Future of Telco Report

Future
of telco
KPMG International
kpmg.com
Foreword
Today’s market conditions are creating challenging Signals of
times for telco players. Even though consumer change
revenue has been historically high, margins
are being squeezed because of the massive
infrastructure investment telcos made in 5G to
meet the COVID-19 spike in broadband demand and
anticipated explosion in demand driven by various
5G use cases. Competition has been heating up
from both traditional and non-traditional players.
Customer expectations and the market have been
shifting. And a looming recession and regulatory
pressures have been creating uncertainty.
To address these significant concerns, leading

global telco players have been taking big steps to
redefine their business and operating models. This Strategic
report discusses what they’ve been doing and how imperatives
they’ve been doing it.
This report describes four future telecoms business

models that are currently emerging around the
world. It identifies some of the key capabilities that
we believe are required to succeed in each model.
And it offers practical steps to help today’s telecoms
leaders envision — and create — the future.
Supported by case studies and based on KPMG

professionals’ experience working with leaders in
the field, this report lays out paths that can help with
future growth for telcos and clearly articulates the KPMG
risks and rewards that can be expected along the way. Connected
Enterprise
We hope this report provides telco leaders and
decision-makers with a clear vision of the future,
a greater understanding of the journey, and
practical steps to help accelerate and sustain the
transformation.
To learn more about the ideas raised in this

report — or to discuss your organization’s unique
transformation journey — we encourage you to
contact your local KPMG firm or any of the authors
listed at the end of this report.
The future of telco is upon us. We look forward to

Case
exploring it together.
studies
Mark Gibson
Global Head of Technology,
Media & Telecoms,
KPMG International & Principal,
KPMG in the US
Future of telco 2
© 2023 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved.
Contents
Signals of
04 12
change
Signals of Strategic
change imperatives
Traditional business models are Doubling down on network 13

being challenged 05
Focus on digital front-end play 13
Escalating customer expectations 06 Strategic
Enhancing managed services 14 imperatives
Hyper-competitive hyperscalers 07
Making the telco-to-techco jump 14
A possible global recession 08
Technology can create new opportunities —
and threats 09
Fulfilling the ESG agenda 10

Telcos likely can’t avoid stricter regulations
indefinitely 11
15 21
KPMG
Connected
Enterprise
KPMG Case studies

Connected
Enterprise
Connected capabilities can enable a winning Enhancing the financial operating model 22
operating model 17 Scaling up to capture the market 23
Balancing future-focused strategies with a Turning techco 24
connected approach helps drive better Case
performance 19 studies
Evaluating your capability maturity 20
Future of telco 3
Signals of Signals of
change
change
While change is constant in the telco business, the factors driving change
are constantly shifting. In this section, we identify and drill down into some
of the most significant market factors that should currently be on telco
leaders’ minds.
Strategic
imperatives
KPMG
Connected
Enterprise
Case
studies
Future of telco 4
1.Traditional business models are being
challenged
Traditionally, telcos have made their money by moving small and medium-sized businesses (SMBs), like Signals of
bits through the air and across wires in their networks. car dealerships and hospitals. The telcos could then change
And while doing so is still central to their mission, monetize different aspects of that system — from
telcos need to figure out ways to diversify and make apps to cybersecurity to hardware maintenance.
their businesses more profitable, because continually A primary concern with this idea is that hyperscalers
investing in infrastructure can limit profitability. could decide to do the private networks on their own
given their deep pockets.
Telcos have been trying to break into higher value-
added services for years, including through massive Telcos could also double down on their fiber play,
investments in areas such as professional services, possibly even taking control of tier 2 and tier 3
media/content, and digital advertising. But the track players that could bring more agility and local
record for such investments has been decidedly market knowledge to accelerate their growth and
mixed. Now, other options are emerging. For penetration in the SMB market. Again, the primary
example, some in the industry believe there is much obstacle is that hyperscalers could decide to make
potential for telcos to offer private 5G networks for the investment and crowd the telcos out.
Strategic
imperatives
KPMG
Connected
Enterprise
Case
studies
Future of telco 5
2.Escalating customer expectations
Expectations for both consumer and commercial intentional experiences. In our view, this means
customers have been intensifying. For consumers, simplicity of choice and the ability to seamlessly
that means wanting better and more flexible service, transact are becoming paramount. Virtual self-care
greater transparency in billing, and enhanced ease models can provide a rapid response to emerging Signals of
of use. On the commercial/B2B side, clients are network issues and preempt outages. Self-care change
looking for increasingly sophisticated connectivity can also give carriers greater reliability and lower
and data solutions without the traditional legacy array cost structures because humans aren’t
requirement to contact a call center or a sales rep. responding to calls about network quality. Indeed,
our research shows that 56 percent of telcos
Recognizing these customer signals, many telcos
globally have invested in creating robust virtual
are focusing on the quality of experience. For
self-care models.1
example, they are creating more automated and
Which [customer-related] factor has the greatest potential to change the landscape for the
telecommunications industry? (Select one.)
31%
Increasing expectations on quality
customer care (e.g., quality of
27% Strategic
imperatives
service, response times) 28%
33%
23%
Ability to meet the continuous
increase in bandwidth usage and
14%
reliability demands 21%
26%
Implications of the convergence
19%
of technology and connectivity 24%
integrated into every aspect of KPMG
people’s daily lives
19% Connected
19% Enterprise
16%
Growing concern around carrier 24%
trust with customer data
19%
13%
11%
A shift to an enterprise-wide 10%
customer-first mentality 14%
10% Case
studies
Total North America Europe ASPAC
Base: 308 customer-centric strategy decision-makers at telecommunications organizations; 51 at organizations in North America,
58 at organizations in Europe, and 199 at organizations in ASPAC
Source: A commissioned study conducted by Forrester Consulting, April 2022
1
Connected Enterprise Telco Survey 2022, a commissioned study conducted by Forrester Consulting on behalf of KPMG
Future of telco 6
3. Hyper-competitive hyperscalers
As the landscape evolves, there will likely be more direct competition between telcos and hyperscalers.
This should be a severe concern to telcos given how much money these hyperscalers spend, their in-house
talent, and their outsized ambitions.
The competitive dynamic between hyperscalers and telcos is changing quickly. To address this change,
some telcos are forming partnerships with hyperscalers to help get the most out of their networks and Signals of
services, as when Microsoft and AT&T came together to unite their 5G and edge computing efforts. change
Which [competitive] factor has the greatest potential to change the landscape for the
Expansion of service offerings 20%

