Arthur D. Little Report Outlines €200 Billion Digital Transformation Opportunity for Telecoms Sector

LONDON–(BUSINESS WIRE)–Arthur D. Little (ADL) today published a new research report
highlighting the need for greater digitalization in the global telecoms
industry. The TIME 2018 Flagship Report outlines the scale of the
digital opportunity, with analysis estimating that a ‘digital dividend’
of over €200 billion free cash flow awaits telcos that can successfully

Industry executives surveyed for the report confirm the findings. 73%
say that digital will add value to their businesses, with key benefits
including greater agility, increased subscriber growth and cost savings.
CAPEX spending on areas such as 5G infrastructure and the Internet of
Things is expected to require a 7% CAGR increase from 2017-2022,
outpacing forecast revenue growth. Consequently, failing to digitally
transform risks commoditization and disintermediation, leaving telcos
unable to invest sufficiently. As one senior executive put it bluntly,
“Digitalization – there is no other choice if we want to survive.”

The report highlights that acting now is vital if telcos want to
guarantee future success. However, becoming digital will require a
substantial shift, focusing on two key areas:

  • Enabling digital – investing appropriately to become more digitally
  • Embracing digital – making significant structural changes to
    organizational design and corporate culture as well as how they do
    business, attract talent and develop the right skills

Currently the majority of telcos are still at an early stage of digital
maturity – 33% see themselves at the “digital basic” stage, with just 3%
at the most advanced “digital expansion” level.

Jonathan Rowan, Partner at Arthur D. Little and lead author of
the report explains: “Telcos are self-acknowledged digital laggards,
despite our survey highlighting an overwhelming awareness of the
benefits of digital transformation. Until now there was little
quantitative evidence of these benefits, but our extensive financial
analysis highlights that it can deliver a ‘digital dividend’ of more
than €200 billion in operating free cash flow benefit, or put another
way, up to an additional 10 percentage points of EBIT. To enjoy this
dividend, telcos must balance technology and organizational/cultural
change, as well as adopting an agile and holistic approach.”

The ADL TIME 2018 Flagship Report is based upon interviews with more
than 100 senior executives, as well as deep analysis of the financial
performance of 190 of the world’s largest telcos. It is available from


Cate Bonthuys
Tel: +44 7746546773