TELECOMMUNICATIONSThe Rates of Success, Goals, and Future Priorities
of Digital Transformations, by Sector

The key ﬁndings for telcos
Only 22% of telcos have successfully
delivered a digital transformation.
This is below the cross-industry
average and presents real risks ofdeclining revenue growth anddisruption by digital players.

Top-quartile companies have theopportunity to extend their digital
capabilities and break away from thepack while driving innovation. Theirmain challenges involve improving agile
governance and devising an integrated
strategy—and they need to invest inthese success factors.

Understandably, the top focus fortelco digital transformation has
been on the customer experienceand customer journeys.

Leaders are now pivoting theiragendas to emphasize
innovation-based growth and thedigitization of operations andsupport functions.

Four key priorities for the future aredigital customer engagement, smart
network applications, digital
operations and support functions, andnext-generation sales and marketing.

Telcos show an increased focus on
ESG issues, especially around
reduction of energy consumption,client data protection, and cyber
resilience.

Source: BCG analysis.

The data in more depth

Rates of successin digitaltransformation

Source: BCG analysis.

Topics of focus
for telcos

Top priorities forthe future

The criticalhuman andtech enablers

The role of ESG
in digitaltransformation

RATES OF SUCCESS

Only 22% of telcos successfully executed a digital transformation,
signiﬁcantly below the cross-industry average
CASES BELOW SUCCESS SCORE (%)
10080

Telco data points
Telco

Telco sector
average: 7.1

6040

Cross industry

2021 cross-industry
average: 7.4

Woe zone (success score <6)
Worry zone (success score ≥6–<8)

20Win zone (success score ≥8)00246810
SUCCESS SCORE12021 BCG Global Digital
Transformation Survey overall

Telco sector

13%

52%

35%

16%

62%

22%

Limited value created(<50% of target); nosustainable change

Value created but total Target value met ortargets not met;
exceeded; sustainable
limited long-term change change created

Source: 2021 BCG Global Digital Transformation Survey.
Note: Survey question: “Across the following dimensions, please rate your organization’s digital transformation experience to date on a scale of 1 to 10, using the guidelines in the table below.”
1Success score is calculated from respondents’ answers on six dimensions of transformation: strategy; leadership; talent; agility; monitoring; and tech and data.

RATES OF SUCCESS

Top-quartile telcos performed strongly on four of six key success factors;
most companies struggle with integrated strategy and agile governance
DISTRIBUTION OF SUCCESS SCORES ON INDIVIDUAL KEY FACTORS1Integrated strategy with clear transformation goals

2

Leadership commitment from CEO through middle management3

Deployment of high-caliber talent

4

An agile governance mindset that drives broader adoption

5Eﬀective monitoring of progress toward deﬁned outcomes6

Business-led modular technology and data platform
Telco average

123456789106.9

1Lower extreme

07.9
6.6
6.2
6.8
7.1

Upper or lower quartile Upper extremeWoe zone (success score <6)

Worry zone (success score ≥6–<8)

Source: 2021 BCG Global Digital Transformation Survey.
Note: Survey question: “Across the following dimensions, please rate your organization’s digital transformation experience to date on a scale of 1 to 10 using the guidelines in the table below.”1
Success score is calculated from respondents’ answers on six dimensions of transformation: strategy; leadership; talent; agility; monitoring; and tech and data.

Win zone (success score ≥8)

TOPICS OF FOCUS

The top transformation priority for telcos has been customer experienceand journeys
Strategic objectives

Scope of digital transformation1

SHARE OF RESPONDENTS (%)

SHARE OF RESPONDENTS (%)

CROSS-INDUSTRYAVERAGE (%)

Customer experience and journeys

34

Improvement incustomer experienceand go-to-market

98

81

Growth and business model innovation

68

72

Digitizing support functions6862

Digital ecosystem and partnerships

66

65

Sales and market acceleration

66

71

29

Innovation and growthin the core and beyond

Supply chain

44

53

Marketing and dynamic pricing

41

54

New business venture

41

45

19

Performance improvement
through the operational
value chain

Building resilience via cybersecurity
and compliance

39

54

18

Performance
improvementin support functions

Digital manufacturing and operations

37

48

Digital procurement

3450

Source: 2021 BCG Global Digital Transformation Survey.
1
Respondents were asked to select all priorities that applied.