into non-connectivity services 21%
(e.g., over-the-top [OTT]) 16%
21%
Enterprise transition to 5G
19% Strategic
backbone for communications
23% imperatives
vs. wired and Wi-Fi networks 9%
21%
16%
Growing B2B private enterprise 13%
network (4G/5G) service offerings 19%
15%
Emergence of 6G, Wi-Fi 7, and
15%
other low-power, wide-area
11%
(LPWA) connectivity solutions 21%
14%
KPMG
12% Connected
Up-the-stack solution offerings 6% Enterprise
driving stickiness for the
B2B/B2G customers
14%
14%
9%
New non-traditional service 9%
providers entering the market 16%
7%
8%
Hyperscalers crossing over to 17%
connectivity providers 7%
6%
Case
studies
Future of telco 7
4. A possible global recession
Inflation and interest rates are likely to continue to cases, telcos near or under financial distress may
rise and a recession is looming. In many markets, seek consolidation or even bankruptcy, potentially
rising interest rates will likely raise the cost of capital, creating important consequences across the entire
potentially impacting telcos’ borrowing capacity telecom ecosystem. Signals of
and access to fresh capital. For some telcos with change
As a result, some telcos have set up joint ventures (JVs)
weaker balance sheets, this could lead to a higher
with competitors to share the costs of deploying costly
risk of potential financial distress. Not surprisingly,
network equipment and expand their reach. Examples
many telcos are reexamining their capital plans, and
include AT&T’s October 2022 announcement to create
several aspects — from infrastructure upgrades to
a multi-billion-dollar JV with an unnamed infrastructure
the deployment of new 5G capabilities — are being
partner, and Vodafone’s recent announcement of a
reassessed and reprioritized.
JV with Altice, although not direct competitors in this
The impact of this may have ripple effects on market, to support fiber infrastructure in Germany.
other priorities. Slowing down the rollout of 5G Nearly three-quarters of telco leaders in our global
may leave the advantage open to competitors. survey say they are already investing in or planning
Delaying the upgrade of the vehicle fleet to electric to invest in JV network operating models.2 That has
may lead to missed net zero and ESG targets. allowed telcos to start to differentiate based on the
Putting off equipment upgrades may impact the services they provide, rather than just the connectivity. Strategic
overall resilience of the network. In some extreme imperatives
Which [economic] factor has the greatest potential to change the landscape for the
29%
Development of revenue-
generating solutions that exceed
23%
the cost of network upgrades 24%
31%
23%
Funding for network
upgrades and modernization
28% KPMG
Connected
26% Enterprise
20%
Case
studies
2
Future of telco 8
5. Technology can create new
opportunities — and threats
In our view, the most important — and costly — level of competition and the aggressive plans from Signals of
technology investments will continue to be network some key players, the promise of global connectivity change
upgrades. 5G has been central to telcos’ efforts through LEO satellite constellations is coming closer
to satisfy the bandwidth needs of residential to reality. And this is one of the only technologies in
consumers, but the cost of deploying it has been development today that could fundamentally increase
prohibitive. As for 6G, it requires the same massive telcos’ customer base, including rural populations and
investment as 5G and is still estimated to be 3 to 5 private enterprise networks.
years off. In addition, telcos should continue to focus
The entry of this kind of new competitor with global
on how best to use evolving tools like AI and machine
reach and different unit economics could upend
learning for service and operating improvements.
the industry’s investment and business strategy.
The technological disruptor that fewer telco leaders are Traditional telcos should explore how to embrace
talking about is the ongoing advancement in low-earth this technology before it can erode their existing
orbit (LEO) satellite connectivity. Given the current connectivity play.
Strategic
imperatives
Which [technological] factor has the greatest potential to change the landscape for the
Expanding capabilities related

