Lessons of a decade in telecommunications

Csaba Végső
Dec 4, 2019 · 5 min read

We are celebrating a milestone this year, our first decade in the telecommunications industry. Here we present you with a single important takeaway we distilled from our work with telcos throughout the years. The takeaway is a pattern that we believe is defining how customers interact with the telco brands in the new digital era.

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We started as the creative and digital agency of Vodafone Hungary. Then in the past 4 years we designed and built several digital solutions for the Deutsche Telekom Group — peaking at the EU-wide self-care mobile application, the One App.

It’s been quite a journey.

In the last 10 years, the industry was shaping in front of our eyes: incumbents progressed from telecommunication companies towards Digital Service Providers.

We worked with 11 local telecom companies in 10 European countries, and also with the central teams of Deutsche Telekom Group. We saw many perspectives and heard many opinions. Everywhere we kept coming across the importance of the customer experience. The very same principle we always considered to be the foundation of excellence. However, delivering an outstanding digital experience is something that is still almost unique to the digitally native companies, such as the often cited Apple, Uber or Amazon. It is safe to say, many telcos are struggling with getting there.

Is it the will? Or the lack of commitment? Possibly. One issue for sure is legacy.

Telcos usually sit on a surprising number of legacy systems, due to historical reasons. It has been addressed many times, and is an ongoing dilemma for the entire sector. Enormous projects were grounded during the digital transformation of many companies to consolidate and modernize the Operation and Business Support Systems (OSS/BSS) — often spanning years in time, and millions of Euros in value.

All this happened in the past decade, at the same time we saw the breakthrough of mobile platforms, social media, and the aggressive and high quality over-the-top (OTT) players such as Apple, Facebook, Google (or now rather Alphabet), Tencent and many more. We saw them cannibalizing traditional service revenues — a problem amongst many others causing difficulty for incumbents in this period.

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Over-the-top (OTT) revenue cannibalization, relevant revenue, %

On one hand, customer facing frontends were locked into old technologies due to the integrated legacy systems. It easily limited the otherwise outstanding designs, and turned implementations into a nightmare.

On the other hand, the IT departments’ core competency is the development and maintenance of high availability transactional systems. Telcos are often short on resources in the special field of frontend development. They struggle to keep up with the ever-changing trends and technologies that deliver the level of experience customers duly expect in the digital channels.

The rise of decoupling and APIs shed light on a solution. The separation of legacy B/OSS systems from the customer facing frontends is a key factor in reaching the desired level of speed, control and user experience:

  • Decoupling enables telcos to use cutting edge frontend technologies, while integrating the legacy backend services via APIs. Such integrational APIs are becoming standard in the industry, like TM Forum’s Open APIs specification, that have been actively developed and supported since 2016.
  • It eases the tension between business and IT. It allows business to have control over the customer facing interfaces by removing these from the core IT domain. IT and security teams are willing to allow e-commerce and marketing teams to take control over frontends, providing it does not have an affect on business critical backend systems.
  • Separation of frontends enable business to reach their optimal time-to-market. It allows the internal teams and vendors to efficiently collaborate alongside the Agile principles. It gives business teams the freedom to continuously experiment, measure and learn from the results. All taking place in a very short interval, to meet customer expectations.

The renowned advisory firm McKinsey & Company presented a similar reasoning on the topic in an article earlier this year:

“Forward-thinking telcos that are already undertaking the process aim for a target architecture comprising three layers: a front end delivering a best-in-class, mobile-first customer experience; an agility layer based on a microservice platform to enable flexible and scalable development of services that move business logic away from legacy back-end applications; and a back end with a module-based product catalog that allows easy and quick extension of the standard telco product stack to accommodate new business units or partners.”

McKinsey.com, January 2019

https://www.mckinsey.com/industries/telecommunications/our-insights/the-building-blocks-telcos-need-to-create-their-digital-and-analytics-dna

We are at the doorsteps of a radically new era. 5G, IoT and Smart Cities are here together with all their uncertainties. Telcos have been rolling up their sleeves to seize these opportunities as true Digital Service Providers. They are ready to extend their capabilities and revenue streams while still maintaining cost effective, solid core functionalities.

Our lesson from these years is that real impact is possible regardless of the piled up legacy. If you commit yourself to pursue supreme customer experience, all obstacles and technical burdens can be overcome. But be aware: this is not a well paved road. There is a great example at our disposal from the recent past. Deutsche Telekom’s initiative to unify their self-care application on the fragmented footprint of Europe was a bold move, accompanied by the dubiety of many. Today it is recognized as an industry best practice. The fact that we were the agency that brought this digital solution to life together with DT is our latest confirmation that we did learn the lesson well.

Mito is a full-service agency based in Budapest, the heart of Europe. We have been working with our clients around the globe for more than 10 years to create modern, lean, best-of-its-class user experience digital solutions.

We live and breathe telecommunications, and we love to design solutions that matter to the customers of our clients. We create interfaces that are straight-forward and aesthetically pleasing while hiding all the complexity that lies behind.

Our expertise complements clients who lack the resources to design, deliver and evolve state-of-the-art frontends.

Interested? Have an opinion? Let’s talk.

https://mito.hu/telecommunications/

Mito

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