Telcos are a vital element of today's society. Amid the COVID-19 crisis our need for reliable communications has only been further enhanced; providing critical support to our healthcare system, as well as enabling social distancing for millions of individuals.
We have previously talked about how COVID-19 has driven organisations from all sectors to utilise technology to digitally transform. This perspective will now focus on how telcos are enabling this and what the immediate and long term impacts will be.
The crisis has put telcos under the spotlight, as they need to maintain their networks to support healthcare and emergency services, enable remote business models and home working, while also keeping people connected and entertained. They have had to do this all while going through their own rapid transformation to remote working and supporting models. Below we reflect on the immediate responses and assess how these will go on to shape future trends.
What has been the immediate response?
Following the outbreak of the COVID-19 pandemic, organisations have had to make immediate changes to the way they operate, both in terms of their staff, ways of working and offerings to the customer. Historically, telcos have tended to be slow to react to change, as the UK fibre rollout lag demonstrates. However, this crisis has demonstrated telcos are able to react at pace and implement a number of changes rapidly on multiple fronts.
As a result of the lockdown, most people are now working and socialising from home. This has resulted in increased demand on networks, with broadband usage increasing more than 50% and Vodafone reporting mobile traffic increasing 56%. Providers have had to quickly adapt to ensure their services levels with the traffic increase, while also changing their business and support models, moving to distributed cloud based call centres and 1st line support for example. This has effectively been digital transformation on steroids, which previously people thought would take years not days to complete!
In addition, telcos have also had to respond to other impacts and consider the greater good. All major telco networks have provided free access to healthcare related websites, increased data allowances and BT and Sky have frozen subscriptions for sports channels. Providers have also worked with OTT providers to manage traffic loads, as for example Netflix has agreed to reduce the quality of its streaming service to enable internet infrastructure to cope with the increased traffic. As all stores are closed, EE are allowing customers to book call back appointments with a local store worker to provide support and get advice. We have also seen telcos providing new essential public services, like the text messages that were sent to UK citizens to inform them about the lockdown. There is still more to be seen in this space over coming weeks, as telcos will be involved in the development of a contact-tracking apps to monitor the spread of the disease and will work with tech business like Zoom to tackle safety and privacy issues.
The way in which organisations respond now and how they continue to adapt to the rapidly changing environment is likely to determine their longer term success. Customers are keeping a watchful eye on how organisations respond and there is significant risk for those that get it wrong, while the rewards around brand perception and loyalty will be reaped in the future for those that manage to adapt. To date telcos in the UK have done well, but any major outages or network issues could do real and lasting damage, as they are fully aware.
What will remain and change?
Above we considered some of the key immediate changes made to manage the crisis, which have demonstrated organisational agility and pace. Post COVID-19, there is likely to be a new norm, as organisations will learn lessons from their immediate response and build their successes into their new operating models, ways of working and customer offerings.
While some changes are temporary, the removal of data caps and the closure of stores for example, most of the changes will hold to a varying degree. As we phase out of the crisis, telcos will need to carefully consider, for both their customers and their organisation, what remains and what to transition back – for example are virtual call centres retained, how many people continue to work from home and how much travel is really needed to get business done.
Organisations will need to go through a learning exercise of assessing which changes have been successful and should continue to be used in some form. The key is for telcos to lead in this assessment, whether it is for their own business or their customers. The key themes for telcos to consider are technology and digital transformation, operational improvement & efficiency, risk and regulation.
In addition to considering what will remain post COVID-19, telcos will need to consider what needs to change post crisis. This will cover a wide range of topics, including regulation, security, supply chains and business continuity planning.
From a regulatory perspective, not all telco networks are classified as ‘critical national infrastructure’ and post COVID-19 we feel it should be. A review is required as both the mobile and fixed network enables healthcare, emergency services, government communication with citizens, home working and social interaction in lockdown. In the future it could enable contact tracing and disease monitoring/management. This all needs careful consideration alongside data security and privacy regulation.
Telco supply chains will also need to be transformed. Like main industries, telco supply chains are global and based on ‘Just-in-Time’ models. Future supply chain models will need to consider whether a regional supply chain model is required with some stock piling of critical equipment. While there won’t be a complete reverse of the global trend, we do expect change and resilience to be built into supply chains – cost & efficiency will need to be balanced against resilience.
Related to the supply chain review, telcos will also need to review their business continuity plans and response. While we have seen telcos successfully implement their business continuity plans, COVID-19 has tested previous thinking and planning. For example, the idea that you have resilience through operational offices in different geographies no longer holds – all regions were impacted by COVID-19. Business Continuity plans will need to be reviewed and re-written.
As telcos look to build agile responses with technology and operational efficiency during turbulent times, they should consider Agile, DevOps and ITIL 4, which together can provide an operational framework for governments and businesses to manage their operations efficiently both in BAU and crisis modes. We believe the ITIL 4 framework, and its integration with Agile and DevOps methodologies, will be adopted more widely for operational teams to effectively review environmental changes and respond at pace to deliver business continuity and value to customers.
And what is the longer-term impact?
Predicting the longer term impact of COVID-19 in detail is challenging if not impossible. However, what we can say with confidence is digitalisation will only speed-up, and network data demand will increase more rapidly. Digitalisation of telecommunications, was expected to unlock $2 trillion of value over the next decade, which could now be expedited by the longer term impacts of COVID-19. We think facilitating the digital workplace will become an increasing area of focus for organisations across all sectors, including telco’s as a result of some organisations seeing an increase in productivity due to virtual working.
This will inevitably lead to infrastructure expansion needing to go even faster, supply chains changing, and data security and regulatory reform. Leaders of telco organisations will need to ensure they are ready to adapt to these changes as they start to plan the exit of COVID-19, alongside investing in infrastructure, improving technology and adopting new ways of working.
In the era of Full Fibre and 5G, operators may now see the need to invest even more in their infrastructure to maintain a competitive edge, by expanding coverage and improving the speed and volume of data flow to meet increased demand. They will need to do this while ensuring strict and changing security and data privacy rules are adhered to. There is also a great opportunity here for telcos to get more involved in digitalisation and avoid just becoming a utility.
This means telcos need to focus on technology, operational improvement, risk and regulation.
To do this they will need enterprise agility, to explore, embed, and execute change at speed and with scale. By adopting frameworks such as Agile, DevOps and ITIL 4, while embedding the use of data, AI and automation, organisations can drive change and operational excellence, enabling effective responses to business continuity challenges in times of economic crisis.
The COVID-19 crisis has made us more reliant on telcos than ever before, as it has enabled people to continue to work and socialise safely. As we move forwards this will only become more so as digital transformation is accelerated. Also, the crisis has proven that all businesses, including telcos, can drive transformation far faster than they thought and the key to continued success will be to keep this mindset in the future and not reverting to the old way when we return to ‘normal ‘.
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Charis has significant experience in successfully delivering large-scale change and transformation projects.
Charis Nikolaidis Consultant
Sam is an experienced Manager at Moorhouse, having undertaken a number of roles that have allowed her to specialise in project and change management.
Sam Smith Manager
Prathieban is an experienced Manager with a focus on technology delivery.