43%
to emerging technologies 34%
(e.g., analytics, IoT, digital twin, AI,
machine learning [ML], automation)
46%
44%
16%
Increased cyber security 13% KPMG
risks/exposures
23% Connected
15% Enterprise
Case
studies
Future of telco 9
6. Fulfilling the ESG agenda
In our recent CEO survey, executives responded that The higher cost of energy is another impetus
the economic downturn required them to turn away for decarbonization, forcing many telcos to
from their ESG initiatives, with 50 percent saying consider how they might accelerate their energy
Signals of
they were pausing or reconsidering their existing or decarbonization plans and efficiency investments.
change
planned ESG efforts over the next 6 months.3 In our Almost three-quarters of telco leaders say they are
view, that move could backfire. As the financial sector investing in decarbonizing their business.4
moves to get behind ESG, we anticipate telcos will
One strategy to help telcos be more energy efficient
find that more significant proportions of their corporate
is consolidating real estate and retrofitting facilities.
loans and debt vehicles are tied to ESG metrics. For
Massive office parks and commercial buildings could
example, since 2019, Verizon has been the US Telco
be sold, and leases could not be renewed. Those
leader to offer green bonds and to date a total of
that remain in the network could be retrofitted to
US$4 billion in green bonds have been issued, with
meet the business’s new requirements and enhance
proceeds focused on renewable energy investments.
their environmental footprint. Another oversized
Verizon paid over US$20 million in underwriting fees
agenda item is expected be to retrofit or consolidate
to minority- and women-owned firms in 2021 and
central offices or telecom exchanges.
over US$5 million in fees to such firms in 2022 in
connection with its fourth green bond.
Strategic
imperatives
Which [ESG] factor has the greatest potential to change the landscape for the telecom industry?
9%
12%
Decarbonization mandates
7%
9%
Total North America Europe ASPAC KPMG
Connected
Enterprise
3
KPMG 2022 CEO Outlook, KPMG International, October 2022
4
Case
studies
Future of telco 10
7. Telcos likely can’t avoid stricter
regulations indefinitely
Most carriers had to sink many millions into early adoption to regulatory requirements and keep Signals of
complying with the General Data Protection developing policy at bay until time conditions permit. change
Regulation (GDPR) and other global privacy statutes.
One interesting regulatory development is that
These policies will continue to mandate carriers to
telcos are trying to unite globally to force big tech
establish more robust privacy and cybersecurity
to begin paying their fair share for network access.
controls across their networks, applications, and
In Europe, for example, telecoms are encouraging
operations than they have traditionally cared about.
regulators to establish fees that companies must
We are confident that cyber will continue to receive pay to help support infrastructure enhancements,
funding and attention, as it should. We also believe, given their outsized use of the system. If these
however, that in the current market, many telcos rules pass, some fees could also be used to fund
will put their heads in the sand and hunker down. increased privacy requirements.
That means they will be less likely to entertain
Strategic
Which [political] factor has the greatest potential to change the landscape for the telecommunications imperatives
industry? (Select one.)
24%
Constraints on data usage 24%
and access controls
11%
28%
23%
Spectrum availability and cost
20%
24% KPMG
23% Connected
Enterprise
22%
More government control 25%
over network operations
27%
19%
Case
studies
Future of telco 11
Strategic
imperatives
Signals of
change
As the signals of change put pressure on traditional telco business

models, we see various strategic imperatives emerging related to
each one. One of the primary challenges telco leaders face is to
decide how they will address the changes in order to enhance their
future growth potential.
Strategic
imperatives
KPMG
Connected
Enterprise
Case
studies
Future of telco 12
1.Doubling down on network
The key imperative to achieving success in this Some of that volume will undoubtedly come through
business model requires telcos to double down the adoption of new technologies. The rollout of
on core connectivity and network infrastructure. 5G (and, eventually, 6G) will unleash a range of Signals of
It requires sticking to what made them great and new apps and Web 3.0 technologies that will help change
focusing on delivering connectivity at scale, speed, drive network traffic. The adoption of Internet of
and high availability. Things (IoT) and smart devices connected to the
burgeoning virtual reality (VR) metaverse will
We believe this is the most straightforward path. It
bring exponential volume, while new connectivity
leverages existing capital assets and infrastructure
technologies like LEO networks could open up new
investments. It requires very little change in
geographies and customer markets.
operating or business models. The competitive
landscape is (comparatively) established. Customer New revenue models will also be essential. Some
expectations are well understood. connectivity players are already starting to focus on
becoming connectivity “wholesalers”— essentially
The challenge is that this model is likely doomed
providing infrastructure and Connectivity as a
to commoditization and continuously squeezed
Service (CaaS) to a range of emerging virtual and
margins without new growth in the network. To be
asset-light players. This is helping connectivity
sure, part of the allure of the connectivity play is Strategic
players lock in volumes and drive higher utilization of
that costs can be hammered down through scale. imperatives
their capital assets.
Yet connectivity players should still find new paths
to grow and increase network traffic if they hope to
make the model sustainable.
2.Focus on digital front-end play

