South Africa’s Telkom Rides Digital Transformation Wave Toward Intelligent Operations

That was a key theme of a conversation between Simo Mkhize, Chief Commercial Officer at Telkom, and Scott Bicheno, Editor of Telcoms.com, during Huawei’s recent Operations Transformation Forum (OTF) 2024 event in Istanbul, Turkyie. Digital transformation was a major topic at OTF2024 – and especially digital transformation’s role in helping telcos achieve intelligent operations in the near future.

To understand the value of digital transformation to Telkom, it’s first important to understand the telco’s context. Telkom is the third-largest operator in the highly competitive South African market, with more than 20 million customers across its prepaid and postpaid mobile services, plus its fixed network broadband services.

“We are a strong market leader in broadband services in the market through our fixed wireless access offerings, which are very competitive and provide good value for money to our customers,” Mkhize said.

Despite that leadership position in broadband and the growth of its mobile offerings, Telkom faces stiff competition on both fronts from several other providers. South Africa is the world’s 23rd largest country by population, with more than 63 million people as of earlier this year.

Mkhizenoted that Telkom is one of five strong players in the South African market. The competition for market share has been complicated by challenging economic conditions in recent years that have hurt consumers overall. Those challenges have been further exacerbated by an ongoing energy crisis in the country. Mkhize noted the company has been spending levels decrease, and has also faced more obstacles in acquiring new customers in its postpaid business.

That said, Telekom continues to perform well overall: “We continue to be quite competitive in the various other areas of a business. And we're seeing good growth in our prepaid business.”

The company is not resting on its achievements to date, however. Mkhize emphasized the importance of Telekom’s digital transformation efforts not only to ensure its competitiveness and mitigate macroeconomic challenges, but as a major pillar of its overall growth strategy.

To that end, Mkhize said Telekom made an intentional decision that its digital transformation would be business-led.

“What I mean by that is we've identified three key areas [or] streams from a business perspective where we are saying digital transformation needs to help us solve these problems or these key areas for the business,” Mkhize explained.

Those three components of its business-led DX strategy include:

1. Accelerating speed to market for its product development strategy and pipeline. The faster it can bring new products and services to market, the faster the company can expand and enhance its revenue streams while also ensuring happy, loyal customers.

2. Driving digital channel growth and creating a truly omnichannel consumer experience. This means delivering consistent, unified experiences across both digital and face-to-face channels. For example, a prospective customer who begins their journey online should be able to complete their purchase or account opening seamlessly in a physical store, without restarting the sales process.

3. Expanding customer self-service options, including multiple digital and voice channels. “We are really trying to improve our customer experience by giving our customers digital channels as an option to engage with us on a self-service [basis], whether through WhatsApp, through the app, as well as through interactive telephone services,” Mkhize said.

The other headline topic at OTF2024 was intelligent operations transformation, and how it will enable the next phases of growth for operators worldwide. While intelligent operations transformation is ultimately its own area, operators like Telkom that have already embraced a digital transformation strategy are especially well-positioned to pursue new opportunities generated by AI – both for their customers and in their own network operations.

Indeed, Telkom is also pursuing an intelligent operations transformation strategy. At Telkom, that approach is informed by a “smart CAPEX” mindset. That means that, from a network deployment perspective, the operator is looking to apply greater intelligence to how it allocates and deploys its limited resources – in part to ensure its delivering maximum return on investment to Telkom shareholders.

Specifically, Mkhize said that Telkom is looking to AI to help the company make data-driven decisions around network deployment, as well as how and where the company transfers traffic between its different networks (such as when it migrates a customer from mobile to fixed), and in identifying where best to build incremental sites and capacity on its networks.

“It's really a big part of our business to use AI and intelligence to make much smarter decisions around our investments,” Mkhize said.