This article is a nine-minute read.
In strip-lit convenience stores across Tokyo, a single till operator shields behind a Perspex panel while shelves are silently stacked by robotic assistants. Bands perform gigs to empty theatres live-streamed into living rooms around the world while high schoolers virtually graduate in ceremonies conducted on Minecraft. Face masks are the new fashion statement, keeping your distance the new way to show you care, and Zoom parties the only way to really celebrate with family and friends.
Welcome to low-touch living. These are not out-takes from a post-apocalyptic Hollywood blockbuster but a snapshot of how the world looks and feels in the era of COVID-19. Communication Service Providers (CSPs) and the people designing and scaling the networks that support them have been on the frontline throughout this pandemic, keeping communities connected and key services running. With this challenging global status quo likely to persist well into next year, Nokia has been considering what’s next.
How can CSPs go from supporting these cultural and commercial changes to leading them? From surviving to thriving.
Boom, bust and what’s beyond
Just as the pandemic has rapidly shifted consumer attitudes and behaviors, industry sectors have also had to deal with the ramifications of COVID-19. While some have boomed, others have struggled to bounce back at all.
Businesses re-opening their premises are quickly recalibrating operations to become more automated, contactless and COVID-aware. Enterprise planners are preoccupied with figuring out which new behaviors and attitudes are likely to endure beyond the pandemic as they look to roll-out innovative services and pivot business models to protect their future.
It’s game on for some, game over for others. Newzoo predicts a $159.3 billion consumer global game industry revenue in 2020; that’s a 9.3% year-on-year increase. It also forecasts that the market will surpass $200 billion by the end of 2023. At the same time, sectors such as travel and high-street retail are inevitably struggling and being forced to rapidly reframe how they operate. In the restaurant sector, the shift to socially distanced and off-premise dining are likely to outlast the COVID crisis, meaning responsive players are focussed on refining the track and trace and digital ordering processes which are now so central to the low-touch dining experience. This reframing process is being mirrored across industry sectors and much of it depends on high quality and agile, on-demand network connectivity.
The best way for CSPs to thrive in the new normal is by embracing the new possible, getting inside the fresh thinking and technologies that are set to shape our world. We spoke to industry experts engaged in spotting emerging trends and new revenue opportunities to create five smart tips for CSPs:
Double down on customer first: Make emerging innovation really work for new consumer and business needs.
Think outside the telco bubble: Scan the horizon and strike up unexpected partnerships, even with competitors.
Transform infrastructure to become a foundational digital player: Why harnessing 5G is the secret to success.
Empower the digitizing of key life moments: Jump onto and enable a raft of lucrative new services.
Embrace the rise of altruism: Costs very little and likely to amply payback in the long-term.
Keep reading for next-level insight you can rapidly act on.
1. Double down on customer first
Cannibalization is your customers telling you that they want something new, was the wise response of Randall Stephenson, then CEO at AT&T, when asked why he had offered their mobile customers unlimited video streaming in competition to their own satellite TV service. He knew that building higher walls and deeper moats around services rarely works in fast-paced telecoms markets. Putting customers first is the only way forward.
This age-old maxim holds truer than ever in the era of COVID-19. CSPs must now understand, prioritize and deliver against customer needs and desires as if their very survival depends on it. That begins with exploring how new cultural and workplace demands have accelerated the maturing process for technologies such as automation, Augmented Reality (AR) and Artificial Intelligence (AI), drones, robotics and voice-activated assistance. CSPs have a unique opportunity to reimagine how these emerging technologies could intersect, architecting new services that are right for the times, creating safer, richer and more seamless business and consumer experiences.
New home entertainment models? Friction-free cybersecurity approaches? Clever new track and trace capabilities? The trick is to never innovate for the sake of it but to first figure out what shape your service portfolio should take, starting with the most pressing customer problems to be solved, and working backward to decide what ‘on trend’ tech, if any, could help you get there.