This is a continuation of the Mobile Virtual Network commoditized sector. The reality is that the barriers
Operator (MVNO) model, which means the key to entry in this market are low. There’s a tendency
strategic imperative is for telcos to focus on the sales for new competitors to appear, push down prices KPMG
and marketing front end and leave the connectivity and then go bust. But the downward pressure on Connected
and most of the services to other players. MVNOs and margins and prices remains. Enterprise
additional “asset-light” models allow the telco to scale
Success at the digital front-end play can require
up or down as volumes and demand requirements
a significant partnership and alliance ecosystem.
evolve, thereby helping to improve overall margins,
It can also require a greater focus on innovative
reduce costs and drive simplicity. For example,
products and improving customer experience — in
Comcast, Spectrum Charter, and other traditional cable
some cases tailored to a specific set of use cases
providers have launched MVNOs piggybacking on
and patterns for targeted customer segments
conventional carrier networks. And small MVNOs like
or verticals. And players should be much more
Kore Wireless, Jasper Wireless, and others have set up
responsive in their operations and supply chain to
solution-specific MVNOs for IoT and other services.
help ensure they meet customer expectations.
These players focus highly on customer
Some will see this as a natural step towards
experience, but mainly at the front end. They are
becoming a fully digital technology company. And,
customer acquisition specialists and excel at
having removed the shackles of bricks and mortar Case
sales and marketing. Invariably, they rely heavily
infrastructure and pivoted around the customer, this studies
on connectivity wholesalers for infrastructure and
model can certainly help telco players enhance their
hyperscalers for services and to deliver the core.
value — both to customers and investors. However,
With fewer assets on the balance sheet, they tend
commoditization is also a big risk as players
to achieve higher margins and better valuations.
compete around subscriber numbers in a brutal fight
The challenge here is maintaining subscriber to the bottom regarding prices.
numbers in a highly competitive yet increasingly
Future of telco 13
3.Enhancing managed services
The managed services business model focuses Telcos could then adapt these new service areas to
on moving up the value chain, which makes it deliver similarly effective customer solutions. Telcos
imperative to offer a complete solution set to clients, in this model could start to offer IoT packages where
particularly business customers. But it also gives a certain number of devices are connected and Signals of
telcos a way to drive increased volume and traffic to managed (perhaps even monitored) for a flat rate, change
their networks. as with a collection of smart devices throughout
the home. They could continue to bundle managed
This model could manifest in a range of innovative
cybersecurity features into their consumer offerings
value propositions. On the business-to-business
and begin taking an increasing role in hosting the
side, telcos already offer solutions like managed
processes that underpin the smart home. With the
security services and managed network services,
emergence of gaming and other value-added, high-
such as Network as a Service (NaaS). Some
quality services demanded by consumers, telcos
are now tailoring these services within specific
can position their tiered connectivity and quality per
verticals to create unique solution sets centered
market demand in this area.
around connectivity for healthcare, banking,
insurance, manufacturing, and retail. However, the Managed services players could enjoy better
organization’s ability to become more connected margins and higher market valuations than their pure
across the back, middle, and front office can help connectivity peers. But that will likely require players Strategic
drive the success and sustainability of this model. to fully understand the needs and expectations of imperatives
In our view, that will be the key to uncovering new their business and consumer customers first. Then
services, building better ecosystems, creating they should develop a culture and operating model
insight-driven strategies, and delivering better that can deliver seamless, resilient, and scalable
experiences through more digitally-enabled services to help meet these expectations.
technology architecture.
We believe that the key to success in the managed
At the same time, market trends and skills services play will be the organization’s ability
shortages are driving large global organizations to to deliver innovative products and services on
rethink their networking strategies and look outside a digitally-enabled technology architecture that
to telcos to fill the gaps. A new trend is emerging enables seamless interactions and commerce.
where partners and suppliers fully own networking
The managed services model again helps move
and provide fully managed NaaS solutions. This is
traditional and incumbent telcos up the value
happening in multiple areas related to private 5G
chain and closer to becoming a digital techco. But KPMG
enterprise networks in healthcare and industrial
it also helps bring increased competition and an Connected
manufacturing settings. That said, telcos should
overwhelming need for a more customer-centric Enterprise
evolve and better position themselves to capture
culture and approach.
this new market segment.
4.Making the telco-to-techco jump

