Telco talent, delayering, & greenfield thinking: Takeaways from DTW 2022

The world has dramatically changed in the last 12 months. While the pandemic crisis is coming under control in most parts of the world, the Russian aggression against Ukraine is having serious global economic and political ramifications. The combined effects are being felt deeply across societies, enterprises, and the telecommunications industry. As many economies face recession, it’s even more important for the industry to focus on its core strengths: connecting societies and underpinning the digital economy’s growth.

It’s against this backdrop that TM Forum held its latest Digital Transformation World (DTW) conference last month in Copenhagen, a global event for network and digital service providers and their partners. The theme for this year’s conference was the blueprint for growth, focusing on what it takes to unlock growth that has been elusive for the telecom industry for more than a decade. Despite this backdrop of uncertainty, throughout the event—held in person for the first time in more than three years—we found an optimistic mood and a new commitment to make real change happen.

Why the optimism?

It’s not only that telecom services have become so vital. (Being a much-desired “commodity” actually is a great starting point for a business, regardless of the industry’s value creation challenges.) But it’s also about innovation, which was palpable throughout the event.

As the boundaries between digital platforms, telcos, tech companies, and hyperscalers blur, the conditions are right for deep-rooted change. DTW 2022 demonstrated what makes the industry unique, and what the professionals who work in our industry love: collaboration, coinnovation, cocreation, and stretching boundaries. Nobody who has felt the buzz on the conference floors, the energy in the sessions, and the intimacy in the many conversations could think anything other than, “Here, the future is being created.”

What was the big topic?

It’s hard to pick one, but talent stood out. While this has been debated as a “challenge” for many years, there’s plenty of opportunity as well. CEOs and industry leaders emphasized the urgency to address issues spanning recruitment, retention, and reskilling, as the industry faces a looming retirement cliff and competition for talent heats up. Nonetheless, we also heard real answers on how to address these challenges:

• With the launch of the Inclusion & Diversity Score (IDS), TM Forum and its partners (including Bain) have helped make this important topic measurable and actionable.
• With fresh ideas from innovators like Jio and Rakuten, who shared their approaches, there’s a lot for industry peers to try and test back home.
• With research and insights presented by academics, there’s clear low-hanging fruit when it comes to attracting graduate talent. But it’s also clear the industry has work to do to change its image in the eyes of recruits.

Across the conference, there was a recognition that everybody is facing the same issues, and we noted a renewed energy to work together to find innovative ways to address them.

What’s the next big idea?

In case you haven’t heard, “delayering” will affect everyone in the industry. Customers, investors, governments, and technology developments are pressuring our formerly tightly integrated industry to reassess the traditional telco model at a fundamental level, with many now separating into four layers:

• Infrastructure (fiber, towers, and data centers that underpin networks, which are becoming more advanced with software and intelligence baked in)
• Platforms (digital hubs with global scale through which most communication now flows; most telcos will find success forming partnerships with platform providers rather than competing head-to-head)
• Services (connectivity plus adjacent services, often sold through digital platforms)
• “Intimacy” solutions (digital services with specific applications geared toward consumers or industry verticals)

One thing made clear at DTW: This is not about slicing your company into pieces. It’s about understanding the industry’s evolving dynamics, decision cycles, culture, investments, and operating models, and how those elements can all be supported by an appropriate monetization strategy, operating model, and technology architecture. Whether this evolution is an opportunity or threat depends on your organization’s strategy and approach.

Is the industry picking up momentum?

If the activities at DTW and the growing demand for TM Forum membership are any indication, it’s clear that more industry players are making tangible progress in their journey from telco to “tech-co.” The Forum’s Open Digital Architecture—cocreated by industry leaders—is helping telcos work with the software community to build fit-for-purpose, cloud-native software foundations that unlock business agility and the ability to partner. We’re also helping a growing number of telcos unlock the power of data and artificial intelligence, including autonomous networks, which will bridge technology advances and business impact.

Many of these efforts were on display in the TM Forum “Catalyst” initiatives featured at DTW. These proof-of-concept projects have brought together telcos and other partners to cocreate innovative solutions in areas ranging from AI to sustainability to blockchain, with applications for product design, 5G network operations, customer experiences, sales, and more. We came away inspired by these projects, particularly the cross-fertilization of ideas between telcos and partners from other industries.

Lastly, as telcos form partnerships with tech companies for cocreation of value and growth, so too has TM Forum opened itself to the relevant hyperscale players, including Google Cloud, which recently joined as a member and was very visible at DTW.

All’s well?

Actually not. It was clearly and correctly stated during the event that the telecom industry remains too slow, cumbersome, and sometimes “old-fashioned.” This isn’t a technical challenge but a mindset challenge. So, we’d argue that shedding legacy thinking and seeking a bit of “greenfield in our minds” is what the industry needs. Now is the time for action, not further procrastination.

DTW in Copenhagen was a great start, with more than 3,000 energized attendees, 40 Catalyst projects, 280 speakers, and many innovations and solutions on display. So, while the industry has a lot of work ahead, we left the event certain that there’s good reason for optimism.

Nik Willetts is president and CEO of TM Forum. Steffen Roehn is TM Forum board chair and an expert partner in Bain & Company’s Telecommunications practice. Herbert Blum is a Bain partner and leads the firm’s Telecommunications practice.