With several lockdowns, the worldwide telecommunications sector responded to the issues the epidemic posed by enabling communication for work, school, healthcare, and social life. But with post COVID-19, what is next for the telecom industry?

Up until now, most telcos have tended to save their best smartphone or service discounts and incentives for new customers. However, GlobalData analyst Emma Mohr-McClune predicts that telcos will start turning that traditional paradigm on its head in 2023 by instead offering their best discounts and rewards to existing customers that use digital e-care and sales tools that do not need human agent support.

This prediction was made as part of research by GlobalData’s technology team, which notes that telecom operators have tried for years to encourage customers to voluntarily adopt digital, self-service tools, apps, and platforms such as chatbots and e-care apps—as opposed to seeking human support in retail shops and hotlines. However, this strategy has thus far failed to reach the levels of participation that operators are looking to achieve.

Mohr McClune comments: “Most operators have yet to hit the 50% digital-to-retail sales mix, and only a few have succeeded in getting over half of their customers to download and regularly use their telco e-care app for all their query needs. This so-so success is large because the adoption of such tools has been presented as purely voluntary: a ‘smart convenience’. Yet, consumers continue to think of digital tools as lower grade and unsatisfactory, in comparison to traditional, human-based lines of support.”

GlobalData highlights that the weakening macroeconomic environment, combined with rising operational costs, is spurring telcos to go back to the drawing board and come up with new ideas to accelerate the ‘customer digitalization’ effect.

Mohr-McClune adds: “Promotions for customer digitalization could take many forms, from rewarding eSIM self-onboarding customers to offering discounts to customers that have had no exchanges with a human agent over a specific period of time. In addition, one-time fees for such human support may be introduced.

“As telcos look to raise prices again in 2023, we may even see some make exceptions for customers that have demonstrated a good adoption of digital tools, or even reward such customers with exclusive offers.”

A SIM card is an essential piece of kit for any telecom customer, playing a fundamental role in enabling mobile communication. Device authentication has been traditionally enabled through physical SIM cards, which hold a Universal Integrated Circuit Card (UICC) to authenticate a device onto a network. That is, until the arrival of the eSIM.

eSIMs eliminate the need for a physical SIM card—instead, device authentication can be enabled by downloading over-the-air network authentication credentials that can be permanently embedded into a device. eSIMs have been gaining traction rapidly, and are expected to be used in between two and three billion smartphones by 2025 according to GSMA Intelligence.

For consumers, the move away from a physical component enables remote provisioning, allowing users to set up their devices instantly without needing to visit a store or wait for SIM card delivery. For telcos, this improves their onboarding processes, simplifies logistics and removes the associated costs of supplying and delivering physical SIM cards to customers.