For many telcos, their primary, overarching strategic But it’s not likely they’ll accomplish this without
imperative is to fundamentally reimagine themselves partners like hyperscalers or other industry-based
as technology companies. And many of them are application solution providers. Essentially, telcos
Case
trying to call themselves “tech companies” as they are bundling networks and applications/solutions
studies
try to move away from their traditional branding as from partners to help them get to that coveted
network infrastructure providers. They are leaning into tech company branding. This is causing the lines to
that claim by launching new products and services become increasingly blurred as hyperscalers evolve
that help them move up the technology stack, their innovation strategies and advance their deep-
including private 5G networking systems in hospitals pocket agendas. At the same time, legacy telcos
and innovative city services. embrace a too-big-to-fail mindset.
Future of telco 14
KPMG Connected
Enterprise
Signals of
change
Digital transformation in telco requires adapting to a

connected operating model.
Strategic
imperatives
KPMG
Connected
Enterprise
Case
studies
Future of telco 15
The eight capabilities of KPMG Connected Enterprise
Telcos can benefit from adopting a set of fundamental capabilities to support the connected enterprise. These
capabilities can help telcos define a customer-centric approach to digital transformation that connects the front,
middle and back offices.
Enhancing these capabilities will help ensure that every process, function, and relationship of the organization is
focused on meeting customer expectations, creating business value and driving sustainable growth. Signals of
KPMG International research shows that firms that make a moderate or significant investment in all eight change
capabilities of the connected enterprise are two times more likely to deliver a customer experience that
exceeds expectations, successfully execute on one or more customer-centric objectives, and increase
ROI across one or more metrics.*
Insight-driven Innovative Experience-

strategies products and centricity
and actions services by design Strategic
imperatives
Seamless
interactions
and
commerce
2xImpact*
Responsive
operations
and supply
chain
KPMG
Connected
Enterprise
Digitally- Integrated
Aligned and
enabled partner and
empowered
technology alliance
workforce
architecture ecosystem
*Base: 1,299 professionals involved with customer strategy decisions
Source: A commissioned study conducted by Forrester Consulting on behalf of KPMG, 2018.

The research was conducted on a sector-specific basis. Case
studies
With the need for more connected and seamless digital offerings, what can good look like?
• Investing in the right capabilities to help drive effective digital-first ways of working and operating models.
• Connecting and applying these capabilities across the functional value chain.
• Making the most of technology with a platform mindset.
Future of telco 16
Connected capabilities can enable a winning
operating model
Organizations need to become increasingly connected, within their ecosystems, within Signals of
their enterprise, and with their customers and stakeholders. They should be agile and robust change
enough to launch new offerings to capture their focused market segment or segments. The
competition will likely be challenging, and new pressures will likely emerge, mainly related to
data privacy and regulations.
A winning operating model can require maturity in eight connected capabilities. These are cross-
functional and apply across the operating model. Telcos that are investing in these capabilities
are more likely to see overall success as they transform.
Capability Connectivity Digital front end Managed services Telco to techco
Insight-driven Leverage micro- Apply human- Use customer Analyze existing Strategic
strategies and segmentation to centric designed insights to help digital assets and imperatives
actions better target lead digital front drive autonomous data to uncover
generation, pricing, ends to simplify operations new opportunities
and packaging. the customer by offloading to create exciting
engagement manual, repetitive new products that
experience. management and interact to build a
operational tasks. robust ecosystem
of products and
services.
Innovative Drive usage in low Deliver seasonal Move beyond Develop new
products and hours and during campaign offerings fixed contract and business and
services low connectivity with minimal effort, performance to financial models KPMG
load to help while building bucket/time-limited to enable an agile Connected
bring additional capability tied to and flexible pricing launch of new Enterprise
revenue and various pricing for enhanced services and
increase customer models to help managed services offerings.
satisfaction. drive loyalty. to help accelerate
B2B growth.
Experience- Offer connectivity Develop an art- Design industry- Create a dynamic

centricity by with tiered quality of-the-possible specific B2B ecosystem of
design and a high level approach to services and new applications
of experience for engineering-led user solutions to unlock and experiences
specific services to experiences to help new business that can offer
help grow revenues accelerate digital value for enterprise incremental
within high- adoption and usage. customers. value to engage
paying customer customers. Case
segments. studies
Future of telco 17
Capability Connectivity Digital front end Managed services Telco to techco
Seamless Use digital to Deliver a digital Leverage digital Create tailored

