Telcos report falling confidence in digital transformation, yet 60% are trying it

Telcos report falling confidence in digital transformation, yet 60% are trying it

Telecoms operators’ confidence about successfully achieving digital transformation is plummeting – partly thanks to lack of management support.

A survey by TM Forum, a trade association focused on telecoms IT and digitisation, says only 11% of respondents to a survey are “very optimistic” about conducting successful transformations, compared with 22% in October 2017.

The TM Forum conducted its latest survey in the first quarter of 2018. The organisation published the details at its Digital Transformation World event, taking place in Nice this week.

Mark Newman, chief analyst at the TM Forum, said: “Our second digital transformation tracker shows that digital transformation extends well beyond technology itself, and increasingly we’re seeing concerns about organisational and cultural readiness.”

The organisation told delegates in Nice that increasing cultural and organisational obstacles are slowing down industry progress. It reported 42% of respondents saying there is a lack of clear aligned vision and goals in their companies, followed closely by 40% reporting cultural and organisational issues, and 37% saying there was a lack of top management support. These were “very serious” barriers to transformation, said the TM Forum.

Despite this, over 60% of respondents have already embarked on or are about to embark on digital transformation, says the report.

At the same time, telcos have different views about what they want to transform into. Less than 20% want to remain pure connectivity providers, while 16% want to become platform providers, and 30% want to be full digital service providers and another 36% partnership-led multi-play operators.

Yet only 30% of respondents thought their companies were resistant to change. Only 10% thought they were risk-taking and 11% thought they were agile and diverse.

The TM Forum sharply pointed out: “Without being clear on the direction and the necessary steps each company must take – whether in terms of increased efficiency or full-scale business model transformation – it is difficult to execute on transformation.”

“Any change is hard to implement, and [communications service providers] are no exception. Some identify that they are not risk takers, and making a leap of faith into unproven revenue streams is not easy,” said Newman.

“In order to ready themselves for successful digital transformation, operators must not only be able to articulate a clearly defined vision for their transformation projects, but critically they must communicate their vision throughout every level of their organisation.”

The survey included answers from 176 respondents from 105 telcos operating in 59 countries, and 91 respondents from 45 supplier companies. The full report is available from the TM Forum.

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