LONDON, May 18, 2017 /PRNewswire/ -- More than one third (37%) of CTOs and CIOs interviewed by EY see disruptive competition as the single greatest strategic challenge facing the telecommunications sector, according to the report, Digital transformation for 2020 and beyond. Nearly three out of four survey respondents (74%) place it in their top three challenges, followed by lack of organizational agility (47%) and lack of return on investment (37%).
Prashant Singhal, EY Global Telecommunications Leader, says:
"Over-the-top (OTT) communications players such as WhatsApp, Facebook and WeChat have redefined the customer experience in messaging and video services, luring traffic away from telco offerings such as SMS. These trends are playing in response to a market in which consumers and enterprises increasingly see value in multiservice packages, with quad-play and cloud packages driving new opportunities."
2020 strategic agenda
Operators are focusing investment through 2020 on digital business models and improving the customer experience to address new competition from outside the sector. When asked about their main strategic priorities, 39% of survey respondents identified customer experience as their number one focus area and 61% said it's one of their top-three initiatives. Digital business models emerged as the biggest strategic priority for 24% of those surveyed and a top-three priority for 71% of respondents.
Asked which digital services offer the best opportunities for incremental revenue growth, the survey respondents cite a wide range of service areas. Operator confidence in Internet of Things (IoT) services is rising, with 31% of respondents viewing smart home as one of the top three drivers of future revenue growth. Meanwhile, 37% see 5G as the network access technology with the greatest impact on the industry over the next five years, the number one answer when respondents were asked about technology trends.
Legacy IT impeding digital transformation
Turning to the obstacles facing operators on their digital transformation journey, legacy IT is seen as the main impediment to transformation — cited by 65% of respondents as a top barrier.
Adrian Baschnonga, EY Global Telecommunications Lead Analyst, says:
"Looking ahead, all players will have to strike a balance between more proactive support of the customer experience and more dynamic business and operating models to thrive in an OTT world. The rise of the software-centric operator, where IT is interwoven in the fabric of the business, will determine the winners and losers."
For access to the full report, visit: ey.com/telecommunications.
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.
EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.
This news release has been issued by EYGM Limited, a member of the global EY organization that also does not provide any services to clients.
How EY's Global Telecommunications Sector can help your business
Telecommunications operators are facing a rapidly transforming business model. Competition from technology companies is creating challenges around customer ownership. Service innovation, pricing pressures and network capacity are intensifying scrutiny of the return on investments. In addition, regulatory pressures and shareholder expectations require agility and cost efficiency. If you are facing these challenges, we can provide a sector-based perspective on addressing your assurance, advisory, transaction and tax needs. Our Global Telecommunications Sector is a virtual hub that brings together people, cultures and leading ideas from across the world. Whatever your need, we can help you improve the performance of your business.
About the report
The 2017 global telecommunications study has been conducted by EY to monitor and evaluate the evolving views of leaders across the global telecommunications industry. The survey drills down into perspectives from the industry's CIO and CTO community in order to explore the role of IT and networks and to examine how this is supporting long-term digital transformation.
EY conducted 39 in-depth interviews with participants from 36 organizations, supported by insights and analysis from EY's sector professionals and secondary research sources. The 36 organizations taking part this year account for annual revenue of US$421 billion and an aggregate market capitalization of US$603 billion.
EY Global Media Relations
+1 212 360 9261
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/disruptive-competition-is-the-top-strategic-challenge-for-the-telecommunications-sector-ey-survey-reveals-300459937.html