South Africa’s telecommunications companies need to rapidly evolve into diversified digital services providers or risk “being left behind” in an ever-evolving world.

The Covid-19 lockdown period has laid bare the legacy business of telecommunications operators as brick-and-mortar business-to-consumer stores were forced to close.

People were unable to do normal interactions with their providers, such as sim activations and sim swaps, leaving call centres under pressure.

“There was likely also less demand for general telco offerings as people switched to using collaborative online work services like Microsoft Teams and Google’s G-suite,” explained EY Africa telecommunications, media and technology leader Abhishek Kapur.

Telcos, like many other businesses impacted, are likely to face cashflow and cost management pressures if they remain as just a ‘pipe’ for calls, messages and data.

The tradition of selling data and SMS packages to consumers is no longer enough on its own, he said.

There is a need to bolster services with additional offerings fit for a new mobile working world in order to stay relevant and profitable, with an opportunity for a new growth story as a much wider digital services provider.

“As the working world has now changed for good, telcos must become much smarter and see themselves as problem solvers for remote workers and businesses that are struggling to adapt to this new world,” Kapur added.

There is an unprecedented opportunity to service the remote workforce as the business enterprise changes to offer business-to-business services on a large scale as many companies adopt remote working as permanent.

“Globally, EY sees a significant widening of traditional telecom basket of services to a deeper information and communications technology portfolio, and greater adoption of these solutions as businesses go digital.”

He suggested telcos provide services adjacent to their core offering, such enterprise data analytics, cybersecurity, cloud services and payments services enabled by blockchain.

“As these services mature and become more common in the future, South African operators are likely to need greater numbers of people and expertise to support the demand at scale,” Kapur concluded.