interactions and help drive lead experience that tools to allow ease customer
commerce generation within enhances add- of onboarding and experiences using
SMB and mid- ons and helps self-management digital technologies
market segments. new customer of new managed and data that can
Signals of
acquisition costs. services while lead to increased
change
aligning workforce revenue and brand
skills to new recognition.
paradigm.
Responsive Use insights to help Focus on creating Employ analytical Extend operational
operations and create operational a customer-centric insights to enhance capabilities
supply chain agility and cost experience and cost of delivery to support a
effectiveness operational/eco- and support differentiated
while maintaining system capabilities differentiated Anything as a
customer designed to service levels. Service (XaaS)/tech
experience and meet customer experience.
network quality. expectations.
Strategic
Aligned and Refocus workforce Retool/reskill Align people Expand workforce imperatives
empowered on improving the workforce strategy to focus on to include expertise
workforce customer to help increase managed services in customer
engagement and organizational and the proper experience and
experience while “clock speed”. labor pyramid. rapid application
enhancing network building while
technology skills. creating a culture of
innovation.
Digitally-enabled Leverage the latest Continuously Use Explore new

technology network technology improve and digitally-enabled architecture
architecture for growth, along enhance technology platforms to enable
with robust digital digitally-enabled architecture to new applications KPMG
services for technology support automated and services Connected
rapid customer architecture to help service delivery as that support an Enterprise
onboarding and maintain a cutting needed. ecosystem of
self-service. edge. products.
Integrated Use new Create a secure Combine Consistently

partner and technologies application program operational engage with
alliance (like LEO) to interface (API)-based services with technology and
ecosystem cover remote framework that existing partner delivery partners
areas through a enables partners to offerings to open to complement
partnership and offer new services new, efficient ways offerings.
revenue share and offerings locally to deliver managed
model to provide without significant services.
basic connectivity. effort. Case
studies
Future of telco 18
Balancing future-focused strategies with a connected
approach can help drive better performance
Compared with followers, future-focused telcos are:
Signals of
change
More likely to harness data, advanced analytics, and actionable

4.0x insights with a real-time understanding of the customer and the
business to shape integrated business decisions.
More likely to engage, integrate, and manage third parties to help

3.1x increase speed-to-market, reduce costs, mitigate risk, and close
capability gaps to deliver on the customer promise.
More likely to interact and transact with customers and prospects Strategic
2.7x across marketing, sales, and service and achieve measurable results. imperatives
More likely to build a customer-centric organization and culture

2.6x that inspires people to deliver on the customer promise and drive
up business performance.
More likely to develop compelling customer value propositions

2.5x on price, products, and services to engage some of the most
attractive customers and drive profitable growth.
KPMG
More likely to create intelligent and agile services, technologies, Connected
2.3x and platforms, enabling the customer agenda with solutions that
are secure, scalable, and cost-effective.
Enterprise
More likely to design seamless, intentional experiences for

2.1x customers, employees, and partners to support customer value
propositions and deliver business objectives.
More likely to operate the business with efficiency and agility to

2.1x fulfill the customer promise in a consistent and profitable way.
Case
studies
Base: 62 future-focused customer-centric strategy decision-makers and 62 followers at telecom organizations

Source: A commissioned study conducted by Forrester consulting, April 2022
Future of telco 19
Evaluating your capability maturity
Each of the eight enabling capabilities are underpinned by a set of five sub-capabilities. One of
the first steps in defining a winning model is understanding your relative maturity in each sub-
capability against the required maturity to help deliver your winning business model. KPMG Signals of
offers three levels of maturity diagnostics depending on the needs of your business. change
Products and services
Market Dynamic Adaptive Network Product/Solution

research pricing engineering differentiation platform design
Insights
Strategic
Customer insights
Commercial Operational Workforce Enterprise
(B2B, B2C,
insights insights insights insights
B2G, etc.)
Experience Strategic
Brand Voice centered Product Continuous imperatives
Journey
experience experiential experience experience
orchestration
strategy design design evolution
Interactions
Interaction Digitally Digitally Digitally Commerce

