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Arthur D. Little predicts telecom operators will reconfigure their operations to pursue new digital opportunities

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In its latest report on the telecommunications industry, Arthur D. Little (ADL) examines the major choices that operators face as digitalization continues to impact their businesses. Based on extensive original research and interviews with more than 100 industry executives from around the globe, “Major strategic choices ahead of TelCos: Reconfiguring for value,” outlines why the telecoms industry is set to become more diverse over the next five years.

The report predicts that revenues will stabilize, with even a slight growth outlook of 1.2% for eight major European countries. However, the B2B2x market – operating customers’ digital solutions – is forecast to account for 8% of global ICT spending by 2020 (up to US $276bn) yet remains an untapped opportunity for operators. With proven experience of operating diverse technical assets, telcos could gain market share from traditional IT players who have not yet gained the same level of efficiency, maturity and capability in operating such assets.

ADL also observes that operators’ production models are changing dramatically. With the need for better customer experience, ongoing innovation will drive networks and IT resources to become more flexible and accessible. As networks become software-driven, they will reach across borders and behave more like the software market. Operator groups will globalize their production models, while standalone operators will expand their footprint into new geographical territories based on increasingly elastic infrastructure assets.

Ultimately, the biggest market impact will come from the different types of operators that will emerge, with traditional telcos competing against asset-light players operating simple, customer-centric models.

Bela Virag, Partner at Arthur D. Little, said, “The digitalization of the telco industry has made possible a variety of strategic choices. Some will leverage synergies from globalized production models, while some will become exceptionally lean local players. Some will go asset-light, while others will remain asset heavy. Some will master the B2B2x opportunity, while others may ignore it altogether. It is these choices that operators face regarding their configuration that will drive them to be less look-alike than they are today.

“Ultimately, there are multiple forces that will drive operators to take on much greater design responsibility for their IT, network and services.”

To download the full report please click here www.adl.com/StrategicChoices

Contact information

For Arthur D. Little
Cate Bonthuys
Tel:+447746546773
cate@catalystcomms.co.uk

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