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  • Fast arrival of new technologies

Fast arrival of new technologies

The speed of disruptive new technologies seems to be increasing. In the last five years, blockchain, mobile payments, Internet of Things, cloud computing, autonomous vehicles and the future 5G networks have each represented new possibilities – and risks – for telecoms.

Perhaps due to this, 68.5% of telecoms taking part in the 2018 BDO Telecom Risk Factor Survey see the fast arrival of new technologies as a risk. In 2016, 55% of telecoms surveyed identified it as a risk, while the number had climbed to 72% in 2017.

Although dropping slightly from last year, it remains an indication of the increased pressure that the speed of technological innovation puts on large companies, such as telecoms. As new technologies continue to arrive, businesses that seek to remain relevant must leverage their transformative nature to create new revenue streams. However, complex, international and multi-layered organisational structures are part of the challenge that needs to be overcome. Multi-layered structures may help ensure telecoms make the right decisions when it comes to what technologies to integrate and develop. Likely a contributing factor to just 25.9% of survey respondents identifying ‘incorrect decisions on which technologies to adopt’ as a risk. However, it also lowers the speed with which decisions regarding technology can be made.

Telecoms companies are well underway with their digital transformation, but it is perhaps a transformation towards continuous flexibility rather than a new long-term business foundation. One built on a proactive approach to integrating new technologies and creating shorter innovation cycles.

Making good use of existing data is another crucial area for telecoms to address. Many companies in the space have large repositories of data about their customers, but many have so far struggled to take full advantage of its potential. Sensitive data also comes with its own challenges, with 61.1% of telecoms seeing ‘maintaining data privacy’ as a risk.

The speed of new technologies is most acutely felt in the Americas where 93.8% of all telecoms companies view it as a risk. The figure is 59.4% for EMAE and 50% for the Asia-Pacific region.

Quote/viewpoint:

“Cross-industry partnerships and increased connectivity present telecoms with a lot of new opportunities. Companies in the space have already accumulated a lot of the types of data that is the lifeblood for many of new technologies and services. At the same time, new technologies highlight the uncomfortable conundrum that many telecoms find themselves confronted with: How to create and foster innovation and fast roll-out of new services while maintaining revenue and stability in big organisations.

The risks associated with new technologies continue to be highlighted in BDO’s risk surveys. However, the drop in perceived risks could be a sign that telecoms companies are succeeding with changing their organisational infrastructure to be better able to adapt to new technologies. The question remains how they will adjust to the falling average revenue per customer which is a direct consequence of said new technologies.”

Aftab Jamil, Leader of BDO’s Global Technology team