The telecommunications industry stands at a pivotal crossroads as 2G and 3G networks make way for 4G and 5G. This transition presents a golden opportunity for telcos to reimagine their strategies, leverage cutting-edge technologies, and tap into previously unreached customer segments. Cloud technology is at the core of this transformation, poised to revolutionise telco operations and service delivery, especially in regions where 2G still dominates.

The next billion users: An untapped opportunity

For years, telcos have been entrenched in fierce competition, driving down prices and offering increasingly commoditized services. In this landscape, differentiation has become challenging, and growth in saturated markets has plateaued. However, the global shift from 2G to 4G represents a unique opportunity for telcos to break free from these constraints and connect with a vast pool of new users who have yet to experience the internet entirely.

According to GSMA Intelligence, there were still 3.2 billion 2G connections globally in 2020. In India alone, over 250–300 million people continue to use basic feature phones as an alternative to smartphones, which remain out of reach for many due to cost barriers. For telcos, these users represent an enormous, untapped market. As 2G networks sunset, telcos have a critical window to connect these users to the digital world and transform their businesses.

The shift from 2G to 4G is more than a network upgrade; it’s an opportunity for telcos to redefine themselves as digital service providers and key enablers of the next wave of internet adoption. It presents the potential to offer life-changing internet services to billions while securing long-term customer loyalty and driving growth.

Here are three critical areas to set a course for success:

Craft a forward-thinking strategy with tangible objectives

As the industry witnesses the transition from 2G to 4G, telcos must move beyond their traditional role as basic connectivity providers and embrace a broader, tech-driven vision. This shift requires a change in mindset—telcos must see themselves as enablers of digital experiences that transcend voice and data. By doing so, they can unlock new business opportunities and deliver value-added services that attract and retain customers.

Also Read: The next communications frontier: Uniting 5G and VoIP in Southeast Asia

A prime example of this transformation is Reliance Jio in India. It successfully evolved its business and positioning as a digital life provider by offering a comprehensive suite of apps and services alongside affordable devices. Telcos aiming to succeed in the post-2G era must adopt a similar approach, focusing on innovation and customer experience to differentiate themselves from the competition.

Harness cloud solutions to drive growth and build loyalty

Cloud technology is a game-changer for telcos looking to reach new users and enhance customer loyalty. One key advantage is its ability to lower the cost threshold for delivering app experiences and multimedia services. This is particularly crucial in regions where affordability is a major barrier to internet access.

Thanks to the cloud-enabled platform, recent advancements have made it possible for even low-cost feature phones to run popular apps like YouTube and TikTok. The cloud-enabled platform allows devices as cheap as $15 to deliver modern app experiences and video streaming, dramatically lowering the entry barrier for new internet users. This breakthrough can attract billions of new subscribers while enhancing customer satisfaction and loyalty through richer user experiences and seamless access to digital services.

Create innovation services and diversify revenue streams

While the transition from 2G to 4G poses challenges, it also presents telcos with an opportunity to explore new business models and revenue streams. Cloud-native networks enable telcos to collaborate with partners across various industries, such as entertainment, digital advertising, and enterprise solutions. These partnerships can help telcos create unique offerings that drive growth and maintain competitiveness in a rapidly evolving market.

For example, by partnering with content providers, telcos can offer bundled entertainment packages that include streaming services, gaming, and other digital experiences. These offerings generate additional revenue and help telcos differentiate themselves in a crowded market.

Navigating challenges and maximizing returns

Implementing a cloud-first strategy is not without its challenges. Telcos must navigate complex regulatory environments, particularly regarding data privacy and network security. Additionally, they must balance the initial investment in cloud infrastructure with potential resistance from users accustomed to 2G services.

However, the potential returns are significant. By capturing even a small fraction of the billions of 2G users transitioning to 4G, telcos can drive substantial growth in Average Revenue Per User (ARPU). Cloud-based services also offer higher margins compared to traditional voice and data plans, positioning telcos for long-term success.

Also Read: Is Singapore 5G ready?

Embracing cloud technology allows telcos to maintain ownership of the customer relationship rather than being relegated to “dumb pipe” status by tech giants entering the connectivity space. By offering a comprehensive suite of services, telcos can remain relevant and competitive in an increasingly digital world.

Seizing the moment: The time to act is now

The sunsetting of 2G networks is pivotal for the telco industry. Those who seize the opportunity to undergo a fundamental shift in vision and strategy will be best positioned to connect the next billion users, provide transformative internet services, and cultivate lifetime customer loyalty. Industry leaders must embrace a cloud-first approach to keep pace with change and shape the future of connectivity.

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