At Management World 2013 in Nice, France, Keith Willets, the chairman of TM Forum, highlighted something that’s on the mind of every communications service provider (CSP): declining revenues. A lot of this decline isn’t from competition and certainly isn’t from a lack of demand, either. It’s from the radical changes in mobile usage habits around the world.
The drastic decline in SMS, amounting to about $30 billion in lost revenue last year, is one example that Willets mentioned. The text message is swiftly being replaced by IP-driven services like iMessage, leaving no room for CSPs to build new opportunities in the same space. Instead, as Willets explained, they need to look elsewhere.
The Customer Conundrum
Amid the panicking about changing consumer habits, there’s something even more important that’s fallen to the wayside: the consumers themselves. The telecommunications industry has six billion customers around the world, and Willets reminded everyone at Management World 2013 that telco is ranked in the lowest quartile for customer experience.
Changing the way CSPs interact with customers was part of Willets’s survival kit for this “digital storm.” He listed data analytics, real-time offers and bundles as being critical for operators to build a sustainable business and better relationships with customers.
Willets’ point was simple: if CSPs treat their customers well, they’ll be more tolerant and forgiving. In a world where CSPs are scrambling to create new revenue streams, the customer has to stay top-of-mind.
Overcoming the Paradox with Personalisation
What I heard from Willets’s speech was everything that Comptel has been working on. With traditional sources of revenue declining steeply, CSPs have to recalibrate by focusing on personal, customised offers that serve to engage, delight and sell to customers at the same time.
Predictive analytics should be at the core of this approach. If CSPs can use big data to hone in on customers’ behaviours and needs—and automatically and proactively leverage that knowledge for new business opportunities—then this era of sweeping change across the telco industry will clearly be change for the better.
Traditionally, the telecommunications industry has been separated by a common language: the language of business. CIOs and CTOs, along with their respective teams, have been controlling networks and performance optimisation, while CMOs usually focus on business growth objectives like sales, churn and retention.
What this means is that CIOs’ and CTOs’ performance is evaluated by different metrics than CMOs, so they are concerned about different things. When I attended Mobile World Congress 2013, I witnessed this firsthand. In one corner, communications service provider (CSP) CIOs and CTOs were discussing the impact of cloud, M2M and LTE on their networks. Meanwhile, CMOs and CEOs talked about consumer devices, apps and the latest movements in the market.
The hurdle CSP executives face now is that, to take advantage of the latest innovations and meet their respective objectives, they have to work closer together than ever before.
Painting the Big Picture
Within most CSPs, there are distinct silos. Teams from different organisations rarely talk about the same issues and aren’t often looking to solve the same problems. However, one issue that bridges this divide is customer experience. CSPs want to make sure that customer service is as good as possible. If you’ve delivered a great customer experience, your efforts are praised…no matter what team you’re on.
This is where CIOs, CTOs and CMOs have to discover common ground. As networks expand and markets change, CMOs are going to have to learn more about network optimisation, and CIOs and CTOs will have to start thinking about analytics, marketing and service personlisation. Thanks to technologically complex innovations like predictive analytics, marketing and technology are now inextricably linked.
I believe that every team can acknowledge that one of their top priorities is creating a seamless process that allows the business to define and maximise a customer’s lifetime value. By shifting the focus from network or business metrics to customer experience metrics, CSPs can change the dialogue between silos.
A Holistic Experience
In the telco industry, the future of networks is marketing and the future of marketing is networks. When a customer is using data across a network, CMOs now need to know how the data is being used. This allows for real-time, targeted marketing campaigns aligned with customer usage trends.
These kinds of findings would be impossible without the help of the CTO and CIO, as they track the performance and behaviours across a network. Likewise, advanced, automated marketing campaigns are going to impact networks in new ways.
By uniting silos with the common goal of creating a better customer experience, teams can finally break the language barrier and work toward shared objectives. This shift won’t just help revolutionise things for customers, it could help revolutionise things for CSPs, too.
Comptel will be at Management World 2013 in Nice, France from 14 -16 May. Stop by if you’re there and we can talk more about the future of CSP marketing!
All of these trends point to explosive mobile use and increased connectivity in Africa as a whole. So, what’s one of the biggest changes we can expect to see here?
A new boom in African creative industries
One significant shift that was highlighted at Mobile Web East Africa by tech website MemeBurn is occurring in television and literature. Traditionally, both of these industries have suffered from lack of art-based, educational programmes in schools and from a lack of resources.
The CEO of BuniTV and Buni Media, Marie Lora-Mungai, spoke at the conference and said that having mobile access to films will revolutionise the space. She hopes that filmmakers will be able to distribute their work much further than before and create pieces for mobile consumption.