TOPICS OF FOCUS

Win-zone telcos have greater breadth of transformation focusScope of digital transformation

SHARE OF RESPONDENTS (%)
3 pp

19 pp

22 pp

97100

9 pp

9 pp

37 pp

886675

66

47 pp

41 pp

88667575

697575

16 pp

4 pp

10 pp

50
38

Customerexperience
andjourneys

Growth andbusinessmodel
innovation

Sales andmarket
acceleration

Digitalecosystem
andpartnerships

Woe- and worry-zone telcos (combined)

Digitizing
supportfunctions

Supply chain

Win-zone telcos

28

Newbusiness
venture34

34

Building
resilience via
cybersecurity
and compliance

Change of +5 pp or lessMarketinganddynamic
pricing

34

Digitalmanufacturing
and operations

Change of more than +5 pp

Source: 2021 BCG Global Digital Transformation Survey.
Note: Survey question: “From the list of most common digital outcome areas and enablers in digital transformation, please help us identify the scope of your digital transformation (select all that apply).”

382838

Digitalprocurement

TOP PRIORITIES FOR THE FUTURE

Nearly all telcos intend to invest in four key digital topics
PLANNED SHARE OF WALLET SPENDING ALLOCATED ACROSS DIGITAL TOPICS IN THE NEXT TWO TO THREE YEARS (%)1100

Digital customer engagement

2598

Next-generation salesand marketing

2098

Smart network management

2298

Digital operations andsupport functions
New business build

2178
12
Share of respondents allocating any investment toward each digital topic

Average share of total investment

Source: 2021 BCG Global Digital Transformation Survey.
1For example, the uppermost pair of bars can be read as “100% of telco respondents plan to invest in digital customer engagement, allocating an average of 25% of their total digital investment.”

TOP PRIORITIES FOR THE FUTURE

Telcos’ digital priorities: Digital customer engagement
Digital initiatives (bars indicate relative prioritization of initiatives)
360° customer view for uniﬁed and consistent proﬁle (dashboards)

1.00

Self-serving app (e.g., scheduling, cancellations, digital “know your customer”)

0.87

Customer support (e.g., chatbots, interactive voice response)

0.46

Multichannel communication

0.44

Data-driven churn management

0.35

Personalized oﬀer generation and product bundling

0.30

Digital invoicing and automated payments

0.11

Customer sentiment analysis

0.10
Relative prioritization for all telcos

Source: 2021 BCG Global Digital Transformation Survey, n = 41.

Top priorities for win-zone telcos

TOP PRIORITIES FOR THE FUTURE

Telcos’ digital priorities: Smart network management
Digital initiatives (bars illustrate relative prioritization of initiatives)
Smart network planning and rollout

1.00

Network function virtualization

0.91

Predictive and preventive network maintenance

0.64
0.55

Software-deﬁned network
Automated network performance monitoring and optimization

0.47

Anomaly detection for operation, administration,
maintenance, and provisioning

0.45

Network capacity planning (congestion prediction)
Automated resolution of network fault (self-healing)
AI/ML-driven trouble ticket action recommendation
Relative prioritization for all telcos
Source: 2021 BCG Global Digital Transformation Survey, n = 41.

0.36
0.24
0.20
Top priorities for win-zone telcos

TOP PRIORITIES FOR THE FUTURE

Telcos’ digital priorities: Digital operations and support functions
Digital initiatives (bars illustrate relative prioritization of initiatives)
1.00

Automated workﬂow management for service requests
0.70

End-to-end procure-to-pay digitization for procurement
End-to-end record-to-report digitization of ﬁnance activities

0.64

Automated fraud detection and prevention

0.62

End-to-end source-to-contract digitization for contracting

0.46

End-to-end hire-to-retire digitization (including integrated training) for HR

0.45

End-to-end order-to-cash digitization for management of accounts receivable

Relative prioritization for all telcos
Source: 2021 BCG Global Digital Transformation Survey, n = 41.

