As we know all too well, network evolution presents both opportunities and challenges for the mobile Communications Service Provider (CSP). Furthermore, says Adhish Kulkarni of Evolving Systems, as not all generational leaps are created equal, some shifts are more extreme than others.
Digitisation – what the industry is experiencing at present – is an example of this, with the arrival of new ways of doing business, the launch of innovative services and the requirement to develop far more impactful relationships with customers, all based on the emerging evolved network architecture.
The impact of digital has been significant on the ‘traditional’ telco business: Data usage has been commoditised, standard voice and messaging services have largely ‘disappeared’ into bundled offerings and many of the more lucrative commercial opportunities related to 4 and 5G have migrated away from the telco, to Over-the-Top players.
Put succinctly, what telcos have years of experience delivering no longer delivers the goods. Unprecedented revenue and profitability declines, widespread industry consolidation and a worrying downward shift in Average Revenue per User (ARPU) underline this. While the extent of these challenges differs from region-to-region, the broad problem is global.
Within this context, two questions become central. The first relates to understanding how the Digital Service Provider differs from the CSP, the former being what the latter is generally striving to become. The second is how to evolve operational infrastructure to enable telcos to flourish in the new commercial landscape. Legacy IT infrastructure, designed to support increasingly outdated ways of doing business, can clearly be a barrier to digital success.
Why? Because new and older applications often don’t work coherently together. Data centres as a result become mired in code spaghetti which impedes commercial performance. Operations management infrastructures become isolated siloes which result in untapped data leading to churn problems.
The question for telcos is, of course, what to do? While a lot of isolated decisions form part of the updating of network IT and infrastructures for digital success, these should be made with three core provisos always in mind.
In our view, they are:
Pro-active engagement is the new black! Dynamically monitoring real-time customer events and behavioural patterns for personalised customer engagement and offers is key. For the successful DSP, being able to succeed in this area of business will soon be table stakes.
Scale is still a headline. Scalability has always been a technical requirement but its demands are still expanding; exploding even. DSPs have to process billions of engagement transactions daily and then find new ways to monetise the information they generate, in real-time.
Measurement is the key to improvement. Competing more effectively starts with greater knowledge of how you’re competing. Getting performance transparency on offer update, revenue and other metrics in real-time is crucial to optimising sales and marketing efforts.
Reinventing how telcos compete in a digital marketplace will clearly involve a mutli-stranded transformation.
In our view a good starting point would be a focus on three areas of business:
Digital consumer engagement is critical, achieved through a combination of emotional (brand-led) and transactional (spend-led) active engagement concepts designed to create brand-attachment (stickiness), higher Net Promoter Score (NPS) and extended consumer lifetime (reduced churn). In the new telco, sales and marketing teams (animals which as little as two and a half decades ago barely existed) are now moving towards center stage.
Partner service monetisation is an urgent need. How telcos individually tackle the shift to ‘beyond the pipe’ partners will be central to digital service offerings. The notional era of ‘walled gardens’ is surely dead and buried. Solutions and infrastructures that can manage and monetise partner relationships will be just as critical as those that do the same for consumer relationships.
Dealer loyalty management must be optimised. The significant dealers channel is suffering because dealers frequently lack the right tools to support their eSIM and SIM sales related activities such as subscriber activation, inventory and logistics management as well as logging and tracking trouble tickets and sales reporting. Without a convenient integrated solution, dealers rely on paper for offers, reports and records – resulting in a host of costly problems.
It’s in the above, and other areas of their business, that the digital telco will likely need to strengthen both its performance and its enabling infrastructure. Almost certainly, sales and marketing department leaders will equal or even supplant traditional network and IT decision-makers when it comes to deciding the solutions and approaches most likely to deliver success.
There is no shortage of choices when it comes to which road to take but in many ways the market vendor landscape remains somewhat unclear. A focus on the key questions should help deliver the best answers.
The author of this blog is Adhish Kulkarni, SVP Solutions of Evolving Systems
About the author:
The author, Adhish Kulkarni heads the product organisation for Evolving Systems, a real-time digital engagement accelerator. With 100+ customers across 5 continents, Evolving Solutions empower brands to increase revenue per user, reduce friction, improve retention and maximise customer satisfaction. The company’s goal is to provide operators, brands and advertisers with the tools they need to manage their brand’s interaction with consumers over mobile.