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Microsoft Industry Blogs - APAC

The global telecommunications industry has changed rapidly over the past decade. No longer reliant on legacy revenue streams like fixed line, cable television, and mobile communications, telcos have expanded their business models and offerings. [1]

Leading Filipino telco Philippine Long Distance Telephone Company (PLDT), for example, invested 300 billion pesos over the last 10 years to roll out the country’s most extensive wireless network. [2] With the help of local partners, PLDT has been providing voice and data services, delivering WiFi access, and even offering a streaming entertainment service to residents in various provinces.

Nonetheless, global revenue from voice and data services has been predicted to fall by more than $50 billion from now till 2022. [4] This decline will likely be caused by continued consumer migration to Over-the-Top messaging and social media services, as well as data bundle price erosion. Meanwhile, digital businesses like Whatsapp have also been aggressively acquiring other communication capabilities in a bid to compete directly with telcos.

From service providers to industry disruptors

In preparation for these changes, telecommunication companies and leaders of associated industries have been investing extensively in technology and prioritising digital transformation. On a global level, some $1.3 trillion will be spent on this area in 2018 alone, with a
16.8% increase in marketing from the year before. [3]

This investment will not just be used to improve operations, but also create digitally-connected products to transform how people communicate. As such, it supports telcos in their foray into other digital services, turning them into disruptors to different industries. In return, digital transformation is expected to facilitate an estimated $8 billion increase to the Philippines’ gross domestic product. [3]

Indeed, digitalisation offers telecommunication companies an opportunity to go beyond traditional connectivity, opening them up to the possibility of re-establishing their market positions and re-imagining their business offerings. Although some organisations may choose to set up units dedicated solely to this avenue, most will partner with specialists, in order to tap on the expertise required to move into different verticals and offer various services.

With strategic objectives in mind, PLDT teamed up with Microsoft, pushing enterprise solutions such as Office 365 together with their own connectivity products in a package known as PLDT Cloud. [6] Besides new product offerings, this association has also presented PLDT as a cost-effective end-to-end partner for Filipino enterprises, thanks to affordable and scalable licenses from Microsoft. Riding on PLDT cloud, the company has closed deals with notable businesses in retail, manufacturing, and food and beverage industries.

The Digital Campus Suite was another initiative borne from PLDT’s partnership with Microsoft, and it has been supporting students in earning certifications for necessary information technology, in order to meet the growing demand of digital-driven industries in the Philippines. [7]

Another major player in the country, Globe Telecom has also been introducing cloud services to Filipino enterprises with the support of Microsoft. A success story from Globe and Microsoft’s partnership was Shakey’s, a pizza chain favoured by many Filipinos, which has seen marked improvements in efficiency and productivity since adopting Office 365. [8]
 

Digital transformation is expected to facilitate an estimated $8 billion increase to the Philippines’ gross domestic product.
Digitalisation in telecommunications business is expected to generate $10 trillion in value for five key industries globally over the next decade.

Telco industry’s evolution likely to continue

Despite the extensive change that the telecommunications industry has undergone, it has remained and will continue to be critical to the global and Filipino economy. Its influence will only grow as companies across different industries begin to further integrate cloud, mobile, and other digital services into their business models.

As it stands, digitalisation in telecommunications business is expected to generate $10 trillion in value for five key industries globally over the next decade, with the largest opportunities lying in areas such as information security, enterprise mobility management, and cloud services and analytics. [9]

With the co-development of new technology also likely to arise on the back of new partnerships with digital service providers, read more about how else the telecommunications industry within the Philippines will be impacted by digital transformation here.

REFERENCES:

1 –
https://www.telecomstechnews.com/news/2018/mar/19/how-telecom-sector-developing-times-digital-transformation/

2 – http://www.pldt.com/news-center/article/2017/08/08/pldt-strengthens-partnership-with-paptelco-to-provide-digital-services-to-more-regional-areas#.W0wJ0tgzagQ
3 – https://businessmirror.com.ph/phl-businesses-ride-the-wave-of-digital-transformation/
4 – https://www.telecomstechnews.com/news/2018/jun/21/why-mobile-service-providers-focus-on-reinvention/
6 – http://www.pldt.com/news-center/article/2014/12/03/pldt-epldt-firm-up-partnership-for-microsoft-office-365#.W0wIuNgzagR
7 – https://www.philstar.com/business/2015/08/26/1492525/pldt-microsoft-team-online-learning
8 – http://business.inquirer.net/206233/globe-telecom-brings-cloud-technology-to-ph-service-industry