In today’s world of digital identity, telecommunications companies stand at a critical inflection point. Across the world, telcos are under strain, caused by an intensifying supply and demand squeeze, pushing the industry toward commoditization. As traditional business models become harder to sustain, telcos must innovate and enhance their financial performance and cash flow to stay competitive.
However, as digital transformation accelerates across industries, telcos find themselves uniquely positioned to become the frontrunners in digital identity – transforming what was once viewed as regulatory burdens into strategic business opportunities.
Digital identity is set to transform the telecommunications sector, creating new opportunities for innovation and efficiency. In this article, we explore key use cases and explain why telcos should be taking the lead in driving this digital identity revolution.
“Digital identity, particularly the European digital identity, will enable telecommunication companies to unlock new possibilities, making processes like SIM card activation faster, easier, and more secure – across borders. With our EUDI wallet, users can seamlessly activate services in different countries, further enhancing security and user experience,” says Boris Goranov, CEO at Ubiqu.
The EUDI Wallet & its opportunities
The EU Digital Identity (EUDI) Wallets will provide a safe, reliable, and private means of digital identification for everyone in Europe. Every member state will provide at least one wallet to all its citizens, residents, and businesses allowing them to prove who they are, and safely store, share and sign important digital documents.
The wallet isn’t limited to proving your identity, age or showing your driver’s license: the new digital identity framework has a range of use cases, offering many new opportunities for the business sector.
Taking the lead in providing digital trust services and eWallets
Most importantly, telecom companies are in a strong position to become key providers of digital trust services and eWallets for government organizations. With their existing infrastructure, security expertise, and vast customer reach, telcos can offer reliable and scalable digital identity solutions that meet stringent government standards.
By leveraging their secure networks and authentication capabilities, telcos can provide digital IDs, eSignatures, and other trust services that enable secure interactions between citizens and public institutions. This would allow governments to streamline processes such as eVoting, tax filing, and social service access while ensuring high levels of security and compliance.
Additionally, telcos can develop and manage digital wallets that store verified credentials, such as national IDs, driver’s licenses, and health records, enabling seamless access to government services. With their experience handling sensitive customer data and complying with strict regulatory frameworks, telecom providers are well-equipped to offer these services at scale. By positioning themselves as trusted intermediaries between citizens and governments, telcos can create new revenue streams, strengthen customer relationships, and play a critical role in the broader digital transformation of public services.
B2C use cases
Rethinking SIM card activation processes
For customers, activating a SIM card has traditionally been a slow and inconvenient process, often requiring in-person verification and paperwork. The EU Digital Identity (EUDI) Wallet is set to transform this experience, making it faster, more secure, and entirely digital.
With the EUDI Wallet, users can verify their identity instantly and remotely, eliminating the need to manually enter personal details or scan documents. This enables seamless online activation of SIM cards and eSIMs, reducing fraud risks and removing the need for physical store visits. For telecom providers, this means a more efficient, cost-effective process while delivering a smoother, hassle-free experience for customers.
The benefits extend beyond national borders. Imagine someone from the Netherlands arriving in Spain or Germany and needing a local SIM. With a EUDI wallet, they will not need to visit a store or go through a separate verification process in each country. Instead, they can use their EUDI Wallet to authenticate themselves and activate a local SIM in seconds.
This seamless cross-border functionality will make connectivity more accessible for frequent travelers, expats, and business professionals while ensuring security and compliance for telecom providers.
Streamlining KYC operations
Additionally, digital identity solutions can enable telecom companies to strike the right balance between seamless customer experiences and robust security.
Regulations like Know Your Customer (KYC) and Anti-Money Laundering (AML) directives have long been seen as compliance challenges, but they are now driving practical innovation across industries – including the telecom sector. To meet these requirements, telcos have developed sophisticated identity verification systems that not only enhance security but also give users greater control over their personal data.
The introduction of the eIDAS’s EUDI Wallet will further streamline these KYC processes, reducing friction while strengthening security. Real-time identity verification will allow telcos to onboard customers instantly while conducting comprehensive background checks. This significantly lowers abandonment rates during sign-ups while maintaining strong defenses against identity fraud, ultimately creating a smoother and more secure digital experience for users.
Compliance & revenue streams: A dual opportunity
Telecom companies have a unique opportunity to both enhance fraud prevention and turn compliance requirements into a revenue stream through identity verification services. By preventing false identity creation, they strengthen security while simultaneously leveraging their verification infrastructure for new business opportunities.
Forward-thinking telcos are realizing that robust identity verification systems are more than just a regulatory necessity – they’re a competitive advantage. Many are now offering Identity-as-a-Service (IDaaS) solutions, enabling other businesses to use their secure authentication processes.
This dual opportunity allows telcos to not only combat fraud but also monetize their compliance investments. By providing white-label verification services, digital signatures, and secure authentication APIs, they can support third-party businesses while unlocking new revenue streams in the digital identity ecosystem.
Enhancing data communication
What’s more, the integration of digital identity solutions can extend beyond customer acquisition to improve core telecommunications processes.
“European digital identity will give us new enablers and possibilities for improving our existing business processes in telecommunication,” says Andrzej Ochocki, Head of Identity Management at Deutsche Telekom.
Beyond identity verification, the EUDI Wallet will also enhance data-sharing capabilities between telecom operators, regulatory bodies, and service providers. Secure and interoperable digital identities will enable automated transactions, simplify roaming agreements, and support new business models based on decentralized identity frameworks.
For example, telcos could offer customers seamless cross-border mobile services, allowing them to manage subscriptions, authenticate payments, or switch providers with minimal friction. By integrating the EUDI Wallet into their business processes, telecom companies can reduce operational costs, improve security, and unlock new revenue streams in the digital economy.
These improvements allow telecommunications companies to deliver more personalized services while maintaining end-to-end security in all communication channels.
Digital identity & telcos: a future success story
While challenges such as privacy concerns, evolving regulations, and technical integration hurdles remain significant considerations, the trajectory is clear: digital identity will become a cornerstone of telecommunications strategy, transforming the industry from connectivity providers to trusted digital identity custodians.
Telecommunications companies that embrace this shift – viewing digital identity not merely as a compliance requirement but as a strategic business enabler – will find themselves well-positioned for success in a transforming digital world.
