How a ‘family first’ personal cloud strategy will benefit savvy operators
Now, more than ever, it’s important to remain connected. Especially in this “new world” characterised by a global pandemic, lockdown, and the missing of loved ones we need that contact we are so greatly missing, says Olman Tsoi Barber, SVP of product at Synchronoss.
Operators are well-placed to facilitate this connection, and ensure subscribers can keep in touch with one another, share memories, and don’t miss out on important life moments despite physical separation. Indeed, speaking in October Marc Allera, CEO of BT’s Consumer Division said that the telecoms sector had become ‘de-commoditised’ during the COVID-19 pandemic. That consumers had come to recognise the true value of their mobile, broadband and TV subscriptions.
Group chats, family Zooms, and online quizzes have become a staple in 2020. Exchanges reminiscing past holidays and creating, sharing and personal memories have all been done online and, often, via mobile. Not only has this changed the quality of our communication, but it has also tightened interpersonal bonds and forged stronger relationships in friendship groups and families. Pew Research reinforces this notion. It found that roughly half of families believe that web and mobile technologies improve the quality of communication with family members (fewer than 5% disagreed).
Subscriber challenges create operator opportunity
The massive increase in mobile interaction has resulted in challenges for mobile subscribers, including difficulties sharing large files or storing gigabytes of data, especially where active group chats with high levels of image and video sharing are concerned. Regardless of how ‘storage thrifty’ an iPhone user is, the chances are that their ‘free’ 5GB iCloud allowance is nearly spent. Indeed, of the OTT personal cloud providers only Google has substantially increased its free storage space since Google Drive launched.
For operators, these market dynamics deliver an excellent opportunity to either expand or launch personal cloud offerings. In giving subscribers the ability to store, share and create content on an ongoing basis, operators will not only be able to create new lines of revenue today, but will also be able to keep up with changing societal trends and subscriber needs into the future.
The reality is that operators are uniquely placed to provide a premium personal cloud service to consumers, thanks to the trust they have carefully nurtured over years and an exemplary performance over six very challenging months. This level of trust one rarely afforded to OTT cloud providers makes operators the go-to destination for storage, content sharing, and collaboration. It also accelerates the conversion of mobile subscribers into premium cloud users, thus growing the operator’s reputation and enhancing the relationship with the customer.
Expanding the potential of personal cloud
While personal cloud is relevant to millions of consumers across developed markets, there are segments to whom it is especially attractive. As many operators know, there is significant value in multiline mobile plans (also known as family plans). Globally, family plans remain a relatively untapped market, but the benefits it brings to the subscriber and the operator make it a ‘no-brainer’. Not least because family plans create levels of loyalty significantly above the norm. Churn rates among households with family plans tend to be 5x lower than the average churn rate.
Arthur D. Little predicts the global personal cloud market will be worth between US$15 billion (€12.64 billion) and $25 billion (€21.06 billion) in five years’ time. In the U.S. alone it’s growing at a compound annual growth rate of 12%. Compare this to industry analyst expectations of 2020 telecoms revenue growth in developed markets: Analysys Mason’s pre-Covid-19 forecast was for an increase of 0.7%. In April, the firm revised its expectations, predicting a year-on-year decline in telecoms revenue of 3.4%. In 2021, Analysys Mason is predicting just a 0.8% revenue increase.
Adding personal cloud to family plans further heightens stickiness and creates both short and long term revenue opportunities. Immediately, family plan members don’t have to worry about their existing personal cloud services filling up and can ditch these individual monthly expenses. Family personal cloud facilitates the sharing of all kinds of data and memories amongst these groups, reinforcing family bonds through shared experiences.
In the future, operators can use their personal cloud platform to host various applications. By making the personal cloud app the ‘hub’ for multiple daily activities, it will provide the foundation for the development of high quality, popular and engaging services in the future, create new revenue streams and insulate differentiate operators against offers from the over-the-top (OTT) providers.
A significant relationship, engagement and financial imperative
Cloud isn’t a new phenomenon but our reliance on data sharing and our thirst for content has seen our dependence on cloud storage and cloud collaboration tools grow dramatically. Family cloud plans provide operators with an opportunity to strengthen their relationship with high value subscribers, increase customer engagement, and most importantly, create new revenue streams that will ultimately prove fruitful in the short and the long term.
The author is Olman Tsoi Barber, SVP of product, Synchronoss.