The Top 6 IT Challenges For The Telecoms Industry

Telecommunications used to be about connectivity. Today, it is about experience, data and speed.

In a market shaped by 5G, IoT, AI and ever-rising customer expectations, telecom operators are under constant pressure to modernize — while still running complex legacy environments and complying with strict regulations.

The question is no longer whether IT transformation is needed. The real question is: where are the biggest risks — and where are the biggest opportunities?

Here are the top 6 IT challenges for the telecoms industry leaders should keep on their radar.

The Top 6 IT Challenges Shaping the Telecoms Industry

Digitalization: Customer Experience Is the Real Battleground

Customers (whether residential, small business or enterprise) expect speed, simplicity and full digital control.

Today, the primary concern for telecoms customers is to make the process (whether it’s about contracting, appliance replacement, tariff package change or anything else) as quick and simple as possible – no one likes to spend hours in a branch office. Thus, the use of digital devices in the field of customer acquisition and portfolio expansion can already be the source of competitive advantage for a service provider.

The ongoing trend is to move the customer journey into digital space:

• Customer portals and mobile applications can significantly improve the customer experience and reduce costs by enabling customers to manage their telecoms transactions at the time and place that suits them best – instead of time-consuming personal administration.
• Replacing paper-based customer communication with digital means also brings significant cost savings, as paper, printing and postage costs can all be saved.

But digitalization is not just about launching an app or a new portal. It requires backend modernization, process redesign and real-time data availability. Those who get it right gain competitive advantage.

Compliance: Regulation Is Not Slowing Down

One of the cornerstones of compliance for the sector is the protection of personal data, which, thanks to the GDPR regulation, has been a top priority since 2018 at the latest.

As service providers store and manage large amounts of personal data (think of customer databases with hundreds of thousands, even millions of records), maintaining GDPR compliance alone involves serious IT tasks. In this context, the GDPR-compliant registration of personal data and the appropriate anonymization of personal data in development and test environments are particularly important.

Compliance is no longer just a legal topic — it is an IT architecture question.

Legacy Systems: The Silent Risk in the Background

Many telecom operators were pioneers of IT adoption decades ago. Ironically, that early innovation now creates constraints: They still have tried and tested legacy systems in place that are less up to today’s requirements – these may include billing, CRM or even network management systems.

It often happens that behind the attractive and modern user interface used by customers, data is stored and managed by a decades-old technology – linking these two together is becoming increasingly difficult, and the slowness of outdated technology used at the backend negatively affects the frontend system and thus the customer experience.

Legacy systems are becoming increasingly difficult to scale, and their performance (most importantly, speed and reliability) falls short of today’s expectations. Operating these aging systems while integrating modern 5G/IoT technologies and AI/ML systems represents a challenge in itself.

Moreover, the number of experts who are skilled in these technologies is dwindling: The pool of experts that could be relied on to operate and develop these systems will soon retire. These systems are no longer taught at universities, so there is no fresh supply of specialists.

Also, the use of obsolete technology can often entail IT security risks (cyberattacks, data leakage, etc.).

Modernizing legacy environments while maintaining uninterrupted service is one of the sector’s most delicate balancing acts.

Exploding Data Volumes: Asset or Liability?

Telecoms companies store more and more customer data – this is fueled not only by the growth of their customer base, but often also by the fact that more and more data is available about a single customer (think real-time network data or IoT traffic).

But volume alone does not create value.

This huge amount of data needs to be captured and stored in the right place (integrated environments, not silos), the right quality (free from errors and duplications), managed in compliance with data protection regulations, and analyzed using tools that are easy to use for a wide range of users in-house which also imposes additional IT tasks on service providers.

High-quality data is also the foundation of AI initiatives. Without it, AI remains hype rather than impact. 

Utilizing AI/ML: Enormous Potential, New Implications

And of course, we cannot overlook AI. It is already reshaping telecommunications.

It was first utilized in customer service, quickly moving beyond customer service chatbots to processing large amounts of customer data. This enables operators to offer hyper-personalized services, supporting their cross-sell and upsell efforts – and also their efforts to predict churn better.

But AI applications don’t stop at customer services or cross-selling.

