Telco transformation – more than just a rebirth

Written by on June 4, 2015 in Guest Blog with 0 Comments

A composite of various views of a monarch emerging from its chrysalis.

Many have compared telcos’ transformation from pure-play telco to digital players as a metamorphosis. You can see why: the weak, bloated caterpillar (telco) emerging from the chrysalis, reborn as a strong and beautiful butterfly (digital player). A fair analogy but one that perhaps does little to convey the massive pressure that telcos are under to transform the business model. Think, perhaps, instead, of the bullish caterpillar, preparing to emerge from its chrysalis, as spiders build webs all around it, ready for the butterfly to flap straight in to! That is the situation telcos find themselves in. They are striving to become digitally mature, leveraging the infrastructure and data that has been building for years to make new and emerging digital services. Meanwhile, the large Internet players – the Googles, Facebooks, Alibabas, etc – continue to flex their muscles, and strengthen their already-powerful position in the digital ecosystem.

The webs are multiplying!

The Google Fi announcement brought this struggle into sharp focus last month. The project is a test bed for Google as it dives further into data monetization – which has always central to its business model. Google can only track so much data about people via cookies on the web, but the Internet is now mobile-dominant. With its own network, and a direct billing relationship with the subscriber, Google gains operator-level data on how, where, when, and ultimately why people do what they do. This, of course, is all information that telcos have held on their customers for decades, but it was merely a by-product from delivering other services. Now, there is a widening recognition in the inherent value of data that they have been discarding for years.

The irony is that, while the large Internet players (LIPs) have surged ahead in data monetization business models, telcos actually hold a lot more comprehensive data, which the LIPs are trying hard to replicate. So why aren’t telcos capitalizing on this engagement potential – given that they know their customers better? The pressure really is on to develop business models that can exploit customer insights and, critically, provide end customers with an enhanced service offering. As Theresa Cottam, Telesperience, said in a recent blog about data-as-a-service: “There are many benefits to the customer of better use of data – not least that it could be used to provide a more delightful connected experience by stopping annoying irrelevant advertising or offers from bothering customers, while giving them more of what they want.”

Telcos operate under very different regulations from DSPs, but the signs are that this is changing. If the regulations do change, operators may become more confident to use their own big data analytics capabilities to start monetizing their customer insights. The technology is available today to provide a real-time understanding of each individual customer’s context. To succeed, operators will need to figure out – and quickly – how to use these advantages to add value to digital service partners and, ultimately, create a better (and more valuable) experience for end customers. Because while operators accept that the metamorphosis is necessary, only so much time can be spent in the chrysalis!

The spiders are coming!

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Katie Matthews

About the Author

About the Author: Katie is an experienced marketing communications professional currently working within the Cambridge technology sector, with specific interest in telecommunications. Her background is in journalism, and she has worked as editor and freelancer for a number of publications, including editor of a weekly in house magazine for the John Lewis Partnership. .

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