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Can traditional telecommunications companies keep pace with rapidly changing technologies? A new KPMG study suggests the answer is mixed: telcos are making progress, but significant challenges remain.
The research surveyed 580 senior executives across 16 countries and found that among telcos that have proactively adopted new technologies, 58% reported a positive impact on business operations. Despite that progress, only 11% of executives said their company has a clear strategy for managing new technologies. Meanwhile, 79% expressed concern that their organisations will struggle to capitalise on opportunities such as over-the-top (OTT) services.
Cloud investment is the most common focus area, cited by 65% of respondents, followed closely by mobile (64%), marketing platforms (59%), and data and analytics (58%). This aligns with broader market trends that show major cloud providers continuing to grow rapidly. Nevertheless, more than half of executives (54%) worry their organisations are limiting investments to proven technologies and so risk falling behind more experimental competitors.
That caution can pay off for consumer technology giants with strong brands and margins, but for operators the stakes are higher. Telcos must balance prudent investment with the need to explore emerging areas such as wearables and the Internet of Things (IoT). The report notes real enthusiasm for leveraging new technologies to improve customer experience, but highlights a gap between intent and capability—especially given the vast volumes of billing and customer data telcos already hold.
Alex Holt, head of technology, media and telecoms at KPMG UK, warned that disruption is now a constant in the sector. Many telcos continue to operate large networks and customer service organisations built around legacy processes and staffing models, and these structures can block innovation. Holt argues the industry needs a significant cultural shift to adopt disruptive technologies effectively.
“To compete effectively, the telco of the future needs to be staffed with digital architects, data scientists and developers to remain agile,” Holt said. “The industry has considerable work to do to reach that position.”
In short, while proactive telcos are already realising operational benefits from new technologies, most companies still lack a clear, comprehensive strategy. To seize emerging opportunities—from OTT services to IoT and advanced analytics—operators must accelerate capability development, modernise organisational structures, and cultivate talent equipped to build and scale digital services. Only then can they turn cautious optimism into sustained competitive advantage.