What’s keeping telcos awake, disruptive competition, says EY survey

EY said that more than one third (37%) of CTOs and CIOs it interviewed see disruptive competition as the single greatest strategic challenge facing the telecom sector

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In a newly released survey, consultant firm Ernst & Young (EY) said that more than one third (37%) of CTOs and CIOs it interviewed see disruptive competition as the single greatest strategic challenge facing the telecom sector.

Nearly three out of four survey respondents (74%) place it in their top three challenges, followed by lack of organisational agility (47%) and lack of return on investment (37%), said Digital transformation for 2020 and beyond survey of EY.

According to EY, operators are focusing investment through 2020 on digital business models and improving the customer experience to address new competition from outside the sector.

“When asked about their main strategic priorities, 39% of survey respondents identified customer experience as their number one focus area and 61% said it’s one of their top-three initiatives. Digital business models emerged as the biggest strategic priority for 24% of those surveyed and a top-three priority for 71% of respondents,” said EY.

Asked which digital services offer the best opportunities for incremental revenue growth, the survey respondents cite a wide range of service areas. Operator confidence in () services is rising, with 31% of respondents viewing smart home as one of the top three drivers of future revenue growth. Meanwhile, 37% see 5G as the network access technology with the greatest impact on the industry over the next five years, the number one answer when respondents were asked about technology trends.

Turning to the obstacles facing operators on their digital transformation journey, legacy IT is seen as the main impediment to transformation — cited by 65% of respondents as a top barrier.

The 2017 global telecommunications study has been conducted by EY to monitor and evaluate the evolving views of leaders across the global telecommunications industry. The survey drills down into perspectives from the industry’s CIO and CTO community in order to explore the role of IT and networks and to examine how this is supporting long-term digital transformation, said EY.

According to EY, it conducted 39 in-depth interviews with participants from 36 organisations, supported by insights and analysis from EY’s sector professionals and secondary research sources. The 36 organisations taking part this year account for annual revenue of US$421 billion and an aggregate market capitalisation of US$603 billion.

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