Research: Telcos to invest £16m in transformation

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Research has revealed that, on average, European telcos plan to invest £16 million (€18.5m) in tech and service development over the coming three years.

The research, carried out in the UK, France and Germany on behalf of telecoms technology company Telness Tech, found that virtually all telcos (97 per cent) pledged to make immediate investments to their back-end infrastructure within the next 12 months.

As part of this investment, a third (33 per cent) of the overall planned spend will be directed towards upgrading back end infrastructure and 31 per cent will be funnelled into providing better services for customers.

Despite big funding plans, telcos do not recognise a need for greater innovation. When it came to acknowledging their future plans, only 16 per cent of telecoms decision makers recognised a need for the industry to be more innovative and almost all telcos (97 per cent) were confident in their organisation’s ability to stay competitive in the next 12-18 months.

However, customers told a different story, ranking large telecom providers as less innovative than technology companies in other sectors – such as finance, automotive and consumer apps and services. In fact, two thirds (64 per cent) of customers revealed plans to leave their mobile phone provider, with almost half (49 per cent) of consumers stating they would switch to a brand like Amazon or Facebook if they could.

Younger consumers were even less likely to stay put than the general population, with 75 per cent of under 35s saying they’re planning to take their business elsewhere in the next three years.

Moreover only one in six consumers (16 per cent) have historically changed providers annually or more often, but this appears to be changing. When asked about why they would be more likely to switch, 59 per cent of the public are thinking of switching for a better deal, 21 per cent for better connectivity and 21 per cent because of a recommendation from friends and family.

According to Telness Tech, it is no coincidence that this wave of dissatisfaction comes amid rumours of price hikes and a re-introduction of data roaming charges for UK consumers. In fact, of those people who have switched in the past 12 months, most (59 per cent) did it for a better deal. The data also revealed a more values-focused consumer with a third (34 per cent) considering a provider’s behaviour and values while deciding who to custom with.

“Despite heavy investment plans, it is clear from the research that traditional telcos have misplaced confidence in their level of innovation and ability to retain their customers,” notes Sara Rasmussen, CCO of Telness Tech. “Telcos need to do a better job getting across to consumers the level of innovation they undertake, how much they are investing in their technology and what they plan to deliver by way of new products and services. ”

“The future is cloud-based platforms that allow telcos to innovate and constantly develop and deliver new services and pricing models. Consumers aren’t willing to wait around for a better deal of more interesting offerings – it’s high time telcos adapted to this new reality.”


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