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Benefit of Digital Transformation for Telecommunication Organaization

Research · February 2018

DOI: 10.13140/RG.2.2.35488.89605

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Journal of Marketing and Consumer Research www.iiste.org
ISSN 2422-8451 An International Peer-reviewed Journal
Vol.42, 2018

Benefit of Digital Transformation for Telecommunication

Organaization
Yousef Adel Alsafadi
School of Management, European Business School, 66 Av. des Champs-Élysées, Paris - 75008, France

Abstract
This paper intends to outline the benefits that are realized by telecommunications industry when they transform
digitally. The paper will also review some of the existing literature about the impacts that has already been
realized by various telecommunications companies upon transforming digitally. Recommendations about how
telecommunication organizations can better realize the benefits of digital transformation have also been covered.
Keywords: digital transformation, telecommunication industry.

1. Introduction
Digital transformation is developing as a key driver of far-reaching development in our general surroundings. It
can altogether enhance customer lives and make more extensive societal great while giving organizations new
open doors for value creation and catch. The telecommunications industry is at the bleeding edge of this change,
both as an industry seeing extensive scale change in its market condition and as well as a key driver of overall
digitization. Venture by the broadcast communications industry in innovation and interoperability has supported
a tremendous move in data and capital courses through the worldwide economy while giving the building pieces
to the development of completely new plans of action crosswise over enterprises. In parallel, access to an
internationally associated organize has engaged a large number of individuals around the globe, by giving them
access to constant data, commercial centers and social projects that will have long-haul suggestions for personal
satisfaction.

2. Research Questions
This research paper looks to outline the benefits of digital transformations for the telecommunication companies.
The guiding research questions will therefore include:
To determine the current impact that the digital transformation has had on the telecommunication industry.
To determine the role that digital transformation will play in the future of the telecommunication industry.
To determine the value that digital transformation is adding on telecom operators.
To determine the competitiveness the digital transformation is bringing about in telecommunication industry.
To determine the future digital initiates of digital transformation.

3. Review of Literature
Plainly digitization will be a wellspring of transformational change, yet various difficulties should be overcome.
Much of the time, the increases from digitization have been unjust, with the advantages not achieving the
individuals who require them most. In the meantime, the exponential increment in worldwide data streams has
made new dangers for information protection and security. Organizations crosswise over parts are pondering
difficulties identified with changing client desires, social change, obsolete direction and aptitude deficiencies, etc.
The World Economic Forum is focused on helping pioneers comprehend these suggestions and offering support
to shape better open doors for society. The Digital Transformation Initiative (DTI) is an undertaking propelled
by the World Economic Forum in the year 2015 to fill in as the point of convergence for new open doors and
topics emerging from the most recent improvements in the digitization of society and business. It underpins the
Forum's more extensive movement on the subject of the Fourth Industrial Revolution (Atkinson, & McKay,
2007).
In 2015, DTI investigated the effect of Digital transformation on six key ventures – car, purchaser
merchandise, power, human services, coordination’s and media – and on three cross-industry themes – advanced
utilization, advanced endeavor and societal ramifications. In 2016, DTI was reached out to cover seven extra
ventures, including broadcast communications, and two new cross-industry topics: stage economy, and societal
value and arrangement goals (Murdock, & Golding, 2009). Through its wide concentration, DTI has driven
engagement on probably the most squeezing subjects confronting enterprises and organizations today and gave
business and arrangement pioneers with an educated point of view on the best way to make a move.
The ever-more extensive accessibility of advances, for example, versatile, digital reasoning, cloud,
examination, and stages is drastically adjusting the way we live, work and collaborate – in what has been named
the Fourth Industrial Revolution. The telecommunications (telecom) industry is assuming a basic part in
empowering this digital upheaval unfurling around us. The telecom biological system has given the principal
building pieces – access, applications, and interconnectivity– that is empowering this advanced insurgency to

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Journal of Marketing and Consumer Research www.iiste.org
ISSN 2422-8451 An International Peer-reviewed Journal
Vol.42, 2018

happen. An extensive offer of potential value originating from digitization crosswise over worldwide businesses
throughout the following decade is subject to the telecom business conveying fundamental system, applications
and efficiency upgrades in numerous regions.
Retail. Broadband penetration will be basic to the development of web-based business, which could
straightforwardly bring about nearly $100 billion in value relocation from disconnected over the coming decade
to the online retailers.
Automotive. Tweaked systems that are used in the making of telematics and utilization based protection a
reality could spare around 120,000 lives by lessening car crashes.
Electricity. Telecom industry foundation will empower associated gadgets on the lattice and in shopper homes
to make an estimated $170 billion in aggregate cost reserve funds for customers over the coming decade.
The telecom industry faces a quickly changing monetary and focused scene driven by inside and outside
advanced interruptions. Up until this point, the part that telecom administrators have played in quickening digital
business and administration models has not converted into new an incentive for the administrators themselves.
Administrators' offer of the business benefit pool has reduced from 58% in 2010 to 47% out of 2016 and the
figure is expected to drop to 45% out of 2018. Pressure on conventional incomes implies that it is progressively
vital for administrators to take a look at new advanced plans of action to ensure that they share in the incentive
from digital transformation (Murdock, & Golding, 2009).