orchestration enabled marketing enabled sales enabled service and payments
Operational
Operations
Procurement,
Engineering and Service Customer and
logistics and asset Field services
network operations management care operations
management
KPMG
Ecosystem Connected
Partner strategy Enterprise
Partner onboarding Service delivery Integrated Ecosystem
and ecosystem
and integration and governance business services orchestration
design
People
Redesigned Agile organization, Digitally
Modern Digitally
workplace/Working change leadership enabled
Enabling
workforce enabled HR
model and culture learning
Technology
Cybersecurity,
Architecture Enterprise service
Integration Modern delivery compliance
(scale, resilient, etc.) management
and governance
Case
studies
KPMG Connected Enterprise offers a set of tools and templates that can help translate the maturity
assessment into tangible strategic and operational blueprints, roadmaps and initiatives to help accelerate
your implementation of connected capabilities and ensure the success of your digital transformation.
Future of telco 20
Case studies Signals of
change
Strategic
imperatives
KPMG
Connected
Enterprise
Case
studies
Future of telco 21
1.Enhancing the finance operating
model [Global telecommunications provider]
The telecoms environment has changed. This leading US-based provider knew it needed to sharpen Signals of
its focus if it wanted to remain competitive. They wanted to standardize their processes, helping their change
organization and service delivery, enable new tech solutions, and better manage their data. Yet they were
being hampered by a lack of integration and coordination across their strategic initiatives. And finance
had identified several areas of deficiency in their organizational structure and service delivery model.
A practical blueprint for the future state of the organization was needed.
Professionals from KPMG in the US started by assessing the requirements, expected outcomes, and high-
level design decisions. A gap analysis then identified a portfolio of prioritized initiatives based on benefit
and complexity to implement. Cross-functional dependencies and existing transformation initiatives were
also considered. This led to developing a robust 3-to-5-year roadmap, supported by a rolling 12-month
integrated plan to help ensure the company achieves its desired outcomes.
KPMG professionals identified more than 100 actionable, quick-win opportunities that helped deliver
significant savings in the near term. The team helped reduce labor costs, improve strategic business
partnering and ensure consistent service across the organization. Supported by detailed future-state Strategic
process documentation and governance frameworks, our team showed the organization how it could imperatives
achieve its end-state vision, tracing its objectives to its original pain points and requirements.
KPMG
Connected
Enterprise
Case
studies
Future of telco 22
2.Scaling up to capture the market [Global
telecommunications provider]
This major US-based IoT player wanted to move quickly to expand into the global market. Customers were Signals of
asking for a bigger footprint, more consistent services, and a more seamless experience. Leadership change
recognized a massive revenue opportunity in providing global IoT connectivity services. But the existing
network was locally focused and not scalable to the worldwide market. Moreover, the organization’s billing
and operations centers did not meet local regulatory requirements in many markets. A global connectivity
strategy would be required to meet their goals and objectives.
KPMG in the US worked closely with the organization’s leadership to develop a massive US$10 billion target
revenue business case that included US$622 million in capital investments. KPMG professionals engaged
leaders from across the organization — IoT network, customer care, product development, legal and regulatory,
among others — to design a new operating model, including identifying global IoT network and billing solution
ecosystem partners, as well as an operational roadmap to realize the business case objectives.
The US$10 billion revenue business case and the capital investment portfolio were ultimately approved to
support the global expansion. The organization inked a new global IoT network partnership that promised
to deliver around US$200 million in savings in the first five years. New products to support end-to-end Strategic
logistics and edge computing solutions have been launched. And a new care operations target operating imperatives
model has been adopted to support global clients.
KPMG
Connected
Enterprise
Case
studies
Future of telco 23
3.Turning techco [Regional
telecommunications provider]
When one of Asia’s leading telecom providers decided to get into the platform business, they turned Signals of
to KPMG in Singapore to help them articulate their strategy. The company already boasted world-class change
internal capabilities that could quickly be adapted to develop new external service offerings and internal
value propositions. The organization focused on Analytics as a Service (AaaS) as a pathway to delivering a
market-facing CaaS offering.
KPMG professionals worked closely with company leadership to assess the organization’s current AaaS
capability and define a strategic blueprint. Capability gaps were identified. And a broader action plan was
developed to articulate key steps and design considerations to meet the opportunity. KPMG professionals
also helped the organization identify internal use cases for AaaS and to communicate the value potential
around the new CaaS services.
The organization is now continuing to evolve its internal AaaS capability and maturity to meet ongoing
customer needs. The KPMG team is helping the organization conduct continuous maturity evaluations
and improvements to its Agile AaaS service delivery model. At the same time, KPMG professionals are
exploring ways to work with the partner ecosystem to better monetize the CaaS opportunity. Strategic
imperatives
KPMG
Connected
Enterprise
Case
studies
Future of telco 24
Making it happen
KPMG Connected Enterprise for telco is an insight-led, client-centric approach to digital
Signals of
transformation. change
In KPMG professionals’ experience, there are a number of key considerations that can help telco companies
make faster progress on the connected journey:
1
Keep close to what your consumers want. The ability to think “outside-in” is key in building
a customer-centric business. Ensure you know and act on what your consumers want, need
and value; keep continually looking up and outside of the organization and industry to help
ensure alignment with some of the best consumer experiences in day-to-day life.
2
Do things in an agile way. Break changes down into specific steps, sequence and then
implement them. Keep standing back to assess whether the change has been successful in a
Strategic
“test-and-learn” approach. It’s about a series of small changes that together can add up to a
imperatives
significant and impactful transformation.
3
Build in resilience. Take on today’s challenges with resilience and determination, and
be prepared to expect the unexpected, fail fast and learn along the way. By developing a
connected enterprise architecture, you will find that your ability to change course at speed can
be significantly enhanced.
4
Keep it human. While embedding new technologies, such as artificial intelligence (AI) and
automation, is likely to be critical in developing more seamless interactions for consumers,
remember that you also need to keep the experience “real.” Many great organizations remain
defined by the quality and passion of their people and their sense of purpose.
KPMG
Connected
5
Make use of new technologies. Continually look at what new technologies are becoming
available that could help you serve consumers better or connect your business more Enterprise
seamlessly. Experiment with the opportunities available through cloud, machine learning
and advances in data science.
Case
studies
Future of telco 25
Transformation Signals of
never stops.
change
Neither do we.
At KPMG we believe that business transformation is too good an Strategic
opportunity to miss. Combining the right tech and the best processes imperatives
with people whose insight is as broad as it is deep, are essential
ingredients to successfully transform. KPMG has worked at the heart of
global businesses for many decades, helping our clients realize the full
potential of their people and technology and working together to achieve
real-world outcomes. Because when people and technology are in
harmony great things happen.
Making a world of difference:
KPMG people can make all the difference on your transformation KPMG
Connected
journey. Together we can help you to orient your business around the Enterprise
customer, optimize functions for a new era, manage enterprise risk and
regulation for a safer future, rise to a new level of value creation, and
create an environment for managing ongoing change.
Case
studies
The future of telco 26

