The real challenge with legacy systems lies in their fragmented, non-integrated nature
As telcos grow and strengthen, their biggest challenge is typically managing costs — whether due to a growing workforce, expanding infrastructure, or the burden of maintaining legacy systems and applications.
Often this legacy architecture is the byproduct of years of mergers and acquisitions, or simply the accumulation of once-purposeful but now outdated solutions. More than half of telco operators still rely heavily on legacy infrastructure today.
We all hear talk about digital transformation, but what telcos really mean is the shift to fully digital operations — and at the heart of this shift is the transition away from legacy systems. However, when people refer to legacy infrastructure, it is often viewed narrowly as just “old” systems.
The real challenge lies in their fragmented, non-integrated nature — systems working in silos that cannot communicate or coordinate. This is the fundamental difference between making digitally integrated decisions around system architecture versus being locked into obsolete technology.
The impact of M&As and consolidation
The telco industry continues to experience significant M&A activity, leading to overlapping systems and duplicated platforms. For a CEO navigating this terrain, the focus may be on people, technology, and finances — but it’s the technology that will ultimately define operational destiny.
Telcos may find themselves managing three or four different platforms, each requiring integration and optimization. These redundancies breed inefficiencies, inflate costs, and squeeze margins.
Another challenge is that many of these systems are nearing or have reached end-of-life. This increases support costs significantly and maintaining them is akin to finding spare parts for a classic car: possible, but difficult and expensive.
Resourcing inefficiencies
Often going hand in hand with challenges around legacy infrastructure and the integration of multiple, disparate systems are talent and resource challenges as telcos grow and scale. Many telcos make the mistake of scaling their workforce prematurely, only to end up bloated and inefficient.
When knowledge is spread too thin across a large workforce and combined with attrition, critical institutional knowledge can be lost. At the same time, the more people you have managing all this expanded hardware, the greater the risk you’re not spending enough time focusing on your customer.
As telcos expand, they face increased expectations. Customers demand new plans and promotions to match those they see in the market. Service gaps become apparent during these growth phases, undermining customer experience.
Telcos that successfully navigate this complexity while scaling gain a distinct competitive advantage. Most of the time, the differentiator is a robust ecosystem of reliable technology partners with deep domain expertise.
You generally know when a telco is scaling effectively as their ecosystem of partners is scaling in tandem, enabling them to keep pace with market demands, deploy the right technologies, and grow with agility.
Fear of automation
A persistent bottleneck in the telco space is the fear, or at least hesitance around automation. The truth is, if a task is repeatable, high risk or time sensitive, it can and should be automated. While oversight and quality checks remain essential, the fear of automation lingers so a cultural mindset shift is needed.
The traditional approach to scale has been hiring more people to tackle more work, but that doesn’t hold up in today’s market. It takes vision to realize that what once took 25 people can now be done by two using the right solution. It will take a further shift in mindset and culture to achieve the stage where automation when telcos are scaling is natural.
Regulatory compliance
Another challenge facing MVNOs in particular as they grow and scale is the impact of regulatory compliance. Whether you’re a Tier 1 operator or a smaller player, ever-evolving rules around data privacy, billing transparency, network security, and customer identity verification are impacting daily operations and long-term strategy.
Regulatory bodies across different regions — from the FCC in the U.S. to Ofcom in the U.K. and TRAI in India — are ramping up scrutiny, introducing stricter guidelines, and holding providers accountable through substantial penalties.
The complexity intensifies as telcos expand their services beyond traditional voice and data to include digital services, financial products, and cloud infrastructure. Each new service category comes with compliance burdens, making cross-departmental alignment and real-time auditability essential.
Maintaining full visibility across disparate systems — especially in highly integrated or federated environments — is no longer a “nice to have.” The consequences of non-compliance are severe. Issues like reconciliation failures, revenue leakage, and billing inaccuracies become high-risk concerns.
For MVNOs, the key areas of vulnerability include security, process integrity, and billing accuracy, and they are all under regulators’ intense scrutiny. Penalties for non-compliance are not just monetary — they can derail growth and damage reputation.
Telcos and MVNOs alike need to view compliance as an ongoing strategic capability not a one-time project. Embedding real-time compliance monitoring into their IT architecture, partnering with experts, and automating audit trails will be key to staying ahead of regulatory demands.
The path ahead
Looking forward, we can expect to see more consolidation across the telco industry in the western world as operators have to reach maturity and that needs to be the focus. However, challenges remain as costs are rising and so are customer expectations.
The business case for 5G has not delivered, and significant investment in 6G is unlikely until existing 5G costs are recouped. Many telcos adopted 5G reluctantly, compelled by market pressure rather than clear ROI and monetization has fallen short.
We’ll also see continued growth of “as-a-service” models, whether network-as-a-service or telco-as-a-service. These models are gaining traction not only because they make financial sense, but because they allow telcos to tap into specialized expertise. With the right partners, telcos can access agility, scale, and innovation without bearing the full burden of ownership.
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