, APAC

Asian Telecom operators risk 5G opportunities on failure to adopt ‘big tech mindset’: analysts

Darren Yong, Joongshik Wang, and Michinori Sato are part of this year's elite panel of judges at the 2022 Asian Telecom Awards.

As Asia’s telecom operators roll out 5G services, there is a glaring gap between their role as a carrier of data and voice and their need to evolve to deliver the next generation of tech ecosystems. This was the consensus of the region’s top telecom experts, with Michinori Sato, leader of Deloitte's Asia Pacific Telecom, Media, and Entertainment Sector, arguing that for telcos to shift to digital technologies, there are major challenges in terms of corporate culture and human resources. 

Certain company departments have become more customer-oriented after many years of marketing and CRM activities, but providing services to users encompasses the network infrastructure, sales, customer service, and several other business units. The difference in the degree of customer orientation between these departments often has a negative effect.

“Changing the mindset in telecom companies is a pressing issue. One of the biggest roadblocks facing telcos in their digital transformation journey is the entrenched corporate-centric mindset,” commented Joongshik Wang, managing partner of EY Parthenon and Technology, Media and Entertainment, and Telecommunications market segment for ASEAN.

As internal business operations increasingly become digitalised, Deloitte’s Sato said that telecom carriers today must collaborate with companies in other industries—and they cannot get away without strengthening the digital capabilities of their employees. “It is difficult to address this challenge only through in-house recruitment and training. A more effective approach will be for telecommunications carriers to grasp this challenge from a broad perspective and effectively implement measures together with society,” he said.

Telcos and operators who are able to exemplary address these challenges and are successfully making the digital transition will be revealed at the 2022 Asian Telecom Awards.

Darren Yong, Asia Pacific Head of Technology, Media, and Telecommunications at KPMG in Singapore, agreed, saying: “Given there is not the luxury to start from scratch, they need to evolve their way of working into organisations that can develop new products, make decisions, and innovate at the same speed as a tech company. This change also requires a shift internally around the future skills and capabilities that the company needs as they look at being more data-driven to provide real-time insights and opportunities.”

Building a digital ecosystem

Yong said that with technologies such as 5G, IoT, and the connected home, the need for a telecom company to operate more like a technology company has resulted in many telcos moving into adjacent spaces such as banking, insurance, health, and other platforms.

Deloitte’s Sato said that building a digital ecosystem around itself, or one where it is one of the core players, and engaging its users are very important points. How it positions the financial and payment functions will also have a significant impact on its future customer retention and acquisition in any country, even as the positions of telcos, OTT players, and popular digital ecosystems differ from country to country. 

A carrier with financial and payment capabilities, like Singapore’s Singtel Dash and the Philippines’ Globe G-Cash, will obtain overwhelmingly more information about its users, and with effective digital ecosystem design, receive payments from users for their digital lives.

Telcos are struggling to create these new digital businesses because they are focused on their old businesses. According to an EY survey, companies that are preoccupied with housekeeping issues, such as data consistency or legacy system problems, are struggling to generate returns. On the other hand, leading companies are prioritising investments in digital capabilities in areas that will enable them to monetise existing assets.

Other trends and opportunities

Other future challenges for Asia’s telcos will be in the breaking technology areas such as the metaverse and NFTs. Sato noted that the presence of the virtual space including games will also expand. “What parts of the ecosystem that comprises the virtual space will the telecommunications carriers occupy? There is a wide range of strategic options, from infrastructure that supports high-speed communications to metaverse platforms to content design to business operations within the virtual space, but the competition amongst operators will also accelerate,” he said.

One of the most promising options is to develop businesses that incorporate elements related to user experience, living and business spaces, and the construction of economic infrastructure in virtual space, such as metaverse/XR, NFT, and gamification. “For example, social tipping is getting more popular amongst people on SNS live performance, professional sports teams are adopting NFT for fan engagement, and so on,” EY’s Wang said.

“We also see ESG trends linked to the environment and carbon goals gaining more prominence. In a world where data will continue to grow exponentially, the need for energy to cool the data centres that store this data will continue to increase. Telecom companies, as one of the biggest users of energy, will need to act more socially responsible to ensure that they are adequately positioned to address their direct impact on the environment,” added Yong.

Darren Yong, Joongshik Wang, and Michinori Sato are part of this year's elite panel of judges at the 2022 Asian Telecom Awards, which recognises the best carriers in Asia. For more information please contact the Asian Telecom Awards secretariat on  +6531581386 ext. 217.

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