Telco innovation is everywhere. Across the globe, leading telcos are embracing digital disruption as they look to evolve into “technos” – operators with data-driven technology at the heart of their business models and customer propositions. Telecommunication innovation can be seen in everything from 5G connected hospitals, to digital post boxes, to digital advertising platforms, and much else besides.
And as is so often the case with digital transformation, innovation in the telecommunication industry extends beyond incremental change to transform the functions of telcos and their place in the digital world. Increasingly, telcos are becoming prime movers in digital ecosystems and central to the next phase of the global digital journey.
How can telcos thrive in this new era of innovation? What factors are required to ensure that telcos can innovate effectively and achieve the required growth? Novatiq believes that there are three enablers that are particularly important in driving telco innovation: partnerships, cloud platforms, and interoperability. Let’s look at each in turn.
One of the key trends for telcos today is to ensure growth by providing innovative tools and services to businesses and consumers in adjacent industries. From Verizon offering WiFi for connected cars to Jio’s smart home innovations, leading telecom innovators are branching into new sectors to reach new audiences with new solutions.
Partnerships are vital in this move. Telcos that can connect with the right industry insiders and collaborate on powerful solutions that draw on their respective strengths will thrive. In some cases, telcos will add value through connectivity, while in others they will add value using other assets. For instance, telcos can work with adtech partners to provide privacy first digital identifiers based on their network intelligence, an approach that will provide access to the lucrative digital advertising market.
The most innovative companies today rely on agility to get new services and products to market before competitors, and to meet new opportunities and customer demand rapidly. In fact, analysis from McKinsey suggests that 75% of cloud’s predicted value comes from boosting innovation. It’s little wonder therefore that telcos are forecast to spend $1 billion each on cloud network transformation.
Part of the power of the cloud comes from enabling a microservices architecture, whereby containerised, independent services connect through APIs (application programming interfaces). A microservices architecture enables telcos to adopt a DevOps approach to application innovation and to more rapidly and cost effectively scale new services. What’s more, as new technologies emerge, they can be rapidly and easily integrated into a telco’s systems, allowing them to stay at the cutting edge of technology.
At present there is a great deal of excitement being generated both in and outside the telco industry by the arrival of 5G. One of the key features of 5G is that it promises to enable interoperability at the application layer. That means external developers can more easily access operator networks to design innovations. This technical change will fuel telco innovation by broadening access to partner ecosystems and co-created services (see the partnership section above).
One example of how interoperability is being promoted at the application layer is the GSMA Open Gateway framework, which has published a set of common APIs designed to “provide universal access to operator networks for developers.”
However, APIs are not the only enabler of interoperability at the application layer. In some cases, such as with Novatiq’s own telco proposition, interoperability is about the services themselves. Here, partners that develop similar services need to ensure that they are based on standards to enable interoperability within the community that uses the services, even if the network application layer is differentiated.
Telcos are moving beyond their origins as voice and data providers and even later smart initiatives. Today, they are increasingly innovating at the cutting edge of the digital world, leveraging new partnerships and service architectures to offer something new. No more the laggards of the digital world, telcos are increasingly defining it.