Contacts
Mark Gibson Diogo Sousa
Principal, Global Head of Technology, Principal,
Media & Telecoms, KPMG International & Principal, Head of Telco Center of Excellence
KPMG in the US KPMG in Portugal
mgibson@kpmg.com dsousa@kpmg.com
Greg Corlis Levi Watters

Global Leader, IoT and Private Networks, Principal,
Technology, Media & Telecoms, KPMG International National Telco Lead
& Principal, KPMG in the US KPMG Australia
gcorlis@kpmg.com lwatters@kpmg.com.au
Huntley Bakich Darren Yong

Principal, KPMG Connected Enterprise, Principal, Asia Pacific Head of Client
Technology, Media & Telecoms and Market Development, Technology,
KPMG in the US Media & Telecoms, KPMG in Singapore
huntleybakich@kpmg.com darrenyong@kpmg.com.sg
Phil Wong
Principal, Strategy, Technology,
Media & Telecoms
KPMG in the US
philipswong@kpmg.com
Some or all of the services described herein may not be permissible

for KPMG audit clients and their affiliates or related entities.
kpmg.com/socialmedia
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we
endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will
continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the
particular situation.
KPMG refers to the global organization or to one or more of the member firms of KPMG International Limited (“KPMG International”), each of which is a
separate legal entity. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. For more detail
about our structure please visit kpmg.com/governance.
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization.
Throughout this document, “we”, “KPMG”, “us” and “our” refers to the global organization or to one or more of the member firms of KPMG International Limited
(“KPMG International”), each of which is a separate legal entity.
Designed by Evalueserve.
Publication name: Future of telco

Publication number: 138529-G
Publication date: March 2023

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Future

To address these significant concerns, leading

This report describes four future telecoms business

Supported by case studies and based on KPMG

To learn more about the ideas raised in this

The future of telco is upon us. We look forward to

Traditional business models are Doubling down on network 13

Fulfilling the ESG agenda 10

KPMG Case studies

Expansion of service offerings 20%

Expanding capabilities related

Total North America Europe ASPAC

As the signals of change put pressure on traditional telco business

2.Focus on digital front-end play

4.Making the telco-to-techco jump

Digital transformation in telco requires adapting to a

Insight-driven Innovative Experience-

*Base: 1,299 professionals involved with customer strategy decisions

Source: A commissioned study conducted by Forrester Consulting on behalf of KPMG, 2018.

Capability Connectivity Digital front end Managed services Telco to techco

Experience- Offer connectivity Develop an art- Design industry- Create a dynamic

Seamless Use digital to Deliver a digital Leverage digital Create tailored

Digitally-enabled Leverage the latest Continuously Use Explore new

Integrated Use new Create a secure Combine Consistently

More likely to harness data, advanced analytics, and actionable

More likely to engage, integrate, and manage third parties to help

More likely to build a customer-centric organization and culture

More likely to develop compelling customer value propositions

More likely to design seamless, intentional experiences for

More likely to operate the business with efficiency and agility to

Base: 62 future-focused customer-centric strategy decision-makers and 62 followers at telecom organizations

Products and services

Market Dynamic Adaptive Network Product/Solution

Interaction Digitally Digitally Digitally Commerce

Making a world of difference:

The future of telco 26

Greg Corlis Levi Watters

Huntley Bakich Darren Yong

Some or all of the services described herein may not be permissible

Publication name: Future of telco

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Traditional business models are Doubling down on network 13

Fulfilling the ESG agenda 10