Digital Transformation and the Path to 5G

Daniel Herb, Director of IoT, T-Mobile US

Daniel Herb, Director of IoT, T-Mobile US

Mobile carriers have always faced a stack of challenges which reflect the three nested business models within a mobile service provider: a retail merchandizer, a network operator, and a network builder.

As with many industries, the telecom sector used to be able to digest changes within one business model by leveraging steady cash flow from more stable elements. Today, disruption occurs at every level simultaneously.

The dramatic changes in retail are no secret. The forthcoming ‘retail apocalypse’, significantly driven by Amazon-led e-commerce, is front page news. The critical need for digital transformation has forced mobile operators to radically rethink their sales, operations, and care strategies.

The physical retail experience has flipped on its head for many product lines, especially technology-driven segments. Customers increasingly come to stores not to shop before buying but to do the opposite—to purchase or service something they have already researched through their social networks, recommendations of friends and influencers, and visits to websites. This requires a major overhaul of how you staff, lay out your stores, and manage product merchandizing and lifecycle.

The operations which serve the retail frontline, therefore, must also undergo a massive change. The IT systems and legacy software built to run big companies, distributed supply chains, and manage financial risk and reporting were never built with the idea of scouting and incorporating customer feedback, being measured by speed to deploy, or supporting DevOps environments of constant deployment. Picking what to save by enhancing and what to leave behind is perhaps the most critical bet facing large service providers today.

Finally, the sales cycle begins and ends with care. Customers expect to be able to self-manage and if they have to reach out to your customer care to find or fix something they can’t, you’ve already lost. Few legacy retailers with massive physical distribution manage this or even come close. As a result, it is critical to identify, prioritize, and build journeys that customers care about and take the most. The effortlessness of these journeys, across physical and digital channels, is the key to winning customer loyalty.

This recipe for rebooting the network service provider retail experience is only the first layer of change. Becoming a single customer experience across channels has to be done while preparing the operations and network core for the massive scale of the Internet of Things (IoT).

Similar needs to support increased agility, the ability to reconfigure via virtualized networks, and building to provide that capacity at the radically lower margin and cost structures of sensor-based objects is the 5G arms race.

Fueling these advances will again require hard choices and wise planning to ensure the right legacy technologies are shut down and reconfigured aggressively, before their “natural” lifespan. You can see this today in the rapid redeployment of 2G and 3G spectrum and networks.

In the same way that success in digital transformation hinges upon selecting the right customer journeys, the 5G winners will be the ones who align technology bets with the right customer use cases. This means starting small and focusing on solving problems on a local level with an eye to what will scale across regions or industries. Making big bets on a “platform” or solution set designed to appeal broadly now will fail, as the IoT market is still emerging.

Timing 5G investments to support use cases will also highlight where technology bets can be deferred as customer abilities are developed. Mapping the needs that the network infrastructure has to support will create a technology roadmap for digital transformation as well as the 5G build out which is already underway.