London, United Kingdom - 26 Feb 2019

According to ABI Research, a market-foresight advisory firm providing strategic guidance on the most compelling transformative technologies, there are five main areas of innovation that Mobile Service Providers (MSPs) must pursue if they want to be relevant in the market of tomorrow. These areas can be seen as platforms each delivering specific benefits and enabling MSPs’ transformation; they include a technology platform, a restructuring platform, an ecosystem and partnership platform, a go-to-market platform, and a Mergers and Acquisitions (M&A) platform. While many MSPs have started developing the right initiatives to move past their legacy telco structures and services, none of them have yet fully transformed themselves, nor do they have a comprehensive strategy to become a digital enabled player to compete with web-scale giants (such as Amazon and Google), and to seize new vertical opportunities.

“The restructuring platform is a necessary enabler of future competitiveness as MSPs must ensure their workforce is ready for the digital age by being skilled in areas such as SDN, cloud, open source, big data, and agile dev tactics,” said Pablo Tomasi, Senior Analyst at ABI Research. “Technology is another key platform for MSPs as technologies such as Artificial Intelligence (AI) and machine learning play a pivotal role not only to improve customer engagement but also in the realm of network automation. While MSPs currently have a fragmented use case approach to AI, they will have to look to build a wider pervasive AI framework to deliver wider benefits,” continued Tomasi.

Ecosystem strategies and go-to-market are two other key platforms for MSPs. An ecosystem platform is needed as in the digital and vertical market world, partnerships and collaboration are essential to target new opportunities. MSPs can count on global and local reach, which makes them ideal candidates to create an ecosystem of both global and local players as recently seen by NTT Docomo with its d point scheme. A go-to-market platform must be pursued, instead, to allow MSPs to target new opportunities that cannot be adequately obtained via their traditional channels. This includes the creation of specific units to target highly valuable markets as done by A1 with A1 Digital. MSPs must also change their M&A strategy as so far the clear majority of MSPs’ acquisition has been aimed to support the expansion of their traditional telco activities. The traditional MSPs’ M&A platform must change and MSPs must use M&A as a strategy to target new opportunities such as data, security, or end-vertical markets.

There is no blueprint for what the MSP of the future looks like, but there are lessons to be learned all around the market as various MSPs are leading the way and providing examples to follow in different areas. AT&T is betting on restructuring its workforce via its Future Ready Program re-skilling its employees and preparing them for a digital future. Turkcell shows the ambition of an MSP targeting the creation of a digital ecosystem, having launched services such as BiP (communication app), Yaani (web search engine), and Fizy (music service). Telefonica developed a company’s four-layer platform strategy driving its digital transformation and enhancing its relationship with the customers. “MSPs must learn lessons and accelerate innovation and investments in these five platforms to be relevant in the market of tomorrow,” Tomasi concluded.

These findings are from ABI Research’s Telcos' Strategies for Digital Transformation application analysis report. This report is part of the company’s Telco Digitization research service, which includes research, data, and Executive Foresights. Based on extensive primary interviews, Application Analysis reports present in-depth analysis of key market trends and factors for a specific application, which could focus on an individual market or geography.