4. Analysis
The digital transformation of the telecom business is unfurling along two ways. The business faces a quickly
changing financial and focused scene driven by inward and outer digital interruptions that point to a very basic
level diverse future reality. In the meantime, the industry is progressively basic to understanding the substantial
societal and monetary advantages produced by the digitization of different ventures.

4.1 Empowering the Fourth Industrial Revolution

Consolidating technologies, for example, cloud, versatile, social, artificial intelligence, data analytics and drones
in creative ways can amplify their capacities exponentially. The "combinatorial impact" is hitherto more
prominent than the effect of conveying these advances independently. The juncture and ever-more extensive
accessibility of these innovations guarantee in a general sense adjust the way we work, live, and cooperate – an
improvement that has been named the Fourth Industrial Revolution (Bounfour, 2016). Empowered by telecom
innovation, the development of data and cash moving through the worldwide economy is mindboggling.
Worldwide streams of products, services, and back may triple from $26 trillion of every 2012 to more than $80
trillion of every 2025. To put these figures in context, the aggregate value of these streams expanded just 1.5
times in the 20 years in the vicinity of 1990 and 2012 (Atkinson, & Castro, 2008). Worldwide broadband
velocities are expanding at 20% a year (rates of 1,000 Mbps are currently turning into a reality), and it opens
huge conceivable outcomes for organizations and society. The significance of the telecom business' part is just
prone to develop as organizations over ventures coordinate cloud, versatile and worldwide digital services to
drive their plans of action and subsequently increment the significance of the fundamental system hugely.
Over a similar period, the number of related devices gadgets, which empower and drive plans of action in
the IoT, could achieve 30 billion. New innovative activities, for example, autonomous vehicles and drones will
depend intensely on a solid and secure network. We are as of now at a phase where systems going down could
put whole organizations and maybe human lives in danger. The telecom business is assuming a basic part in
supporting the digitization of different divisions (Brynjolfsson, & McAfee, (2012).

4.2 Incentive from Digital transformation has eluded operators

The part that telecom administrators have played in quickening digital business and administration models for
outer enterprises, and also their particular activities of refocusing plans of action, have not converted into new an
incentive for the administrators themselves. They now represent a little bit of the general business benefit pool
than five years prior, and this offer is expected to fall considerably further. It is settled that administrators have
not been fruitful in securing their conventional voice and informing income streams from advanced
organizations. Appraisals have demonstrated that over-the-top (OTT) applications create half to 90% less CSPs
income. While the exponential ascent in information utilization has given some alleviation, this has not been
sufficient to overcome the steady decrease in versatile voice average revenue per user (ARPU). Aggressive
estimating pressure and OTT interruption have been joined by quickly expanding costs as requests on data
transfer capacity and speed have kept on developing exponentially. While inheritance incomes have been under
pressure, telecom administrators have to a great extent neglected to dispatch and scale new plans of action. CSPs
may have made substantial walks in the innovation, principles, and interoperability hid remote and wireline
network however they have reliably missed out to both new, nimbler digital organizations, for example,
WhatsApp and officeholder innovation players that are forcefully obtaining advanced correspondence abilities

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Journal of Marketing and Consumer Research www.iiste.org
ISSN 2422-8451 An International Peer-reviewed Journal
Vol.42, 2018

