Digital Evolution in Telecommunications in 2017
Investment by the telecom operators in technology and interoperability has underpinned global connectivity, contributing to the expansion of the digital economy. Total mobile data traffic has grown 4,000 times over the past 10 years and 400 million times over the past 15 years (Cisco VNI Mobile Forecast, 2015-2020). Data convergence and the rapid increase in the number of connected devices have redefined every aspect of the industry landscape – enabling new entrant ecosystems to offer (and charge for) innovative mobile services while ‘riding on telecom rails’. The limitless appetite for content by consumers has forced operators to continue investing heavily in improving the infrastructure – only to be continuously benefiting OTT players rather than themselves.
Nevertheless, the industry that played a crucial role in enabling digitalization couldn’t yet translate it into new value for its stakeholders.
After a decade of growth, telecommunications today are under siege – challenged by crashing data tariffs, free calling, sinking smartphone prices, disruptive competition, strict and often capricious regulation. With revenues taking a hit, all incumbent operators share a common dilemma: Monetizing the connectivity, bandwidth and speed their networks provide to other participants in the bustling digital economy. To capture this new revenue opportunity, communication service providers (CSPs) are undergoing rapid change and transforming themselves into digital service providers, reimagining their business systems and creating next-generation offerings for their customers.
However, merely continuing to digitize customer processes will not be enough. To satisfy the expectations of modern customers and maintain relevance, the actual Telco user experience will need to be augmented to match how a consumer of today shops, orders taxi, consumes entertainment, pays for something and travels.
Key transformative initiatives to watch in 2017:
Delivering digital-native Core Services
To keep pace with the dynamic behavior of the modern digital consumer, a lion’s share of customer interaction will be done digitally. Telecoms will increasingly let go of the traditional call center and retail channels – switching towards digital, mobile and social channels. To accelerate such transformation, operators will seek to redefine digital-native architectures, build omni-channel capability, rationalize product catalog, and invest in automated care as a primary tool for customer service transactions.
As the delivery of digital experiences evolves, so too must the data analytics: service providers will apply advanced data modeling to better manage customer interactions, and more effectively personalize the digitized service delivery through these channels.
Digital Customer Journey
A critical tool at the heart of Telco digitalization is the ability to map the customer’s prospective journey in a proactive way. Digital touch points now influence users’ preferences across the whole experience. By tracking customers’ digital footprints step-by-step, throughout the entire interaction, operators can reach a much deeper understanding of the customer’s needs – connecting siloed customer information into a single point-of-truth, zooming into paths that matter and delivering relevant digital experience with acute precision.
Hard-pressed by the disruptive digital providers of anytime, anywhere, telecom operators of 2017 must embrace micro-moments, by offering a portfolio of ‘mobile moment’ experiences that will enable new customer interactions through push notifications, instant messaging, services on connected devices, chatbots, virtual assistants and beyond. Building these experiences must be augmented by new technologies such as machine learning and artificial intelligence. Operators will keep launching new digital services, either proprietary or through OTT partnerships. Other areas of expanding digital experiences require the opening of their networks with APIs and enabling the creation of next-wave applications and services by other digital players.
ascent Innovation Avenues
As more things get increasingly connected to the internet – more than the total number of human beings on Earth – the “Internet of Things” will expedite the next step in transformation. 2017 will see telecoms provisioning platforms for diverse types of connected devices, duly enrolling billions of new subscribers. Actually, things are set to become ‘subscribers’, with mini-subscriptions of a few dollars per ‘thing’ representing a vital revenue opportunity.
To tap into this new market telecoms will need to secure the right investment in the right technologies and build the data-science capability to harness and analyze the deluge of real-time, in-stream data.
The next wave of IoT, often referred to as “Internet of Everything”, while still burgeoning, is expected to leverage hyper-connectivity and integrated intelligence in objects, networks, and systems to adjoin people, processes, data, and things. With smart cars, connected places and objects, Internet will be ingrained in everything that people do, and linked to the services they use – like grocery e-shopping done automatically by a smart fridge or insurance telematics based on driving behavior.
Virtual and Augmented Reality
With wearables galore, the future of mobile is marked by the augmented and virtual reality (AR and VR) experiences. Once AR/VR wearables graduate beyond gaming and entertainment, they are expected to disrupt the enterprise – particularly, in the areas of communication and collaboration, training and simulation, as well as in the reinvention of employee and customer experiences.
Mobility will drive further adoption of AR/VR. Telecoms will be playing a key role as bandwidth providers due to the massive bandwidth requirements of VR/AR. Mobile data revenue from AR/VR can turn out to be a gold mine for the operators. As technology evolves, VR/ AR content is set to become more advanced and engaging — with real opportunities for the telecoms to provide the platforms.
With the future introduction of VR/AR devices with cellular capability, telecoms will be well positioned do develop their own applications and content, and distribute products, services, and subscriptions via this new round of transformation. In 2017 telcos are expected to roll out VR/AR strategies and establish the provisioning of platform-as-a-service – to capitalize on being the first to market at this point.
Data – a Transformation Catalyst
A regular telecom business routinely generates incredibly rich data sets on customers and operations, as a by-product of its daily business. From location-based services and customer 360° view to predictive omni-channel customer experiences, pricing and operational efficiency – data provides a tremendous opportunity for the telecommunications industry to unlock business value.
With the maturity of data science tools and associated technologies, framed in the context of the right professional services model and expertise, this rich data could be captured and put to work, with the purpose of fostering “data businesses” and establishing new revenue streams.
SteppeChange believes the telecom companies should pursue an aggressive but focused data monetization strategy. It is essential that the strategy be pursued outside the core connectivity business – based on an unorthodox approach, with the intention of winning big or failing fast.
Silicon Valley based SteppeChange is a global provider of client-tailored, fast-to-market data science and technology solutions. Our solutions leverage the latest big data and machine learning technologies, uncovering value from dynamic, massive, entangled data sources. Click here to reach out, join a discussion and follow us @steppechange