Latin American Telcos Still Face Many Trials on The Road to Digital

Latin American telcos may be on the right path to becoming fully digital, but that path is still a long and challenging one. During the last few years, a …

latin american telcos

Latin American telcos may be on the right path to becoming fully digital, but that path is still a long and challenging one.

During the last few years, a large number of telcos have established dedicated digital business units to tap into digital services opportunities that have arisen from changing consumer lifestyles and needs.

These Latin American telcos are investing in cloud, big data, security, and connectivity, with the objective of becoming digital telcos. Operators are expecting this strategy to create new revenue streams and help offset the decline and stagnancy in core revenues.

Broad portfolios, sales reach, and capillary infrastructures are differential assets to capture the digital opportunity. As a result, telcos are also shifting from selling connectivity to providing data products.

All of these approaches are positive, as they direct Latin American telcos towards the digital end zone, but what about the areas they still need to improve?

Experience Adjustments

The main elements of digital transformation that Latin American telcos are currently working on are self-service, agile IT, and vertical solutions.

In Brazil, operators like Oi, Vivo, and TIM have launched alternative 100% digital channels to begin the journey of self-service, but they still need to improve the experience. Their physical, virtual, and logical resources need to be managed in order to achieve this digital transformation.

Furthermore, traditional networks and network function virtualization (NFV) need orchestration regarding business support systems (BSS) and operational support systems (OSS). Moreover, telcos’ physical and virtual multivendor elements need interoperability.

Latin American operators are still starting the journey, but structure simplification and NFV/software-defined networking (SDN) are on the agenda of the largest operators. Communication service providers (CSPs) are also seeking opportunities to provide new services and business solutions for verticals.

Diversification Challenges

The challenge for a telecommunications service provider is to diversify several other services. Vodafone and AT&T have successfully managed to do so and are featured globally. In Latin America, the telco that stands out the most in this regard is Telefonica.

Sign up for our Nearshore Americas newsletter:

As the market matures, investment in technology and portfolio simplification, channels, and automation can reduce complexity and increase value for telcos. Information Technology (IT) opens up new revenue streams through advanced billing and increases customer satisfaction through better customer relationship management (CRM).

CSPs are having difficulties crossing the chasm between a fragmented ecosystem with a cost opportunity business model and selling connectivity for an ecosystem of partners, no one manages to cover all businesses, as well as sell solutions and services.

These challenges are organizational, since data management, security and privacy, and interoperability are evolving fast into big data frameworks, managed security services, and standardization.

The Customer-centric Approach

The managed CSP operations services are growing from managed network operations centers (NOC), field operations, configuration management, operations, and monetization software as they evolve into IT infrastructure management, cloud infrastructure management, cloud infrastructure and connectivity management, service operations center (SOC) and small cell operations.

Next-generation networks (NFV/SDN), managed M2M, and customer experience centers are also emerging in the telecommunications market.

Therefore, since telco revenues are being affected by changes in market dynamics, they need to focus on becoming customer-centric organizations, as well as investing in new products and services, aiming to transform its cost base, and simplify and digitize complex business models, processes and systems.

Ultimately, the structure of telcos in Latin America needs to be more agile and flexible while they leverage an interconnected ecosystem to adapt to this new era.

Tags

JOIN THE CONVERSATION

JOIN THE CONVERSATION