These are challenging times for telecoms operators. Their traditional ‘cash cow’, voice, is no longer lucrative and they are struggling to compete effectively on cost because the competition from rivals, prepared to offer cut-price tariffs to entice new subscribers, is so intense.
Brand loyalty is an elusive goal in this sector, says Kaz Jasnikowski of Talend, as telco customers regularly switch to alternative providers in a bid to obtain better deals. Chantal Cary, analyst at Ovum commented: “Churn rates among telcos have reached staggering heights and are climbing. Across all regions, telcos are seeing customers churn at rates as disparate as 1.5% to nearly 6% per quarter.”
The biggest threat telcos face however does not come from fellow operators but from the new breed of over-the-top (OTT) providers – companies like Facebook and WhatsApp that ride on the operators’ networks and make money by delivering services over them.
In fighting back, big data is potentially telcos’ biggest weapon. According to consultancy, Capgemini, “data volumes are expanding rapidly from increasing use of smartphones, clickstream data, signalling data from apps and M2M devices – all aided by better connectivity and faster networks.”
Unfortunately, many operators are still immature in their approach to big data. As Ovum’s Cary points out: “while more than 70% of telcos that have invested in big data have planned to apply big data analytics across the business, less than 20% … have been able to fully deploy analytics to support customer-focused initiatives.”
Telcos clearly need to start using data proactively to drive commercial advantage. The potential is huge. Operators can use the insight it provides to better understand customer preferences and behavioural patterns and apply that knowledge to develop tailored sales, marketing and campaigns designed to optimise profits. They can also use big data to achieve incremental revenues as they look to upgrade customers to new quad play bundles.
These are complex product offerings, however, and selling them successfully requires the cooperation of multiple different departments to ensure accurate, real-time data is deployed to the sales team to help inform the sale and to the service team once the sale is complete.
It’s a tough but critical challenge. Bundling products together can be a revenue generator for operators if they get it right. However, they risk losing the customer altogether and potentially damaging their reputation into the bargain if they get it wrong.
Another area where reputational risk is high is the contact centre. Too often, the performance of operators in this area is poor and customers have a negative experience being passed around different departments and repeatedly being asked for the same basic information by different agents.
Once again, to fix this problem, telcos urgently need data and they need to have access to it all in one place so that they can achieve a single customer view. Increasingly, too, operators are looking to tap into new revenue streams by analysing data that demonstrates how people use their mobile phones, and selling it – in an anonymised format, of course, to interested parties.
In delivering service to internal and external customers, it is of course critical that operators do so transparently and that they can demonstrate that transparency to the authorities, including the regulator, Ofcom. Typically, there are far-reaching challenges in terms of the way data is used today. Customers are often confused about precisely what they have bought.
Even more worryingly, the operators themselves are frequently unclear about exactly what they have sold to customers and often struggle to provide documentary evidence after the fact. That’s why having real-time access to the right data is so important both in terms of clearly documenting the sale but also in providing evidence of it to the regulator as and when required.
In order to deliver high-quality service offerings, telcos must also ensure that the bedrock and foundation of their business, their network infrastructure, is performing to optimum standards. Network performance is therefore another big issue for the operators, made more urgent still by the threat from the OTT providers.
This is a big data challenge. Operators need to use the data they have to pre-empt issues around network performance. They need to start analysing patterns of behaviour across the network and pinpoint areas that look unusual and may need to be proactively addressed before they turn into serious issues. Once again, the ultimate goal is to reduce churn and improve overall customer loyalty.
Get all the above issues right and telcos will drive improved customer engagement and loyalty; tap into incremental revenue streams that deliver enhanced profitability and build competitive edge. Get them wrong and they risk alienating customers, damaging their reputation and suffering severe financial loss.
The key to success is data. Telcos have vast volumes of it at their disposal but that in itself is not enough. If telcos want to embrace big data to improve network performance; enhance customer engagement; drive up loyalty and capitalise on new sources of revenue, they need a scalable value added integration platform.
After all, if they have the means to pull all of this data together and analyse it rapidly, they can use it to target customers more precisely; be more transparent; pinpoint network vulnerabilities and win out in a crowded marketplace. www.talend.com
This author of blog is by Kaz Jasnikowski, UK Telecoms Sales Lead, Talend.
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