5G, IoT to lead digital transformation in the next 5 years

Telco current use of digital technologies is heavily weighted toward customer-related rather than network-related gains


5Gthe next generation of cellular network technology — and the Internet of Things (IoT) are expected to be the most important emerging technologies in driving digital transformation over the coming five years, according to a report by Ernst & Young (EY).

Its global telecommunications sector leader Tom Loozen said while network accounts for the lion’s share of industry investment and operational expenditure, telecommunications companies (telcos) continue to focus the power of emerging technology around the customer.

This was based on responses from senior industry executives who participated in the study conducted by EY.

“About 69% of respondents think that 5G and IoT are going to be the key tools to drive the digital transformation, followed by automation (62%) and artificial intelligence (AI) (58%).

“Nearly half (48%) say improving customer support is the main catalyst for adopting automation, while 96% say customer experience is the main driver for analytics and AI use cases over the next five years,” he said in a recent statement.

Only 44% of respondents see network-related use cases as critical during the same timeframe.

However, telco current use of digital technologies is heavily weighted toward customer-related rather than network-related gains.

It is now critical for telcos to take a holistic approach to the adoption of AI and automation by shifting their investment priorities and applying greater focus to use cases in less advanced areas like networks, Loozen added.

Migration to 5G networks and the rise of IoT means the pace of evolution across the telecoms industry is rapidly accelerating.

“Operators have no choice but to transform if they are to remain relevant to consumers and enterprise customers and achieve growth.

“To succeed in this environment, they need to take a longterm view of emerging technology deployment and create a more cohesive workforce that thinks and collaborates across organisational barriers,” he added.

The report also found the current approach to emerging technology adoption does not match telcos long term ambitions.

Seventy-six percent of respondents have stated information technology and the network are most likely to benefit from improved analytics or AI capabilities, despite their reluctance to move beyond customer applications.

This disconnect is echoed by the views of nearly half (46%) of respondents, who believe that a lack of long-term planning is the biggest obstacle to maximising the use of automation.

Inadequate talent and skills are also cited as a key barrier to deploying analytics and AI, according to 67% of global industry leaders surveyed, while a third (33%) cite poor quality data.

Going forward, it is imperative for telcos to be bolder in their approach to digital transformation and innovation.

Almost all respondents (92%) admit they need to be more agile to realise transformation gains, while 81% agree they should adopt a more experimental mindset to maximise the value of analytics and automation.

As the choice of emerging technologies and processes continues to widen, 88% of participants also believe their organisation requires a better grasp of interrelated digital transformation concepts.

Hence, the Malaysian telecommunications industry is urged to transform to remain relevant to consumer and enterprise customers.