(e.g., Microsoft and its securing of Skype). Impacting pressures on income and expenses, overlaid with
administrators' inability to adapt the digital opportunity, have brought about benefit and value pools moving
without end.
However, not all sections of the telecom biological system have attempted to make value. Digital content
creation, dissemination, and accumulation organizations have seen substantial increments in benefits and
investor value in the course of the last ten a long time (Atkinson, & Castro, 2008). Together with gadget
producers, the consolidated offer of industry benefits of these portions is relied upon to increment to 40% out of
2018, up from 29% out of 2010. Advanced substance makers and aggregators, including Google, Netflix, and
Facebook, have accomplished scale and caught an incentive by adequately utilizing the worldwide entrance of
the web to convey one of a kind advanced services and encounters to end-shoppers. Gadget makers have become
them advertise capitalizations through the groundbreaking products and innovation in design that has made cell
phones an imperative piece of our digital lives.
Cable and fixed-line companies have profited from the quick development in IP broadband systems,
particularly with the extensive increment sought after for fiber (FTTx) arrangements, however, have likewise
been to a great extent fruitful at adapting the union of broadband and tv (Czarnecki,, & Dietze, 2017). The
interests in corresponding organizations that drive the interest for the network through their channels (e.g.,
Comcast's procurement of NBC Universal; BT's raid into sports broadcasting) are likewise demonstrative of a
more prominent union over the digital correspondences biological community. Looking forward, what may the
appropriation of industry benefits in 2025 resemble? Curiously, a significant number of the officials met trusted
that the offer of remote/wireline administrators in industry benefits could fall much further, suggesting that these
organizations are still not doing what's necessary to catch long haul an incentive from digitization.

4.3 The regulatory and competitive environment is evolving

There are signs that the following period of rivalry in telecommunications may appear to be unique from the past,
quickening the requirement for administrators to forsake incremental activities for transformational development.
Various key patterns are probably going to expand pressure on edges by driving administrators to embrace
extensive speculations when rivalry in the business is heightening. These patterns include:

4.4 1,000x capacity driving innovation paradigms

The development in data consumption and the sudden increase in the number of connected gadgets are probably
going to require future systems to have one thousand times more limit that is accessible today. In the meantime,
a developing number of continuous applications will request that conclusion to-end arrange dormancy be
decreased to milliseconds, to empower a consistent and slack-free involvement in perusing, watching recordings
or even controlling remotely robots or vehicles (Welfens, & Yarrow, 2012). To adapt to data transmission
request, portable systems will change into an enormously thick heterogeneous system ("HetNets") with a high
level of adaptability managed by innovations, for example, software-defined networking (SDN), Cloud RAN and
network function virtualization (NFV). With range productivity and data transmission going to its consistent
limits, the new ordinary will be densifying cells by up to a factor of 100. Some of these prerequisites are to be
met via the normal change to the people to come (5G) organize, however, the quick increment sought after is
probably going to drive significantly speedier improvement, and appropriation of these innovations on heritage
arranges too.

4.5 Colliding on platforms: "fighting for the center."

The rise of the digital economy has implied that systems and semiconductors now shape the foundation layer of
use particular innovation stacks, with different layers comprising of empowering stages (mix programming,
working systems), applications and advanced services for end-clients. Up to this point, these layers have grown
autonomously, with huge quantities of members in each layer contending to fabricate and give services to
particular utilize cases. In any case, we are as of now observing expanded union and union towards the center
stage layer.
Application engineers and advanced specialist co-ops are building up their coordination systems and
middleware as these viewpoints wind up plainly basic to their plans of action and furthermore give substantial
income and benefit openings (Amazon Web Services is a prime illustration). In the meantime, arrange
administrators are growing new capacities in these zones to move past the moderately moderate developing
system layer. For those that prevail in this "battle for the center," the advantages are probably going to be
noteworthy.

4.6 Diminishing differentiation

The rise of data-driven models now implies that focused separation is driven by organizations that can best use
customer information to drive plans of action. Telecom players, effectively inadequate OTT organizations in this

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Journal of Marketing and Consumer Research www.iiste.org
ISSN 2422-8451 An International Peer-reviewed Journal
Vol.42, 2018

regard, confront a genuine danger of being left to contend on two intrinsically conflicting fronts – cost and
throughput – which could put edges under further pressure.

4.7 Networks as national resources

Governments are perceiving the potential for telecom systems to drive focused separation at a national level.
However, they additionally see the business as a key wellspring of government income through permitting
expenses and sectorial charges. A few are sending broad fiber-to-the-premises (FTTP) systems on a national
scale to connect a rising advanced partition and convey key social advantage programs (Atkinson, & Castro,
2008). In any case, these endeavors that put systems at the focal point of government or political motivation
could mean higher gainfulness pressures on administrators through more noteworthy administrative investigation,
evaluating pressures or even colossal nationalization of telecom resources.
A progression of digital, industry and client patterns is quickening digital transformation in broadcast
communications. The business is preparing for a gigantic increment popular from different ventures. Client
desires are crossing industry limits and increasing current standards crosswise over businesses, driving telecom
administrators to rethink client encounter. Systems themselves will develop from being separated from
restrictive equipment to a period of programming characterized systems. Also, pressures on conventional
incomes have implied that administrators are taking a look at new advanced plans of action and administration
regions, with ranges, for example, IoT liable to rise as new battlegrounds

