Unlocking the digital opportunities in the 5G era

Telecom Asia Special Project Team
12 Sep 2018

We are now at a dynamic period of transition in the technology industry. The digital revolution has thus far connected people to people. Moving forward, many new applications for technology will emerge and drive further change. This is the beginning of an explosion in digital technology that is inseparable from Information Communication Technology (ICT).

ICT is going to transition from a supporting role to a primary role in business. The IT systems at the majority of companies today are simply supporting systems. They are auxiliary technologies. But as this wave of digitalization unfolds, decision-making will be done in real time with the help of big data and artificial intelligence technologies. Operations will become simplified, more efficient, and more intelligent.

By integrating ICT digital technology into each industry, it is possible to help enterprises improve user experience from the ground up, improve productivity and operating efficiency, and innovate with new digital services.

That’s why the ICT industry, which provides infrastructure and basic services, is transitioning from a vertical industry into a horizontal platform industry –all industries, including the telecoms industry, need to go digital, says Dr Liang Hua (pictured), chairman of Huawei.

Digital technology is going to drive the horizontal growth of all industries over the next two decades, and many boundaries are going to be blurred.

In the telecoms industry, which is no stranger to digital transformation, there are two types of digital transformation underway.

“The first involves changing and expanding industry models that have already been scaled,” Liang explains. “The second involves incubating new digital business models and driving them to scale. These two types of digitalization can both create business value.”

The challenge for the first type of digitalization is primarily about how to effectively scale the application of an end-to-end ROADS (Real-time, On-demand, All-online, DIY, and Social) user experience. A stronger bond can be built with users through better products and service experiences. In order to realize such a user experience, restructuring of O&M and ICT infrastructure in the telecoms industry must be achieved through digitalization. This will make operations more agile and responsive.

5G unlocks new digital opportunities

In the 5G era, the telecom industry will provide a series of new digital services to individuals, homes, governments, and enterprises. These digital services and the accompanying new business models are what comprise the second type of digitalization.

Already there are some leading operators providing digital services over their 4G networks and reaping the benefits of these services, which contribute nearly 30% of their total revenue, Liang says.

“In the 4G era, digital services are optional for telecoms operators. But in the 5G era where everything is on the cloud, digital services are not optional –they're a must,” he notes.

By 2025, digital services will contribute more than 20% of operators’ revenues, he says, adding that operators need go digital and shift towards “intelligent operations”, so they will be able to deliver digital services to every person, home and organization.

User experience – the heart of digital transformation

Liang further notes that digital transformation is an ongoing process and operators should always put user experience at the heart of each digital transformation project,

“User experience should guide and drive digital transformation,” he says.

To start with, operators need to develop a “self-reinforcing model” that takes business goals, user experience, services, and supporting infrastructure into consideration.

Second, business operations need to become more data-driven, and use digital technology to make business more automated and intelligent. These changes will improve efficiency, and economically scale an outstanding user experience.

Third is the building of a team with digital capabilities and talent. And this is quite a challenge for operators, Liang notes.

“Over the past two years, I have found that almost every operator and enterprise is facing major challenges with transformation of culture, talent, and skills,” he says.

To meet these challenges, Liang says operators need to actively tap into experts both inside and outside their organization and establish robust systems for sharing and collaboration. The right HR policies and enablement systems are also needed to truly upskill talent.

“It’s important to have an open platform for all industry players and developers to collaborate. Cloud technology can integrate the ecosystem and crowdsource resources, enabling ongoing innovation and scaled applications of new businesses and new business models,” Liang notes.

Think big, starts small and scale fast

Given digital transformation is a gradual process rather than something that can be achieved overnight, Liang says it’s important for operators to keep an eye on the bigger picture and formulate strategies and approaches that help to clarify long-term goals and direction.

Then operators need to identify points of breakthrough and to take action, he adds.

“In many cases, it's impossible to plan everything in advance – you simply have to act, he says.

“The smaller steps the better. The simple things need to be done right, and be done well. Once you get those early wins, you can then start to look at more complex matters and bigger actions.”

“You have to choose a domain that looks promising where you think they can succeed. You might succeed or you might not, but through that process you will accumulate experience and gradually address issues related to people, teams, and organizations,” Liang concludes.

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