Verizon offers one great example of smart customer-first thinking in action. It recently purchased popular US Video Conferencing (VC) player Blue Jeans to offer customers the integrated new enterprise VC capabilities that have become so vital in lockdown. At the same time, VR meeting specialists have quickly sought new investment from telecoms companies and used it to pivot, allowing people to join VR meetings from regular PCs.
Meanwhile, BT ‘Grad Labs’ program hires fresh graduates to look at customer challenges and needs in new ways. This kind of small taskforce separated from the mainstream of the business and freed from limiting old thinking can be a magic formula for the creation of unexpected new customer-first solutions.
And sometimes it helps to question some of your most basic assumptions about your customers and market. In the UK, BT is shattering the unwritten assumption that one household could/should only have one fixed broadband line, with their offer of second line at a lower price – no matter who the provider of your first line is. The expands BTs potential fixed line customer base enormously, while simultaneously solving their customer’ very modern problem of too many people streaming/Zooming/schooling/Netflixing in one house at the same time, all day long.
2. Think outside the telco bubble.
We are entering the era of ‘associative specialization’ in which the most successful CSPs will associate very freely across sectors, bringing skills and specialisms together to achieve exciting new service moon-shots. The aim is to create powerful ecosystems of innovation, exploiting emerging revenue opportunities and designing new ones that redefine customer experience, cost, profit and margin. After all, no-one ever reached the moon on their own.
It makes no financial or competitive sense for CSPs to develop a whole new innovation practice in-house to harness tech such as AR and AI; building outside partnerships is a way smarter model. It may well pay to ally with competitors too in order to deliver a safer, more seamless and lucrative future — or partner Over-the-top (OTT) platform providers to create popular new media streaming services.
CSPs need to actively scan the horizon across sectors now, observing where connectivity plays hardest and how new network technologies such as 5G will reset customer experience. What imaginative new services or exciting business models are becoming possible? What bold new partnerships might help deliver them?
One of the best recent examples of the power of cross-sector partnership comes from the Japanese telco, KDDI. When it launched its new 5G service in March 2020, it partnered US media giant Netflix and Chinese AR innovator NReal to create a unique AR experience overlay in Shibuya, Tokyo. Based on the iconic anime, Ghost in the Shell, building owners displayed AR advertising within the experience, using an innovative revenue-sharing model. KDDI quickly pivoted when the pandemic and lockdown hit, building a ‘Virtual Shibuya’ digital twin that subscribers could experience from home using avatars. Together, these three companies created something that none could achieve alone.
Vodafone has also partnered with regulators and drone companies, harnessing 5G on the path to creating the first global air traffic control system for drones.
And usually hard-nosed Korean telecoms adversaries LG U+, SKT and KT also shared parts of their VR gaming libraries with each other’s customers during lockdown because content was being ripped through at such incredible speeds. All great examples of the open, far-sighted thinking needed to thrive in these exceptional times
3. Transform infrastructure to become a foundational digital player
While some CSPs are searching for that one killer app that’s going to unlock future revenue, others are switching focus. They’re starting to build a 5G platform that will be ready to deliver all sorts of future digital ecosystems and services, turning CSPs into foundational enterprise players. This requires a new operations paradigm, technically and commercially transformed and powered by a changing concept of technology ‘ownership.’
CSPs are increasingly finding ways to wholesale, embed or bundle other people’s services in with theirs to create new ‘out of the box’ ecosystem-driven service packages. Packages that can keep bandwidth, latency and uplink requirements on point to support a new breed of industry and consumer need. These span everything from fast, on-demand consumer services to hyper-segmented business services and IoT/ industrial applications with built-in connectivity, security, computing and data management.
It all requires the right network, operational and business infrastructure, creating a 5G digital value platform that subverts the usual paradigms to deliver:
Cloud native elasticity enabling on-demand, virtual network and services management.
Secure APIs that enable ecosystem partners and third parties to embed network services into applications and services and define and build services at will.
AI automatically deriving insights, anticipations and alerts from a huge variety and volume of data
Extreme automation of operations to cost-effectively convert AI-driven insights into business outcomes
AI automatically deriving insights, anticipations and alerts from a huge variety and volume of data
360° experiences attractive to businesses and consumers.
