As communications service providers (CSPs) grapple with monetising user and network data, there’s a danger of being overwhelmed by the barriers and losing out on the tremendous opportunity that is shaping up on the horizon
When it comes to harnessing the analytical insights that exist in the network and customer data, CSPs might have started later than other industries. Yet, the nature of the data generated and held by the CSPs, gives them a significant advantage. It’s highly granular, has real depth and brings together the user’s location, their usage habits, their payment capabilities and many other attributes. CSPs have started to use this information to improve the performance of their own businesses and the experiences they provide their customers. However, a wider opportunity exists in transparently exchanging these insights with third party partners in a format that delivers a higher value proposition to the end subscribers – whether they belong to the operator or the partner.
“It’s clear that CSPs are motivated to monetise their real-time data in the same way as large web players do,” says Akil Chomoko, a senior product marketing analyst at AsiaInfo, “but from our recent research most CSPs feel they’re about two years behind the large internet players in the monetisation of customer insights.”
long as you have
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The research conducted by AnalysysMason, uncovered that when it came to monetising data, 62% of operator respondents believe they are more than two years behind the internet players. The research, which polled 50 CSPs globally, found that, while CSPs are used to mass marketing campaigns, only 26% of those surveyed currently have the ability to target a segment size of 1,000 subscribers or fewer. In addition, only 8% of CSPs can personalise messages to an individual subscriber.
However, monetising customer insights isn’t only about delivering targeted marketing messages. The breadth and variety of applications and use-cases is immense. CSPs in different markets take very different approaches. Some operators use the insights internally to improve customer experience or to deliver marketing campaigns for their own business. Some others share anonymised insights with third party businesses from various verticals, who lack analytical capabilities of their own.
Chomoko thinks it’s about defining a context and making relevant propositions based on that.
“For example, let’s suppose Operator X and music streaming service, Spotify, jointly launch an exclusive Spotify Premium product for young female music fans attending the Glastonbury Music Festival. This offer is specifically designed to target users of competitor streaming services, such as Napster, with an attractive real-time Spotify promotion,” he explains. “Advanced technology is available today for Operator X and Spotify to trigger targeted campaign messages when the female music fan accesses the music app on her smartphone, at defined points during the Glastonbury music festival.”
Chomoko gives another example of innovative use cases shaping up in the market.
“CSPs can provide customers with real-time insight into their data usage trends. This enables them to dynamically tune their monthly packages for specific type of content, quality of service / speed or usage needs – whilst still maintaining a budget,” he says. “This starts to empower subscribers to make qualified decisions.”
These examples barely scratch the surface and Chomoko says one European operator has more than 80 use cases for data monetisation under development. There’s clearly an appetite among CSPs but they face complexities in ensuring they comply with regional and local legislation, something highlighted by the research which found that although other problems exist, the greatest barrier to data monetisation globally is perceived to be regulatory constraints.
Particularly in Europe, with its multi-layered European Union directives and national legislation, regulation is the major barrier. Almost 60% of CSPs said it was the most significant impediment to rolling out services and propositions that monetise their data.
“In Asia Pacific there is less concern about usage of customer data whereas in Europe there is more guarded concern about privacy and a more cautious approach to using data,” adds Chomoko. “There are more regulatory hurdles involved in getting a proposition approved. In fact, at one operator in EMEA where we presented our capabilities, the operator found multiple use cases but we then had to work on every use case to show that opt in/opt out technologies supporting local laws were in place.”
Chomoko therefore finds it essential that CSPs ensure they have the correct systems in place to demonstrate and ensure compliance.
“As long as you have the business alignments and technical levers you need to be able to comply, you can get past the challenges,” he says. “You need to demonstrate security, encryption and data policies to address the rules correctly.”
In contrast, CSPs in the Americas and Middle East, considered technical constraints to be the most important barrier to wider data monetisation adoption. Yet Chomoko is happy that the technical systems required to monetise data, are available today.
It is clear that CSPs will move into a wider ecosystem in which traditional boundaries blur and intermingle.
“My view is that, in the long term, we could buy our network communications via lifestyle and multiple high level brands,” he says. “There’s no reason why you wouldn’t buy communications via Jaguar Land Rover or Amazon, for example, because they will provide connections in the car or devices via their marketplace. It is partners like these that will need access to a lot of real-time data for supporting the digital ecosystem, including enterprises and Internet of Things.”
“Our recent research has focused on promotions, upsell and cross-sell but in the partnering world it goes beyond marketing and promotions,” he adds. “It encompasses high-velocity data, customer experience, security, order management, settlement, fraud prevention, payments, and many other aspects. I see these as further dimensions to the data monetisation opportunity.”
