As the physical isolation of the pandemic showed, a more digitally connected world can bring critical services such as education and telemedicine to any region of the world, no matter how remote.
The economic implications, especially for developing countries, are significant. Research shows that increased connectivity can boost a wide range of industries, from retail and healthcare to manufacturing and oil and gas and add trillions of dollars to global GDP. In agriculture, for example, new use cases such as crop and livestock monitoring, farming by drone, drilling and production optimization and automation, and autonomous farming machinery all promise to radically reshape food production and accelerate sustainability.
To help prepare for this next era of digital connectivity, more than 3,000 telecom leaders, analysts, and other industry players descended upon Copenhagen in September for the largest ever DTW (Digital Transformation World) global conference, an annual gathering sponsored by industry alliance TM Forum.
The event, the first DTW conference to take place in person since the COVID-19 pandemic, came at a critical juncture for operators worldwide. As traditional value pools continue to erode, telcos are seeking to unlock new growth opportunities through data-driven transformation, an overhaul of traditional operating models, and novel approaches to ecosystem-building.
McKinsey, a 2022 DTW knowledge partner, had a substantial presence throughout the three-day event. Our telco experts organized and participated in multiple sessions tackling some of the most urgent issues facing the industry, with McKinsey clients from the US, Europe, and Latin America discussing their challenges lessons, and achievements.
“It was exciting the to see the momentum in the telco industry on full display, as leaders discussed the opportunities and challenges of becoming truly future-fit,” said McKinsey partner Duarte Begonha, who leads our core technology work in the telecom sector. “Telco leaders know that they need to think differently about collaboration, customer experience, talent, operating models, and what it takes to meet the needs of the modern enterprise.”
Nik Willetts, President and CEO of TM Forum, said DTW 2022 would leave participants with “energy and inspiration” for urgent change and the importance of designing “the right operating model.”
“We’re done talking about silver bullets from 5G,” Willetts told Duarte. He added: “It's about building a data-driven or AI-driven business, and the right operating model to achieve it.”
In a session called “Thinking like a techco, not a telco: How to win in B2B,” Duarte outlined untapped B2B opportunities for connectivity providers—services like cloud and AI ops and next-generation connectivity products like SD-WAN and edge computing. The discussion included the impact of delayering, the need to change the CIO role to a COO role, shifting from a focus on just products to broad solutions, and establishing journeys specific to B2B customer needs.
It was exciting the to see the momentum in the telco industry on full display, as leaders discussed the opportunities and challenges of becoming truly future-fit.
In a McKinsey-driven session on data, partner Benjamim Vieira was joined by associate partners Sebastián Cubela and Victor Trigo, to discuss how to build a data-driven telco. A key strategy is digital twins: virtual representations of real-world products or systems, to collect and model data. “Digital twins bring together the mirrored [data] and intelligent [AI] worlds,” Sebastián said, adding that roughly three-quarters of large enterprises, across industries, are actively investing in them.
In the final McKinsey session, on Cloud migration, partner Frederik Van Hecke discussed how telcos play a “marginal” role in the cloud market—for now. They can modernize their own IT systems to achieve scalability and cost efficiency; and as cloud suppliers, they can enrich ICT (information and communication technology) offerings for enterprise customers. “While there are multiple options, partnering with a cloud provider is the best viable option to quickly develop a capable cloud offering,” Frederik advised.