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How the Pandemic Rapidly Transformed the Slow-Moving Telco Industry

Like so many industries, those focused on telecommunications had to adapt -- and quickly -- to changing circumstances and consumer expectations.

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At the onset of the Covid-19, telcos in Europe were consolidating, shoring up their assets in the years leading up to the pandemic and investing boatloads of cash into . Yet investors found little to no value in their stock or company valuations, as Financial Times reported. They had expected the remote world to boost their revenues and bring them the riches of El Dorado, but the expectation did not manifest as anticipated. Instead, consumers, who became fastidious savers, expected more services for the same buck they had been giving to telcos before the pandemic struck. The new demands forced telcos to readapt to the new reality, and it forced them to digitally transform even more rapidly.

"Digital transformation" is a phrase that's been used across many industries to describe the shift from more obsolete technologies and methods to more advanced, digital ones that empower companies to cut costs and improve the customer experience. It became especially relevant during the onset of the pandemic, as customers suddenly needed more remote access to the same services they could access before the pandemic and better connectivity for their remote-working lifestyles, and telcos needed to better market products with a diminished physical presence. 

Telcos quickly changed gears to ramp up customer support and make technical arrangements. But to achieve rampant and rapid digitization, they looked around the telecoms sector for solutions, whether internally or externally.  Deloitte's Mark Casey and Craig Wigginton reported that telcos may even turn to acquisitions to support their transformation: "There may be renewed focus on -led M&A to secure differentiating assets, and, in some cases, opportunistic plays for innovative start-ups." From the forced transformation, new solutions emerged that fast forwarded the digital transformation process 5-10 years and set new standards in the telco industry that will last for years to come.

Related: Blockchain Use Cases for the Telecommunications Industry

Customer queries from the comfort of the couch

The storefront, once the most critical touchpoint for many customer queries, dissipated almost overnight during the lockdowns. Despite customer service and website self-help apps already existing and ready to roll, telcos had to ramp up these services in order to accommodate the changing landscape. Customer interactions like trade-ins, repairs and registrations — often done at in-store locations — needed to go fully digital. And digital they went if they weren't already. 

Twenty million customers of Dutch telco VEON were utilizing self-care apps at the start of the pandemic, and 240,000 additional Russian service subscribers downloaded the company's self-care app in April 2020, according to a Hubspot report. Omantel reinvented its self-service app to enable customers to securely apply for home internet and activate eSIM cards and wireless phone plans with face and fingerprint recognition tech. In the U.K., Vodafone onboarded mce Systems' AI-based app for self-grading mobile devices, enabling the carrier's customers to remotely execute trade-ins and the carrier to standardize the evaluation of its customers' smartphones.

Even when stores reopen, customers are expected to stick to their providers' digital self-care channels. Capgemini's research on consumer trends indicated customers' visits to shops for help and support were expected to drop from 34% to 29% in the early months of 2021. But it's the upgrades in the networks that will enable the long-term success of the remote consumer. 

Related: The Next Frontier For Telcos: Embracing Innovation Through Purpose-Led Value Propositions

5G full speed ahead

As telcos' anticipated revenue growth from increased demand fell way short of the mark, uncertainty set in initially about the deployment of 5G networks and the cost. Consumers, however, were unwavering, expecting real change in the face of a greater need for higher connectivity speed and capacity.

Yet despite the uncertainties that followed a disappointing second and third financial quarters of 2020, the new remote demands prompted telcos to speed up the rollout of 5G and invest more in the necessary infrastructure. A Wireless survey from July 2020 showed that overall 5G investment for 2020 was expected to total an estimated $8.13 billion, which would be a 96% growth from 2019 — largely attributed to a hot contest between telcos. 

Across the United States and Western Europe, competitors began racing to add 5G into their fold and offer customers better network service. Most recently, in Barcelona, Verizon unveiled its 5G-connected robotics as it works on providing its U.S. customers with 5G access. T-Mobile and AT&T are right there in tow. And competition is about to get heated with marketing expenditures going even more digital and competition for customers likely to get more pricey.

Related: What Is 5G? Everything You Need to Know.

Reaching the customers' hearts

Given that the telco industry became the crux of a connectivity-dependent world, its standing became stronger in the eyes of the consumer. But with a declining footfall, telcos will inevitably boost their budgets to target users and sell remotely. Up until the pandemic, they had been more focused on TV and radio, but the expectation is that the tide will turn to more digital ad spend.

Zenith Media's " Intelligence—Telecommunications" 2020 report in 12 major markets found that telecom brands spent 12% more on TV and radio ads than all other advertisers while spending 7% less than advertisers on digital media. Yet the report also indicated that telcos would grow their ad spend by nearly 5% in 2021 and just under 4.5% in 2022. By 2023, Zenith estimated that digital "will account for 54 per cent of all telecoms advertising" — a rather sizable boost for a sector largely focused on traditional media.

With younger generations expected to watch less traditional television and listen less to radio, telcos will likely adjust their strategy to adapt. And as newer social-media platforms emerge and older ones evolve, they will need to get more creative with their approach — especially with platforms like TikTok that appeal to a younger generation. 

Sometimes the most desperate of situations push companies to change, and the pandemic certainly provided an impetus for telcos. Only time will tell how well telcos have adapted. 

Ariel Shapira

Written By

Entrepreneur Leadership Network Contributor

Ariel Shapira is a father, entrepreneur, writer and speaker.