Predicted 5G roll-out in 2020, coupled with an increase in IoT adoption, will accelerate the telecom companies’ run towards digital transformation.

According to the latest report from EY titled “Accelerating the Intelligent Enterprise,” telecom leaders are optimistic about the digital transformation; however, their synergy in the application of emerging technologies at the network layer is lagging.

The report includes an analysis of 27 leading telecom companies and their digital transformation journey. Sixty-nine percent of respondents consider 5G and IoT as the most critical emerging technologies that are driving digital transformation over the coming five years. Automation and AI follow at 62% and 58%, respectively.

Telecom companies’ current use of digital technologies is more focused on customer-related gains as compared to network-related benefits, the report found. Forty-eight percent of respondents say improving customer support is the main driver for adopting automation. At the same time, 96% of respondents say that customer experience is the primary reason for analytics, and AI use cases over the next five years. The report stated that only 44% of telecom companies see network-related use cases as critical.

In the report, Tom Loozen, EY Global Telecommunications Sector Leader, stated that telcos are focusing on emerging technologies to benefit customers. However, the telecom industry continues to invest and spend on offering the best network. He further added that telcos need to take a holistic approach when it comes to adopting AI and automation. They need to shift their investment priorities and apply greater focus to use cases in less advanced areas like networks, added Loozen.

Furthermore, the report stated that the current approach towards emerging technology adoption is out of sync with telcos’ long-term ambitions. In the next five years, IT, as well as the network, is most likely to benefit from improved analytics or AI capabilities, as per 67% of respondents. Meanwhile, 46% of telcos believe that one of the biggest challenges is to maximize the adoption of automation. As per 67% of telecom leaders, inadequate talent is a crucial barrier to deploying analytics and AI, while 33% cited poor data quality.

According to Loozen, the pace of evolution across the telecoms industry is rapidly accelerating owing to the migration to 5G networks and the rise of  IoT. To be relevant to enterprise consumers, operators have to transform to achieve growth. They need to create a more cohesive workforce that thinks and collaborates across organizational barriers, he added.

Ninety-two percent of Telco admit they need to be more agile to realize transformation gains, while 81% agree they should adopt a more experimental mindset to gain from analytics and automation. Finally, around 88% of them believe that their organization needs a better grasp of interrelated digital transformation concepts.