It is now or never for telcos: tap into consumer insights to win big in digital economy!
There is increasing consensus in the industry that telcos need to redefine their businesses in order to stay relevant in the fast evolving digital economy. Today’s consumers are able to access a vast number of lifestyle changing value added services with ease because of high speed networks, smart mobile devices and new digital delivery channels.
It is drastically changing their consumption behaviour and expectations. Industry figures reveal that telcos around the world have spent over $700 billion in infrastructure investment over the past ten years. But revenue growth has been almost flat since 2007, though data usage has shown growth. A large chunk of the telco revenue from voice and text services is now being diverted to the OTT players, who tap into the telco’s infrastructure to deliver their services. Wi-Fi offload is again a serious challenge to telco’s access revenue.
Digitalisation brings new opportunities
The new era of digitalisation is widely anticipated as an opportunity for telcos to get back to a time of profitable growth and, more importantly, deeper consumer ownership. With the number of mobile subscribers growing 2X the world population (source: Cisco ), telcos will potentially own the maximum attention span of consumers. Telcos are now in a unique position to capitalise on emerging trends in the industry as mobile traffic speed is expected to go up drastically and the smartphone ecosystem is set to evolve further to support a variety of novel digital transactions. They will potentially have the most holistic view of the consumer than any other enterprise. This provides them with an opportunity to play a bigger role in the digital economy.
Analyst community holds the view that telcos could potentially create broad array of new product lines and services around consumer data and analytics. They can remain as an infrastructure provider or play the role of ‘mobile consumer behaviour specialist’, enabling enterprises to offer better digital experience with aggregated insights. And telcos can even launch completely new line of lifestyle products and services in multi-sided platform scenario beyond communication services to healthcare, payment, commerce, etc.
Exchanging value in the digital world
Beyond connectivity, if telcos want to extend their value chain in the digital and connected world, then leveraging consumer insights is the way forward. It is tipped to emerge as the currency of value exchange between enterprises across the digital ecosystem. Telcos can enable a number of digital services that can bring better lifestyle experiences and benefits to consumers while creating new business opportunities for themselves and adjacent industries. Advanced analytics tools can excavate insights that inform the telcos on what the emerging trends are and where the shifts in consumer preferences and lifestyles are taking place. For example, insights on subscriber movement can help telcos determine the concentration of specific type of consumers in a particular location at particular time – young students in their preferred hang out place or middle aged women who shop during weekends on a specific street. This type of insight could benefit multiple industries like OOH advertisers and retail firms. A number of similar use cases are available and are being envisioned by telcos in an effort towards creating value for consumers and enterprises in the digital world.
Moving towards a connected world
With over 25 billion connected devices to be in use by 2020, the Internet of Things (IoT) will have a disruptive impact across all industries and all areas of society, says Gartner. As more and more devices get connected to the internet, telcos are provided with much bigger opportunity to monetise their data resources through third party partnerships. Virtually everything, from home appliances, transport, to wearable devices, will communicate with each other, exchanging data in one form or the other. Telcos will practically serve as insight factories as most of these communications will be channelled through a telco network. For a seamless connected experience for their consumers, telcos need to evolve new ways to collaborate with adjacent industries. The exchange and melding of cross-industry consumer data will create multiple revenue streams for telcos while enhancing the opportunities for other enterprises to engage with their customers.
The benefits of deriving value from insights are not just limited to organisations, consumers benefit equally from them. A richer, 360 degree profile of the consumers will not only make the engagement highly personalised but also help them discover product and services that they could never have found otherwise. This, along with getting the right service at the right context, will improve the customer experience significantly and transform the consumers’ lifestyles.
Addressing consumer concerns and creating value
For years, telcos have faced several restrictions in utilizing consumer data for business improvement. The good news, however, is that telcos can now eliminate these obstacles with the help of advanced technologies and permission based engagement. These sophisticated technologies support anonymisation of personal data and ensure that the data does not leave the telco premises. Moreover, consumers will be more open to the use of their data when they begin to see real value in the exchange. This will require, on the part of telcos, to come up with innovations and partnerships that make consumers’ lives significantly more convenient through customised value added services. For this to happen, telcos will have to share consumer insights with other industries in a controlled and tactical way.
Go deep in consumer analytics to push ahead
In digital economy, telcos have a different competitive landscape. They will be pitted against the likes of Apple, Google and Facebook in this race for consumer ownership. Many of these players have established their prowess in creating brand loyalty by providing better digital experience to consumers with intelligence delivered through consumer insights. Telcos so far have seen limited success in leveraging and monetising consumer insights due to lack of agility and reluctance to collaborate and bring in new business models. However, telcos realise this and many of them have already taken first steps towards creating an open platform for launching innovative digital products and services. They have unique advantages to bank on like strong regulatory compliance and proven infrastructure as well as consumer trust gained from serving them for years. However, the biggest advantage to them is their access to ever increasing volume of data generated by consumers. To gain better pace in securing their place in the new digital ecosystem they must fully embrace the power of analytics and tap its potential to open new doors of opportunity for them.