IoT-ready solutions and services
Business slices offered on-demand, including all necessary operations automation
DevOps for internal CSP innovation teams integrated seamlessly within the partner ecosystem
Looking at this list, it becomes clear that 5G is less the fifth generation of existing technology, more the first generation of a new communications and digital services paradigm. With 10X lower latency, 100x more throughput and 99.999999 reliability, 5G can connect networks to businesses by building powerful slice-based services that cut across underlying network technologies from RAN and fixed wireless to fiber and small cell.
The GSMA predicts a slicing-based services market worth US$300 billion by 2025, enabling exciting new business models alongside revenue growth. One great case in point came with the poorly received US launch of the Google Stadia cloud gaming service in 2019. Google Stadia subsequently partnered with BT for the successful UK launch supported by network-optimized service slices honed for the needs of players.
Cloud gaming apps that launch their own 4G-5G network slice could become a great competitive differentiator for CSPs and it’s a service model that’s bound to be adopted in other sectors. 5G can help CSPs climb the value chain by provisioning edge computing, delivering real-time analytics and creating and hosting new services and applications like these, all packed into stringent SLAs.
4. Empower the digitizing of key life moments
People at the grassroots are increasingly migrating activities no longer possible in the real world, such as weddings and school graduations, online. Video games like Animal Crossing and Minecraft, built to be sociable and collaborative, are proving the perfect platforms for coming together in a socially distanced world, enabling important life moments to still take place. We are witnessing the birth of whole new parallel virtual universes and lifestyles and will look back five years from now and realize that this pandemic was the moment when we really started taking the parallel virtual universe seriously.
CSPs need to consider how they can support and drive this change. Here are just a few great examples of inspiring new live streaming activities around the world:
Korean Pop (K-Pop) and US artists like Selena Gomez have held concerts using Animal Crossing live-streamed on Twitch, the platform recently bought by Amazon.
Twitch has also become a hub for watching others game, with the most popular and entertaining players pocketing as much as $ 3,6000 per video.
NASCAR is holding live virtual stock car races on a gaming platform using real drivers with real sponsorship. One driver even lost his sponsor over perceived poor sportsmanship during an online race — that’s how seriously it’s now taken.
5. Embrace the rise of altruism
This time of pandemic has seen a rise in genuine altruism at a corporate and governmental level. Regulators in many countries have liberalized spectrum rules and released additional bandwidth so operators can quickly lay on extra connectivity for communities in need. In countries such as South Africa, this has proved critical to keeping social and educational structures and the economy afloat. Many telco operators have also given away data to end-users to help them work and stay educated without additional charge. This kind of open-heartedness, generosity and goodwill is likely to generate longer term loyalty and stickiness for your brand
According to Deloitte Digital, when consumers describe the relationship they want with a brand it sounds a lot like “a good old-fashioned friendship”. In fact, their research suggests that shared values create stickiness. A Deloitte Digital research study conducted last year points to shared values as one of three major factors in building genuine brand loyalty, alongside emotional responses and rational considerations. In this time of pandemic when people are feeling vulnerable and exposed, building emotional engagement with your brand with genuine acts of altruism may matter more than you realize.
Take a lead in the digital and automation revolution
While we are all likely to go back to doing some activities in person post-COVID, many things may never return to ‘normal’. In fact, one side-effect of the pandemic has been to smooth the path to acceptance for some latent digitization and automation trends. The need to stay home and stay safe has helped people recognize the deep convenience and safety benefits offered by new technologies as diverse as virtual healthcare consultations, robotic retail assistants, fully automated production lines and video-based conferencing.
CSPs looking to steal a lead with customers in any major sector will need a real fluidity of thought, operational and network agility and the willingness to innovate to both originate and support the kinds of major business model changes now on the horizon.
In upcoming videos, articles and papers, Nokia will be talking to thought leaders in key sectors such as healthcare, retail, manufacturing, transportation and logistics and energy and utilities.Our aim is to understand better what the future holds for these industries and how it, in turn, impacts CSPs.
After all those that can predict the future will always have a head-start in leading it.