being commoditized.  The video and content that captured my imagination is now given – and even expected – not just at home, but on your phone.  Now the definition of mobility is broadening.  The real opportunity for industry leadership goes beyond the device in your hand and its applications.  Mobility is now embedded in your car and wrapped around your wrist.  Data from more than 7 billion connected devices is providing companies with more insight than ever before about their customers and how they are using products and services.

The companies that built and enabled these digital connections now risk being turned into “dumb pipes” for others who are driving innovative solutions that use their networks.  Telecommunications and media companies are now competing with Google, Amazon, and Apple – brands where people often turn to first for innovative service.

As a result, leading telecommunications and media companies are looking for new business models to connect with their customersIn order to remain competitive, companies must step outside the comforts of making incremental moves. To address the drastic changes that are underway, organizations must digitally reinvent themselves, taking a comprehensive and holistic approach. This is how new leaders are born.

Here are three ways telecommunications and media companies can begin to reinvent themselves:

  1. Collaboration with Customers.  Telecoms should adjust their focus directly at the customer.  By analyzing customer insights, they will be able gather the intelligence to launch more relevant services.  Going one step further, telecoms can co-create products and solutions with their customers by crowdsourcing product ideas, exposing data sets on joint innovation platforms, and working directly with their customers to build applications that create greater loyalty to their networks and increase stickiness to the brand.
  2. Value from Data.  Another area where telecoms may be able to pivot is with their data.  As the transport layer connecting billions of Internet of Things (IoT) devices, telecoms have access to potentially valuable raw data.  By combining this data with other information from their partner ecosystems, and leveraging cognitive analytics, telecom leaders can envision value-added services that help them create new markets and revenue streams.  They can evolve from traditional companies to analytics and data driven organizations – like The Weather Company which combined usage, location, and mobile weather station data from its mobile application to create one of the world’s largest cloud and analytics platforms for business decision support.
  3. Explore Digital Markets.  Gone are the days of just provisioning network capacity and providing voice and data services.  Telecoms need to continue to expand and explore starting new, digital businesses.  There are opportunities in online and mobile content delivery and offering new platforms that run on their networks and supported devices – such as the mobile payment platforms emerging in developing countries.  Telecoms can also leverage their connectivity to monitor, control, and extract insights from emerging IoT solutions like connected homes and cars.

The old adage, “this is not your fathers” telco has never been more appropriate.  As we look at opportunities for industry disruption that lie ahead, I look back fondly at the early innovations in telecommunications that started us on this transformative path.

Associate Partner, Global iX

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