Telefónica Tech Is Raising the Bar for the Telefónica Group to Transition beyond Telecommunications

At a recent industry analyst conference, Telefónica Tech announced that it no longer sees other operators as its direct competitors, as it strives to now become the “leading next generation technology solutions provider and integrator” by 2025. Telefónica has been providing its customers with telecommunication services for over 100 years, going back to fixed-line phones, and is now branching out to provide a range of Information Technology (IT) services to complement its connectivity.

Recent partnerships and acquisitions have enabled Telefónica Tech to expand its portfolio of services and products from connectivity to the Internet of Things (IoT) and big data, and to cloud transformation and cybersecurity consulting, to provide industry-specific solutions to new and existing customers.

Telefónica Tech was launched in 2019, and despite being a relatively new initiative, is already seeing double digit YOY revenue growth. Telefónica Tech is working with customers to enable digital transformation to accelerate businesses and create an ecosystem of partners that are centered around Telefónica’s connectivity. These partnerships will allow for sharing of valuable information, knowledge, and experience, to offer customers the best solutions and support for their digitalization journey.

Telefónica Tech is setting itself apart from other operators with its new product and service offerings, and their traditional competitors will need to find their own way to break into the technology services space to stay competitive.

Through Telefónica Tech, Telefónica is no longer providing just connectivity. Recent strategic partnerships and acquisitions in adjacent markets have enabled Telefónica to expand its portfolio of products and services, implementing new technologies that complement its established connectivity competency.

A notable customer and partnership is with Geotab, a telematics service provider that maintains an immense data lake of more than 55 billion datapoints, collected over the last 20 years. Geotab currently serves 3.1 million connected vehicles in more than 150 countries. These vehicle data have been leveraged for many applications, including traffic route optimization, generating customer invoices for car rentals based on vehicle usage, building out an “accident prediction” Artificial Intelligence (AI) model, and even developing an accurate weather map based on vehicles’ temperature sensors, barometers, and windscreen wiper activation statistics.

Telefónica Tech has made great efforts to enhance partnerships with cloud infrastructure hyperscalers Google Cloud, Microsoft Azure, and Amazon Web Services (AWS), and provides its own cloud infrastructure and consulting services for each platform. BE-terna is a recent acquisition of Telefónica Tech, and is an Azure-based BizApps solution specialist operating in Europe. BE-terna has achieved inner circle status for Microsoft Business Applications and is seen as a Gold Partner for Azure BizApps, providing solutions across several industries, including manufacturing, processing, utilities, energy, and financial services.

Telefónica Tech works with its customers to develop customized systems at “The Thinx,” its IoT innovation lab, to develop and test technologies, ensure interoperability of devices, and validate certifications for regional standards. Artificial Intelligence of Things (AIoT) applies AI to the IoT to analyze the data collected through these connected devices, create predictive models to optimize systems, detect anomalies, and preempt incidents. Some systems can consist of millions of IoT devices, which would be otherwise unmanageable without a suitable, centralized management platform, which in Telefónica Tech’s case is known as the Kite Platform. This dashboard can cluster IoT devices based on their behavior, so independent systems can be managed separately, or it can provide a higher view of all devices.

Telefónica Tech hopes to improve user experience, operational efficiency, sustainability, and security through AIoT and big data analytics, digitalization, and cybersecurity offerings by “adding intelligence on top of connectivity.” Specialist consultancy services are provided to ensure customers’ transitions to their new services and systems go smoothly, that customers are provided with the optimum solutions, and they have the support needed at any stage of their digitalization journey.

Telefónica Tech’s offerings are presented to the market as-a-Service (aaS), for full or partial systems, depending on the needs of the customer. This flexibility enables customers to adapt their product and service subscriptions and choose from a range of services from a single provider as their business evolves.

Recognizing that it cannot compete with the hyperscalers in the cloud infrastructure space, Telefónica Tech has built strong partnerships with these companies, and pivoted to provide adjacent products and services to support businesses as they transition to the cloud. Digitalization is inevitable, though businesses must ensure sufficient cybersecurity measures are implemented during this process. Many businesses do not know where to start in this journey, which is where cloud infrastructure and cybersecurity consultancy services offer valuable information, education, and support.

Through its recent actions, Telefónica Tech has expanded its already large geographical footprint to provide business services further across Europe and the Americas. Offering a range of products and services built on its historic competency in connectivity is opening opportunities for Telefónica Tech to approach new and existing customers with tailored business solutions to enable, accelerate, and support customers’ digitalization journeys. Expanding to provide adjacent products and services shifts Telefónica Tech from being solely a telecommunication company to a technology innovator, service integrator, and trusted business partner.

In the future, we will likely see more operators evolve to become more aptly named “technology solution providers” to provide more products and services that complement the connectivity solutions they are already offering. As businesses evolve to become more digitized, they will require more knowledge, support, and the latest technologies to stay competitive. Telecommunications companies that can offer a more complete portfolio of solutions that complement connectivity will be able to stay ahead of their competitors.

Network operators will need to find their own route to becoming a technology service provider and will need to find a unique and competitive edge over existing companies to survive in this space. Building strong relationships with customers and partners that are reciprocal, i.e., sharing valuable knowledge and information that can be implemented in other instances, while providing high-quality products, services, and support built on prior knowledge and experience in the telecommunications space is imperative. This will create an ecosystem of partnerships where businesses can grow and evolve, while relying on the knowledge, experience, and support of the technology solution providers.