0.24

Top priorities for win-zone telcos

TOP PRIORITIES FOR THE FUTURE

Telcos’ digital priorities: Next-generation sales and marketing
Digital initiatives (bars illustrate relative prioritization of initiatives)
Multichannel digital purchase journey

1.00

Market intelligence and customer preference (e.g., social media analytics)

0.92

Automated lead generation and handling

0.42

Digital marketing

0.39

Microsegmentation-based targeted customer acquisition

0.38
0.26

Smart ROI optimization and A&P allocation1
Dynamic pricing and optimization

0.21

Search engine optimization and website traﬃc optimization

Relative prioritization for all telcos
Source: 2021 BCG Global Digital Transformation Survey, n = 41.
1A&P = advertising and promotion.

0.14

Top priorities for win-zone telcos

TOP PRIORITIES FOR THE FUTURE

Telcos’ digital priorities: New business ventures
Digital initiatives (bars illustrate relative prioritization of initiatives)
Providing digital services (e.g., marketing platform, data-driven
advertising and marketing)

1.00

Digital payments/wallets/mobile-only banking

0.85

Monetizing mobile network data

0.58

Building a collaboration ecosystem for new products and services

0.45

Providing edge computing infrastructure for OTT service providers
and application developers1
NarrowBand IoT network (e.g., geolocation of valuables, security sensors)
Extending last-mile connectivity (e.g., using drones to expand thereach of terrestrial networks)

Relative prioritization for all telcos
Source: 2021 BCG Global Digital Transformation Survey, n = 41.
1OTT = over the top.

0.38
0.28
0.23

Top priorities for win-zone telcos

THE CRITICAL ENABLERS

Telcos intend to invest across broad range of tech and human enablers
Nine out of ten telcos plan to invest in infrastructure and cloud enablement, AI and big data, andmodernization of tech architecture, allocating on average about 50% of their total digital enabler
spending to these areas
PLANNED SHARE OF WALLET SPENDING ALLOCATED ACROSS ENABLER DIGITAL TOPICS IN THE NEXT TWO TO THREE YEARS (%)192Tech92

Human90858218797472161510Infrastructure
and cloudenablement

77

Modernizationof techarchitecture

AI and big data

Cybersecurity

12

Modernization oftechnology
organization andoperating model

Share of respondents allocating any investment toward digital topic

9

New ways ofworking

7
New talent andleadershipmodels7
Continuous
learning

Average share of total investment

Source: 2021 BCG Global Digital Transformation Survey, n = 41.
1
For example, the leftmost pair of bars can be read as “92% of telco respondents plan to invest in Infrastructure and cloud enablement, allocating an average of 18% of their total digital enabler spending.”

5Integratedecosystems

ROLE OF ESG IN DIGITAL TRANSFORMATION

About 60% of telcos plan toincrease their investment in ESG(vs. about 80% of all companies) ...

… with slightly greater emphasison the E and S dimensions

Share of respondents planning toincrease/decrease/maintain investment
toward ESG in coming years

Leading digital initiatives being prioritized
to support E, S, and G goals

25

Moderately
increase

48

Maintain as inprevious year(s)Decrease vs.
previous year(s)390

Source: 2021 BCG Global Digital Transformation Survey, n = 31.

56

Environment

13· Reduction in energy consumption inoﬃces and buildings· Digital supply chain optimization~52

SocialSigniﬁcantlyincrease

CROSS-INDUSTRY AVERAGE (%)· Ensuring protection of clients’,
employees’, and/or customers’ data
· Improvement of employee collaboration
through digital platforms~50

Governance

TELCO AVERAGE (%)

SHARE OF RESPONDENTS PRIORITIZING (%)· Critical risk incident management,
building cyber resilience· Predictive risk analytics to ensure
improved preparedness and mitigation

~48

171

If you would like to discuss this topic, please contact one of the authors:

PATRICK FORTHVAISHALI RASTOGIManaging Director & Senior Partner, Sydney
forth.patrick@bcg.com+61 2 9323 5612

Managing Director & Senior Partner, Singapore
rastogi.vaishali@bcg.com+65 6429 2527

FRANCK LUISADASCOTT STEMBERGERManaging Director & Senior Partner, Parisluisada.franck@bcg.com+33 1 4017 1431

Managing Director & Senior Partner, Denver
stemberger.scott@bcg.com+1 720 800 9803