5. Future Digital Initiatives

5.1 Networks of the Future
A major key accomplishment of the telecom business has been to set up the tremendous physical systems of
nearby, national and worldwide availability that have changed the world. In any case, the capacity of physical
foundation to drive separation has reduced definitely. Later on, systems are probably going to develop in two
principal ways. To start with propels in digital and cloud abilities will change administrators' cost bases, moving
far from costly, exclusive equipment to non-exclusive, commoditized gear that enables a more prominent offer
of assets to be contributed in expanding unwavering quality, adaptability and development through programming.
Second, a blast in various utilize cases crosswise over enterprises will require systems that are adaptable, self-
ruling and redid, while guaranteeing that basic information streams are dependable and secure.

5.2 Software-differentiated networks

Network functions over the coming decade actualized on expensive equipment will be supplanted with
lightweight software supporting standard "IT-like" or API-based interfaces, deployable on extremely cheap,
broadly useful equipment stages. This move is being driven by advances based on and empowered by the cloud,
for example, network function virtualization (NFV) and software-defined networking (SDN).
While the telecom industry is yet to touch base at a typical vision for future systems, most view SDN, and
NFV as key to their plans. These advancements guarantee a few imperative advantages: SDN by isolating the
control and information layers; furthermore, NFV by supplanting complex system capacities with simple to-
control virtualized programming. Across the board selection of these advances will be driven fundamentally by
organizing fetched diminishment – 64% of administrators evaluated this as the principle selection trigger in a
current overview. It is evaluated that SDN and NFV could produce investment funds of 25% to 75% of a general
administrator working consumption on account of fundamentally diminished provisioning, observing and
equipment costs (Welfens, & Yarrow, 2012). These innovations likewise guarantee to make an incentive for
clients through adaptable services, speedier circumstances to market and enhanced client encounters. The
capacity to see and control organize works on request, and at a granular level, will catalyze benefit advancement
and permit more grounded coordinated efforts amongst clients and providers. All things considered, the sending
of SDN and NFV may resemble some other industry innovation push, however numerous experts are contrasting
the scale and extent of the change to be proportionate to the presentation of IP-based systems (which empowered
the worldwide web). While current selection levels are immaterial, SDN and NFV are expected to be a principal
part of telecom organizes over the world by 2025, with huge potential advantages for both the business and its
clients. While there is yet to rise a typically characterized standard for sending crosswise over transporters and
advances, huge system bearers are probably going to lead the endeavors to create and institutionalize basic parts
of SDN and NFV.

5.3 Expanding connectivity

Internet penetration remained at 45% globally in 2016, implying that the greater part of the world, prevalently in
developing markets, is yet to join the digital economy. With digitization expanding quickly around the globe and
turning into a need for approach pioneers and organizations alike, we hope to see an expanding push to associate
the detached. Nonetheless, huge difficulties remain. As these undiscovered markets frequently exist in little

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Journal of Marketing and Consumer Research www.iiste.org
ISSN 2422-8451 An International Peer-reviewed Journal
Vol.42, 2018

groups in remote locales, broadening conventional system get to isn't practical for arranging administrators,
given a high cost for every piece and constrained capacity to adapt information use. Various new advances are
putting forth administrators and gear suppliers the chance to conquer some of these monetary and operations
challenges through imaginative methods for expanding the reasonable last-mile network (Welfens, & Yarrow,
2012). Organizations, for example, Google, Facebook, and OneWeb are steering new lower-cost techniques to
extend the span of existing earthbound systems utilizing rambles, hot air inflatables, and satellites. As endorser
development in the created world achieves stagnation, these organizations are quick to quicken the pace at which
undiscovered markets are brought into the advanced crease. Much of the time, these organizations accomplice
specifically with neighborhood telecom administrators to get to or give backhaul limit and let the administrator
lead the pack in dealing with the end-client relationship.
For telecom service operators, these new advancements can beat huge cost hindrances in coming to remote
districts crosswise over created and creating markets. By collaborating with new contestants, telecoms will have
the capacity to hold control of key client connections, drive more extensive access and empower substantial
societal advantages from associating the detached (Atkinson, & Castro, 2008). It is imperative to note, in any
case, that while access to bring down cost systems can engage a great many individuals, the societal advantages
won't be acknowledged by broadening system get to alone and require deliberate open private activity to address
difficulties of reasonableness, abilities and locally significant substance.