Likewise, the vice president of marketing at BiNu, Mark Shoebridge, talked about how mobile will affect reading habits. At Mobile Web East Africa, he claimed that 70% of female readers who are using World Reader, an app for smartphones, are reading over a thousand screen pages.
Of course, there’s going to be a vast range of different needs among customers in Africa. Communications service providers (CSPs) will be hard-pressed to customise service packages and personalise their interactions to accommodate these trends.
To really meet the demands of the next decade’s mobile customers, CSPs will have to invest heavily in contextual analytics that can segment customers based on their individual behaviours when it comes to mobile data use. This way, no matter how vast the customer base or different the use cases, it’s possible to meet individual needs and prepare for the future.
Contextual Intelligence at Every Customer Touch Point
The telecommunications market has become increasingly data driven; it plays a central role and extends into all areas of people’s daily lives. Consumers and business customers alike are looking for services and applications that reflect their diverse and individual needs. Over-The-Top players (OTT) such as Facebook, Google, YouTube and so forth, are increasingly successful in winning the hearts, minds and wallets of customers, by offering the applications and services that meet customer needs ‘beyond connectivity’.
“Monetising the data” –topic has been hot for a while now in telecommunications and other enterprises. Monetisation in terms of growing the data traffic and revenue but also using the data for customer and network intelligence is a huge business opportunity and yet challenging to capture. We see data as a lever for the CSPs to connect emotionally with their customers at every touch point where they interact with their customers.
Such interaction include a specific, personalised campaign at the moment when the customer is most open for a new offering or a temporary capacity allocation for a heavy video upload need. Our consumer research, which we conducted in 12 countries across the globe by VansonBourne, December 2012 (will be launched prior to Mobile World Congress) , shows that nearly half of the consumers would be willing to pay for a temporary bandwidth boost or data consumption upgrade. Thus the potential is there and can be monetized by leveraging advanced and predictive analysis and automated decisions and actions to make and save money. In other words; by leveraging contextual intelligence at every touch point.
At Mobile World Congress we will discuss the topic in more details with concrete showcases. The business use case list is long, but we have chosen the ones, which on one hand can demonstrates quick business results and on the other, can help CPSs integrated their organizational teams.
Fredrik shares his analysis of advanced LTE markets – including the US – with focus on the impact LTE has on the profitability of leading service providers. Is there an monetization upside using analytics?
To book your seat send the meeting request with a specific reference to: “Right customers for LTE”. See you there!
For marketers in the ICT industry, the first quarter of the year is traditionally packed with key activities, which set tone and present the themes for the coming quarters. Mobile World Congress (MWC13) is one of those major events where most of us put a lot of effort to showcase something new and innovative that captures the attention of the public.
We thought that we were early with the preparations on the themes, spearheads and the actual marketing elements that we wanted to share prior to the event and at the actual event. We surprised our advertising agency with a reasonably well documented storyline and spearhead descriptions. So we all thought that we are ready for execution and have more than enough time.
When executing our plans, we once again met the same challenges as also the CSPs face when trying to seamlessly launch multi-device and multi-channel services, which their customers demand. Considering how fast the suitable tools and technologies develop, this might sound like a piece of cake. However, the variety of available devices, browsers and releases is endless, and the testing and fine-tuning the applications can be quite an exhausting task – especially if the application in question contains any additional elements besides text, still pictures or videos that are stored, for example, in YouTube.
The complexity of the CSPs’ service creation and delivery environments cannot even be compared to our small project. However, this served as a good reminder for us at Comptel, that the service experience consists of such a big number of variables that the solutions we develop to handle the provisioning and activation of customers and services efficiently and effortlessly are indeed needed.
Maintaining the current network investment pace is becoming impossible, and therefore CSPs are actively seeking ways to capitalize on data services and co-operate with OTT players to diverge the data revenue growth curve and offload mobile data onto their own or partner’s WiFi networks. It’s obvious that video drives broadband traffic. Therefore CSPs absolutely need to understand customers’ usage patterns, how they behave in the network and what their value for the CSP, to implement efficient segmentation tools that allow prioritising the customers who need more bandwidth.
There was also a lively discussion about the tactics of creating and offering data services, touching on topics like rapid and easy service creation, data and bandwidth bundles, add-on data packages, personalisation and quality of experience. These elements are at the center of the CSP’s radar screen, contributing heavily to revenue generation and monetisation. The life time span of data packages will diminish significantly, as customers expect a broad, personalised and frequently updated service portfolio to be available. In order to fulfill this requirement, analytics capabilities have found their way into the heart of the policy control and charging offering palette, providing customer insights, predictive capabilities, churn management tools and automated marketing campaigns executed contextually at the right time to the right customers.
