How telcos can future proof against convergence risks

Muhammed Omar, ServiceNow's Africa Country Manager.

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Telecommunications companies are the bridge to digital services. When we use an app on our phones, browse a website on our laptops or tap our cards at a supermarket, telco companies make that transaction happen in the background.

Consequently, the best telcos must keep investing to stay in step with digital progress, says Elie Abouatme, ServiceNow’s Head of Telco Industry Go-to-Market in EMEA.

“I once asked the CTIO of a major telco about the key to their success. Their response was insightful: during economic slowdowns, many telcos pull back on investments, but that’s the biggest mistake. To stay ahead and deliver value, continuous investment is essential, even in challenging times.”

Telcos are elaborate and technical businesses. They invest in infrastructure and sell handsets and related services. They expand into other business areas, such as mobile payments and fintech products, and build partnerships with other digital companies, such as e-commerce platforms. It's a sector that requires continued and aggressive investment to remain profitable, flexible and relevant, driven by the demands of a digital society.

"Telecommunication and connectivity businesses cannot take their feet off the pedal," says ServiceNow's Africa Country Manager, Muhammed Omar. "But that doesn't mean they race ahead blindly. They want to keep ahead with smart and informed decisions and consolidated services to keep generating value. That's difficult to achieve in such complex organisations."

Telco complexity has been topical for decades. During the 90s, the sector digitised away from its analogue origins. Broadband and digital enhancements such as voice over IP arrived in the early 2000s. Integrated services, new connectivity generations and shifts from telco to IT-centric tech-co business models followed in subsequent years.

Mobile money, virtual operators, 5G… there are always new opportunities for telcos, providing they continue to invest strategically. But complexity and technical debt get in the way.

"Telecommunication companies are often 30, 40, 50 years old, or often older," says Abouatme. "They rely on different modern and legacy systems accrued over the years, each with their own purposes and requirements. This is what telco convergence represents today – bringing very different technologies together without breaking things."

The concept of telco convergence continues to morph as the sector evolves. Today, it represents how telcos consolidate their wayward technology estates, solving the fragmentation of systems that don't speak the same language.

This fragmentation occurs in different forms, such as the tension caused by legacy systems and technical debt. However, data is currently adding the most pressure to telco change agendas. Data can be a unifier between systems, establishing a common language between the business and its innovation investments. The challenge is converging data when you cannot realistically converge all the underlying systems.

Digital workflow platforms provide an answer. For about as long as telcos have wrestled with convergence challenges, service platforms faced similar issues: how can companies manage and control their different systems to ensure uptime and continued delivery?

This challenge has defined the service management market, leading to a revolutionary approach: let a platform act as the convergence layer. A service platform can layer agnostically over multiple systems, gathering their output and channelling these through the platform's processes, designed by staff using low code/no code tools and services specifically designed for telco operations.

"Platforms add a lot of value to big companies," says Abouatme. "They address declining profitability created by heavy capex investments and technical debt. The way to get out of that decline is to enhance efficiency and productivity, expand automation, and unify the data from operational systems."

By design, a service platform communicates with different unrelated systems, collecting information in a single data format shared upstream and downstream. The new generation of these platforms is evolving beyond service management into company-wide consolidators. They provide vertical-specific solutions that integrate with a telco's old and new systems, virtually consolidating them without causing disturbances.

"The biggest risk with telco convergence is that they can break a lot of stuff in the process," says Omar. "When they use a service platform, that risk shifts to the platform. But there is considerably less technical debt and modernisation risk because the platform is designed to keep evolving and adding new features."

The best telcos want to keep investing while managing convergence risks, prompting both incumbents and virtual networks to make service platforms the mediators of their virtual consolidations.

"Convergence through platforms is a successful strategy, so much so that we've co-developed specific platform features with our largest telco customers," says Abouatme. "The risk transfers to the platform, and the business gets a single data standard, stack-wide visibility and processes that plug into all parts of the business for better efficiency and innovation. They can keep investing even during downturns and become future proof."