• AI is increasingly used to help with predictive network maintenance: AI analyzes real-time data from network equipment to predict hardware failures, enabling operators to replace equipment only when necessary. This can help reduce both maintenance costs and network downtime.
• Also, AI can help operators to plan their network expansions more efficiently – using machine learning models to analyze traffic patterns, user behavior, and infrastructure performance to identify areas that require investment. This supports smarter CAPEX allocation.
• AI can also help increase operational efficiency, from document processing and data transformation to the quick creation of internal knowledge bases – the opportunities are practically endless.

Of course, the utilization of AI has its own challenges:

• AI-driven systems cannot reliably function without comprehensive and high-quality data. If data is stored in silos, full of errors and duplications, AI will have a hard time using it.
• And no matter how useful AI can be, its application must always be transparent, safe and responsible: two-thirds of surveyed customers expect their service provider to be more transparent about their use of AI.

Instant Demand for IT Staff: Good People, Quickly and at Reasonable Cost – Is It Possible?

Each of the above challenges can trigger a sudden increase in the demand for IT staff. If, for example, rapid custom development is needed to respond quickly to a competitor’s move, and thus more people with experience in the sector and the right technological knowledge are needed, the traditional internal recruitment process often cannot keep up with demand. Also, the rapid shift to new technologies (5G, AI, cloud) has created a talent gap, with few experts remaining to operate and upgrade older, legacy systems.

In such cases, bringing in external expert resources with significant experience in the telecoms sector seems to be the only viable solution. Considering the insourcing trend across several sectors today, the Try & Hire approach may be a more viable option than traditional T&M to bring in external experts.

Closing Thought

IT in the telecom industry is no longer about maintaining systems. It is about orchestrating complexity — balancing modernization, compliance, cost control and innovation.

Operators who treat IT as a strategic capability will define the next phase of the industry. Those who don’t may struggle to keep up.

DSS in the Telecoms Sector: Decades of Experience

At DSS, we “speak telco”: After the foundation of DSS Consulting in 1998, our very first client was Magyar Telekom (now fully owned by Deutsche Telekom), the flagship of Hungarian telecommunications. Since then, we have worked with the largest telecommunications companies in Hungary–most of which are owned by major international operators.

Thanks to decades of cooperation with these customers, we have deep sector-specific business knowledge and a good understanding of the typical processes and systems used in telecommunications.

Let us briefly summarize our experience in addressing the challenges detailed above.

• Custom software development: We deliver solutions tailored to specific telecoms processes. For example, for Hungary’s leading operator, we built a data mining-enabled solution to predict network equipment failures, reducing unexpected outages and increasing customer satisfaction. We also developed a customer portal to better serve VIP customers and a single, automatically updated business databank using external and internal databases to support sales, marketing and segmentation processes. Typically, we use Java, .NET, Angular, etc. technologies.
• IT contract staffing: We typically provide developers and testers (individual experts or even entire teams) according to our clients’ needs. In each case, we effectively complement the customer’s project teams with staff having the required competencies.
• Software testing: We have extensive experience in manual and automated testing of almost all systems used in the sector (customer portals, mobile applications, web shops, etc.).
• Data warehouse and BI development: We have been involved in the development of Oracle-based data warehouses, data marketplaces or related ETL processes, typical reporting systems and dashboard solutions in the telecoms sector.
• Data quality assurance: By improving the quality of customer data and eliminating duplicates, we have helped to reduce the number of duplicate invoices, improve the efficiency of sales and marketing processes, and restore and maintain the data quality of various internal systems (e.g. billing and CRM systems).
• Data protection: Out of our two data privacy solutions, we are preparing for the implementation of our data anonymization software, DSS Data Anonym, at a leading telecoms operator – Data Anonym enables the use of properly anonymized data in test and development environments.

Is your company facing similar challenges? Why not discuss them over a great cup of coffee?

…Last But Not Least, Why Should You Work with a Hungarian Company?

Because Hungary has best-in-class software developers. For this, there is no better proof than HackerRank’s ranking based on their own statistics: Hungary ranks 5^th on the Best Developers list globally, head to head with Switzerland and Japan and well ahead of not only Ukraine, Bulgaria and Romania but also France, Italy, Germany and the UK.

Please click here to read more about our references in the telecommunications sector.