5.4 Digital services

As digital disruptors and OTT players assault conventional correspondence incomes, telecoms are seeking
circumstances to climb the digital stack to the services layer. With an extensive client base, responsibility for
foundation and solid innovation capacities, telecom administrators will endeavor to go up against the part of
digital services suppliers, regularly rising as disruptors to different enterprises (Malecki, & Moriset, 2007). In a
current study crosswise over worldwide administrator, just about a fourth of organizations announced that they
expect advanced services crosswise over purchaser and undertaking applications to represent over 25% of
aggregate incomes by 2020. The following decade will see administrators make a forceful push to change their
income blend through centered activities over various key services applications. The business has rushed to
perceive the open door that digital services speak to and over the previous decade a few organizations have
propelled various offerings. Maybe a couple, in any case, have possessed the capacity to catch critical incentive
at the scale and speed of advanced disruptors, notwithstanding approaching a few key fixings, including a large
number of client connections and exclusive information (Murdock, & Golding, 2009). Most organizations still
can't seem to beat key inhibitors on ability, inheritance IT systems, and troublesome control to contend viably
against web organizations that are speedier to showcase with new items and unhindered by vast heritage
organizations. Our value in question investigation demonstrates a vast potential value open door for industry
members. In any case, this will require forceful and transformative changes which must be expert through
stringent concentration at the executives.

5.5 Charming the digital client

The idea of customized items and services isn't new however advanced advances empower organizations to
convey them at a scale and in ways that were beforehand incredible. Firms in the advanced area are creating
brilliant calculations that dissect client information continuously to convey redid and contextualized encounters
to a great many clients at the same time (Atkinson, & Castro, 2008). At the point when telecoms set out to
change the client encounter, they ought to know about differing inclinations amongst districts and client sections.
Studies have demonstrated how, for instance, clients in the U.S are more disposed towards physical associations
in a store as contrasted with other created showcases in Western Europe, an imperative finding that clarifies the
distinctions in the selection of self-benefit advanced directs in these locales. Starker contrasts can be seen when
looking at created and developing markets, where a selection of advanced channels frequently faces hindrances
identified with dialect and absence of digital proficiency.

6. Recommendations and Conclusion

With major developments ahead, the telecom business must adjust. For a few, that implies changing their method
for working. The biggest pools of significant worth will be found by those not simply with the best-quality
systems but rather who rapidly grasp digitization over all parts of client encounter, inner association, and
development. Also, the industry, all in all, must work harder and more intently than any time in recent memory
with governments and arrangement pioneers internationally to defeat key inhibitors to industry and societal value
(Welfens, & Yarrow, 2012). Digital transformation will drive changes in business and working models that
effect a few sections of the business and require centered activity. The following is a demonstrative activity
arrange for that could enable business pioneers to survey the extent of progress and characterize an unmistakable
activity design of their own.

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 Journal of Marketing and Consumer Research www.iiste.org
ISSN 2422-8451 An International Peer-reviewed Journal
Vol.42, 2018

Digital transformation can change the way we work and live to the degree that is tantamount to past major
modern unrests. While the potential for Digital transformation to profit industry and society is enormous, it is in
no way, shape or form ensured that the full estimation of digitization would be opened – to do as such will
require concentrated and decided activity concerning every significant partner. In the meantime, social orders
and enterprises will need to get ready for any unwanted outcomes of this change, especially in connection to the
business, information security, and protection. For the telecom business, the effect of digital transformation has
just been noteworthy and the coming decade will be basic in characterizing the business' part in the more
extensive advanced economy for a long time to come.

7. References
Atkinson, R. D., & Castro, D. (2008). Digital quality of life: Understanding the personal and social benefits of
the information technology revolution.
Atkinson, R. D., & McKay, A. S. (2007). Digital prosperity: understanding the economic benefits of the
information technology revolution.
Borgman, C. L. (2010). Scholarship in the digital age: Information, infrastructure, and the Internet. MIT press.
Bounfour, A. (2016). Digital Futures, Digital Transformation. Springer, Cham.
Brynjolfsson, E., & McAfee, A. (2012). Race against the machine: How the digital revolution is accelerating
innovation, driving productivity, and irreversibly transforming employment and the economy. Brynjolfsson
and McAfee.
Czarnecki, C., & Dietze, C. (2017). Reference architecture for the telecommunications industry: Transformation
of strategy, organization, processes, data, and applications. Springer.
Malecki, E. J., & Moriset, B. (2007). The digital economy: Business organization, production processes and
regional developments. Routledge.
Murdock, G., & Golding, P. (2009). Digital possibilities, market realities: the contradictions of communications
convergence. Socialist Register, 38(38).
Welfens, P. J., & Yarrow, G. (Eds.). (2012). Telecommunications and energy in systemic transformation:
international dynamics, deregulation and adjustment in network industries. Springer Science & Business
Media.

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