The telecom industry is facing a pivotal shift. As telcos explore the transition to “techco” models, they’re redefining how technology, automation, and new services can drive value beyond traditional connectivity. In a recent interview guided by Abe Nejad, Publisher of the Network Media Group, industry leaders shared their insights on the challenges and opportunities for telcos in adopting an “everything as a service” approach. This transition represents a significant departure from legacy models and promises new revenue streams, operational efficiencies, and technological resilience.
In the session, Udai Kanukolanu, Chief Revenue Officer, Rakuten Symphony, and Khoo Kang Wei - Head of Technology Strategy & Architecture, CelcomDigi, explored the potential of telcos shifting to tech-driven models. The leaders emphasized that techcos operate with technology at the core of their business, while traditional telcos rely heavily on human-centric operations. They highlighted new advancements, such as AI and automation, which allow machines to not only perform tasks but also make decisions – a game-changer in the drive toward operational transformation.
As declining revenues from traditional services plague telcos, they may need to look beyond data and connectivity. APIs are one of the ways telcos can generate new revenue streams, along with advanced technologies like cloud and network slicing, to tap into enterprise markets and enhance monetization opportunities.
The interview underscored the need for telcos to rethink investments by moving from heavy capex cycles toward innovation-focused expenditures. The leaders explained that while telcos traditionally allocate a significant portion of their revenue to capex, tech companies focus a similar proportion on R&D. By simplifying operations, consolidating resources, and focusing on automation, telcos can unlock cost efficiencies and disentangle growth potential from rising costs. Due emphasis was also placed on “investing smarter.” Instead of continuing with outdated, monolithic architectures, the speakers advocated for modernization to support advanced functionalities, such as analytics and network slicing, that drive diversified revenue streams.
However, transitioning to a techco model requires more than just technology. A shift in mindset is critical, as many telcos experience “organizational fatigue” from repeated transformation efforts. It is necessary to approach transformation as an economic discussion, aligning all stakeholders around shared goals rather than treating it purely as a technology initiative.
The journey from telco to techco involves upskilling staff and embracing a culture that supports agility. There is a heightened need for engineering teams to become familiar with modern technologies like Kubernetes, CI/CD tools, and microservices. This cultural and technological shift empowers telcos to innovate more rapidly and respond to changing market needs with greater agility.
“How do you break this cycle of capex and start to put money back towards R&D and innovation services? That to me is the crux of this transformation.”
“It’s not about spending, but it’s where we spend and how we actually spend it – much more smarter.”
The session outlined the urgency for telcos to begin transforming traditional approaches with technology-driven, service-oriented models that enhance flexibility and open new revenue streams. The key to success lies in starting small, experimenting, and scaling successful initiatives. In this era of “everything as a service,” the telcos that act with urgency and a willingness to evolve will be best positioned to lead the future of connectivity.
Watch the full interview here.
