Today, the telecommunication industry stands at a critical inflection point. Telecommunications firms (telcos) face structural challenges that demand fundamental transformation. While the options and opportunities are numerous, one thing is clear: Sticking with the same services and legacy monitoring tools is a recipe for failure, now and over the long term.

Here are just a few key factors that fueled the need for change:

  •     Revenues from core connectivity services are stagnating. Telcos’ traditional services, including voice, data, and cable television, have grown highly commoditized, with pricing under constant pressure. As a result, revenue per user is typically either flat or declining. These existing services remain vital, but they’re not sufficient to fuel or sustain a telco’s growth.
  •     Competition is intensifying. Increasingly, telcos are facing intensifying competition, not from incumbents, but from large cloud service providers, like Amazon, Google, and Microsoft. Every day it seems, these organizations are offering more services to enterprises, including cloud connectivity, edge computing, and network functions as a service. In the process, they’re beginning to cut telcos out of the value chain.
  •     Market demands are shifting. As enterprises and government agencies pursue their digital transformation initiatives, their needs are fundamentally changing. Today, teams in many organizations are seeking specific, industry-focused digital services and solutions. This is particularly true for businesses in industries like healthcare, finance, and manufacturing. Organizations need compliant, high-performance platforms that offer an end-to-end solution to their business problems.

In response to these changes, telcos need to transform, moving beyond their traditional role of communication service providers and instead become technology-enabled service providers. In short, they need to move from being telcos to technology companies (techcos).

Elements of the Telco-to-Techco Transformation

The telco-to-techco transformation is a broad and all-encompassing one. Here are a few of the aspects of this evolution:

  •     Digital transformation. Just like the enterprises they serve, telcos need to embrace digital transformation. For telcos, this means moving from being infrastructure managers to digital solution providers. To make this move and keep pace with rapid technological evolution, telcos need to modernize legacy systems, adopt cloud-native architectures and agile methodologies, and foster a culture of innovation.
  •     Diversification into tech services. Telcos should expand beyond their core business of providing connectivity and enter new areas, such as enterprise IT services, cloud computing, IoT, AI, and cyber security.
  •     Move to cloud and edge computing. The advancements delivered through the emergence of 5G networks, edge computing, and other innovations represent key enablers for telcos. For example, 5G enables telcos to establish new business models like network slicing, private networks, industry-specific, low-latency apps, and more.
  •     Partnerships and ecosystem plays. Many telcos will gain a range of advantages by collaborating with cloud providers, software companies, and other tech players. This enables firms to leverage complementary strengths.
  •     Customer experience and personalization. To compete with the large tech companies, telcos need to focus on improving customer experiences, particularly through enhanced personalization. This will place a premium on enhancing data analytics, which can play an integral role in the identification, optimization, and delivery of new, customer-centric service offerings.

Limitations of Traditional Monitoring

As telcos make the move to become techcos, traditional network monitoring simply doesn’t cut it anymore. These tools fall short in several arenas:

  •     Cloud-native infrastructure. As telcos pursue digital transformation, they’ll increasingly be leveraging approaches like cloud-native infrastructures. In these environments, network operations teams need deep visibility into containers, virtual machines, and APIs—but legacy monitoring tools weren’t built to provide these capabilities. This limitation stifles modernization efforts before they get started.
  •     AI and automation. Increasingly, telcos will be embedding AI and automation into operations. However, most teams are struggling with traditional tools that are scattered across various organizational and technological silos. These disparate tools offer limited, fragmented visibility that impedes the establishment of predictive operations.
  •     Partner ecosystems. As telcos expand their partnership ecosystem, such as with cloud providers, systems integrators, and enterprises in various industries, operations teams need to extend their visibility across organizational and technical boundaries, including domains operated by third parties. Without the required visibility, collaboration and co-innovation efforts are compromised, and telcos run the risk of falling short of their SLAs.
  •     New service offerings. Telcos will increasingly need to offer premium services, such as observability as a service. They’ll also have to provide differentiated SLAs, such as those based on actual user experience. Fundamentally, traditional tools lack the deep visibility needed to support these offerings.
  •     Industry-specific offerings. As telcos look to expand penetration with offerings tailored to organizations in specific industries, they must contend with added layers of complexity, such as industry-specific KPIs and distinct multi-tenancy requirements. Legacy monitoring tools can’t support the scale and complexity associated with these offerings. This limits the telco’s ability to boost differentiation and expand market share.
  •     Personalization. When it comes to personalization, user experience is everything. But teams in many telcos struggle to concretely, objectively measure what the user experience is actually like. This limited visibility leads to missed monetization opportunities and makes it harder to build loyalty.

To sum up, with legacy monitoring tools, modernization stalls, services underperform, and customer experience suffers.

Observability and Analytics: New Imperatives

To overcome all the obstacles outlined above, telcos need a modern observability platform built for hybrid, cloud-native, and customer-centric environments. Platforms must address the following requirements:

  •     Full-chain visibility. First, telcos need full-chain visibility across physical networks, virtual infrastructure, public and private cloud, and edge computing. This enables teams to gain end-to-end visibility, including across network paths that span internally managed and externally managed, third-party networks. This also helps ensure optimized service levels in increasingly complex, distributed environments.
  •     Real-time analytics, AI integration. Second, they need real-time analytics, powered by AI and machine learning. They must be able to seamlessly integrate with third-party vendors. This allows for predictive operations, closed-loop automation, and ecosystem-wide visibility, which are crucial for agile service delivery.
  •     Experience metrics. Third, observability must include not just monitoring data, but true experience metrics, like application response time or voice conferencing quality. This enables telcos to shift from monitoring network performance to ensuring optimized digital experiences.
  •     Multi-tenancy and industry support. Fourth, platforms must support multi-tenant and industry-specific views. This enables telcos to scale business-to-business services, address industry-specific KPIs, and provide self-service to customers.
  •     Flexible and deep integrations. Finally, observability should offer deep integrations with CRM systems, customer data platforms, and DevOps pipelines. This enables richer insights into a range of areas, including into customer preferences and requirements as well as tactics for optimizing operations. Data from different systems starts to flow together, enabling better personalization, faster rollouts, and more proactive services.

Conclusion

To meet their growth objectives, telcos need to transform. Instead of being commodity providers of connectivity, they need to deliver differentiated, secure, data-driven, and tech-enabled services. To make this transition happen, network observability is a must. By gaining true network observability, telcos can optimize performance, reduce risk, and boost business outcomes.