5G and IoT lead telco transformation drive, while AI and automation use cases are yet to mature

5G and IoT lead telco transformation drive, while AI and automation use cases are yet to mature

  • 69% of telco leaders say 5G and IoT will lead digital transformation drive
  • Only 44% see network performance as a critical use case for AI and automation
  • 67% believe talent is the biggest obstacle to analytics and AI deployment

Telco leaders are optimistic about the promise of digital transformation, but there is a lack of synergy in the application of emerging technologies at the network layer.

That is according to a global EY report, Accelerating the intelligent enterprise, which includes analysis of 27 leading telcos about their digital transformation journey.

5G and the Internet of Things (IoT) are considered the most important emerging technologies in driving digital transformation over the coming five years according to 69% of respondents, followed by automation (62%) and AI (58%). However, telcos’ current use of digital technologies is heavily weighted toward customer-related rather than network-related gains.

Nearly half (48%) say improving customer support is the main catalyst for adopting automation, while 96% say customer experience is the main driver for analytics and AI use cases over the next five years. Only 44% see network-related use cases as critical during the same timeframe.

EY chart: emerging-technologies supporting telco digital transformation

Tom Loozen, EY Global Telecommunications Sector Leader, says:

“While the network accounts for the lion’s share of industry investment and operational expenditure, telcos continue to focus the power of emerging technology around the customer. It is now critical that they take a holistic approach to the adoption of AI and automation by shifting their investment priorities and applying greater focus to use cases in less advanced areas like networks.”

The report finds that the current approach to emerging technology adoption is out of sync with telcos’ long-term ambitions. Seventy-six percent say IT and the network are most likely to benefit from improved analytics or AI capabilities over the next five years, despite their reluctance to move beyond customer applications. This disconnect is echoed by the views of nearly half (46%) of respondents, who believe that a lack of long-term planning is the biggest obstacle to maximizing the use of automation.

Inadequate talent and skills is also cited as a key barrier to deploying analytics and AI, according to 67% of global industry leaders surveyed, while a third (33%) cite poor quality data.

Loozen says:

“Migration to 5G networks and the rise of the Internet of Things means the pace of evolution across the telecoms industry is rapidly accelerating. Operators have no choice but to transform if they are to remain relevant to consumer and enterprise customers, and achieve growth. To succeed in this environment, they need to take a long-term view of emerging technology deployment and create a more cohesive workforce that thinks and collaborates across organizational barriers.”

The imperative for telcos to be bolder in their approach to digital transformation and innovation is highlighted throughout the report. Nearly all respondents (92%) admit they need to be more agile to realize transformation gains, while 81% agree that they should adopt a more experimental mindset to maximize the value of analytics and automation. As the choice of emerging technologies and processes continues to widen, most respondents (88%) also believe that their organization requires a better grasp of interrelated digital transformation concepts.

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