The ubiquitously available policy control capabilities and tools were widely recognised as the mainstream future trend, going beyond the pure network-centric approach to devices, cloud, M2M, service delivery and OTT. In short, Policy is needed everywhere in the ecosystem. The implementation is very much business-objective and use case driven, dictated by the business and service requirements and the CSP’s existing network architecture. Depending on the CSP’s set-up, the implementation scope can be fulfilled based on policy control, charging, customer management and analytics functions. Policy control is needed to protect and serve your interests.
Over-the-top-players (OTT) have been seen as a big threat to the traditional Communications service Providers (CSP). In short, the traffic generated by the OTT players is congesting the communications networks in which the CSPs have invested hundreds of millions of Euros, while the same OTT players also bring home most of the revenue streams. The Telco industry has been discussing the topic already for quite a while now, and – as often – the market and business disruptions have been seen as a threat rather than an opportunity.
As an example, CSP executives around Europe and the Middle East gathered at a conference in January 2011 to share experiences on how to compete with Google, Skype and others, that is, the dreaded, revenue-hoarding global OTT players. (Source: Global Telecom Business). Other commentaries, such as this from Ovum, remind the CSPs that they should rethink their business model and become a part of the OTT value chain. The list of similar examples just goes on.
Let’s recall some of the earlier disruptions to see if there is anything we could learn. Although the Mobile Virtual Network Operators (MVNO) phenomenon was more or less a local disruption while the OTT players of today are truly global, there might be something worth noticing from those days. Many of the MVNOs in the early phase were established in an opportunistic manner to cash in on the disruption quickly, while trusting that the traditional CSPs will buy them out simply because CSPs should see them as a competitive threat. This also happened in many markets. After attempting to fight against the grain, many CSPs started to see the MVNO business model as an opportunity, although with the strong encouragement of regulatory bodies . Some CSPs have taken the role of selling the network assets to the MVNOs and some have built their own MVNO business to differentiate within specific customer segments. A good example of the differentiation strategy is E-Plus, who still in June 2012 was the jewel in KPN’s crown. E-Plus established its own MVNO, Ay Yildiz, with a segmented offering to several million (statistic vary from 2.5 to 4 million depending on the definition) Turkish people in Germany, who communicate with their relatives inside the country and between Turkey and Germany.
Some of the leading CSPs have taken similar steps in capturing the OTT opportunity rather than seeing it as a threat. Naturally, there are multiple approaches. One good example is Telefonica whose Jose Valles explains how Telco’s are in a unique position to take advantage of opportunities to facilitate OTT services through their relationship with users. The example by Zain Deputy CEO and COO, Hisham Akbar, is another instance of the CSP leveraging their competences and assets to build a whole sale service. Zain sells network infrastructure to other players to deliver a wider variety of OTT-type of services and applications to Zain’s customers.
Where there is a threat, there is also an opportunity. However, it often requires the courage to go for the opportunity instead of fighting the inevitable change.
The main driver for consolidating the network equipment under one vendor is obviously cost savings, although a network swap can be even seen as a green initiative . A similar trend is also evident in large scale IT system modernization programs, conducted through convergent billing or CRM deployments . There are even operators who undertake both network and convergent billing systems swaps simultaneously, to maximize the benefit.
Such major changes to the network come with their own risks and countrywide service outages are not uncommon. These outages can in-turn lead to substantial fines from the national telecoms regulator.
As many of our customers have noted, major network or BSS transformations have become less risky and more cost efficient with the help of a convergent mediation and fulfillment layer: The impact of a network on billing system swap is mitigated by a flexible convergent mediation system. A flexible fulfillment system can adapt to a new CRM system in a cost-efficient manner, without any effect on the existing network. When swapping networks and billing system consecutively, an independent mediation and fulfillment layer provides stability in the operations environment, enabling a controlled phased migration.
Increasingly, there’s discussion within the telecom sector whether unlimited data is making a comeback. In fact, in Wednesday’s blog post we highlight a story asking this very question. This made us wonder how our readers are striking the balance between happy customers and manageable networks. We invite you to share your thoughts on this by voting in today’s poll — and, as always, we welcome you to post in the “Comments” section below.
In June’s poll we surveyed the trendiest buzzwords circulating within the telecoms sector. “Analytics/Big Data” edged out with 43% of the vote, followed by “Customer experience management” with 38%. Rounding out the top three was “Innovation” with nearly 10% of the vote.
This month, we take a closer look at the poll’s trendiest buzzword to better understand what Big Data/Analytics means to you. Tell us what excites you most about applying Big Data/Analytics to the telecoms sector. We welcome you to post in the “Comments” section below as always.