Telcos are growing AI skills – but not as fast as tech companies, STL Partners finds
4 min read- Most telcos are recruiting skills such as AI to operate more like a techco
- However, telcos are not recruiting in sufficient quantity to transform the ways in which they can create value
- They remain more than six years behind tech companies in building the future-proofing skills that enable innovation and agility, e.g., software
- Telcos’ lower penetration of software skills, in particular, limits their ability to operate and innovate like a techco
Telecom service providers are growing AI skills, but the significantly slower pace with which they are doing so compared to tech companies risks them being at a disadvantage when it comes to generating growth from this technology, according to the latest research from STL Partners.
In its latest edition of the ‘Future skills tracker’, the research house compares the preparedness of nearly 20 telcos and 10 techcos globally in embracing new types of skill sets in response to the rapidly evolving market conditions. These skill sets include software, network, cloud, data analytics, AI, cybersecurity, automation, user experience and innovation.
The company finds that 3.7% of employees that joined tech companies in the last year filled AI roles versus 1.1% in telcos. After software, AI roles were most recruited by tech companies last year – but they were only fifth in order priority at telcos.
STL Partners also discovers that telcos remain more than six years behind tech companies in acquiring the skill sets that would prepare them for the future.
“Tech companies are good at reconfiguring their human resources to support the creation of customer value with new technologies, while telcos cautiously test operational benefits for themselves first. This can disadvantage telcos on time to market, leaving them to play catch-up in valuable emerging opportunity areas”, comments Nicola Warren, senior analyst and author of the report.
Tracker findings suggests that there are some telcos that are bucking this trend, making good progress in overall future skills acquisition – even though they are not equally progressed across all skill categories.
Swisscom, Singtel and Telstra are prime examples, with their overall future skills penetrations exceeding 20 percent. Within new recruits, they have maintained a future skills share of around 27 percent.
Operators including Orange, Vodafone, T-Mobile US, Telenor and Telefónica have been found to have below-average penetration of future skills. Furthermore, their level of acquisition of such skill sets as a share of total new roles has not changed year on year, which suggests they need to further accelerate their resourcing efforts in these areas to make a difference.
The report also highlights the importance for telcos to focus on expanding software roles more than any other types to be more like tech companies because software is the main driver of customer value for techcos. While STL Partners’ recent research shows software roles now assume the greatest share of telco headcount (4.8%) of the roles measured, they do not dominate in the same way as they do at tech companies (19.2%). This area represents the biggest gap between telco and techco resourcing, and hence, value-creating capability.
“Telcos have been slow to capitalise on the digital opportunities of the past, waiting too long for these opportunities to prove themselves before building relevant skills. Tech companies, on the other hand, invest in skills early – ensuring their readiness to capture value when it presents,” Warren argues.
Find out more insights from the report by downloading a summary here.
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STL Partners is a leading research and consulting company that focuses on the telecom industry and adjacent markets by helping telcos and their partners innovate, grow and stay ahead of the competition.
