The telecommunication business model has seen a radical shift over the last three decades from selling voice minutes to a position as a de facto utility for Internet enablement. Although the primary method of revenue generation has changed, the industry has witnessed constant growth in customer numbers and the diversity of products it offers, says Vijay Sajja, founder and CEO, Evergent.
It is specifically within the mobile sector that this shift has become most apparent as operators not only begin to replace fixed-line offerings but also broadband and connectivity for IoT, and with the arrival of 5G, the potential to expand further into the enterprise with a host of cloud edge use cases.
The 5G catalyst
As 5G transforms every industry, telcos are shifting from being network providers to becoming outcome providers, where delivering connectivity is only a part of an extended value chain. This can be seen in many examples, from mobile connectivity within a new generation of autonomous vehicles to the provision of healthcare. The list of where telcos are looking to offer value with 5G is constantly evolving. Several pioneering telcos are positioning themselves as digital lifestyle providers as they move from a traditionally centralised ecosystem to an adaptive one that focuses on improving their consumers’ lives.
Their aim is to add value across a digital-enabled world where they sit in the middle of billions of daily transactions. And, even though social media giants like Google and Facebook intersect with vast swaths of the population, telecom providers have deeper relationships through their active billable subscribers – a connection which spans the home, at work, and travelling domestically and internationally. This relationship covers every touchpoint, enabling operators to develop unique insights into users’ behaviours and drive hyper-personalised offerings to suit each individual need.
Lifestyle provider
Adding more value to different parts of consumers’ lives offers a path to new revenue opportunities. To truly understand the minds of tomorrow’s telco customers, personalisation takes centre stage. That means putting user experiences at the heart of everything they do to increase engagement and drive loyalty. Looking to the future, we can expect telcos to enter more areas, whether that’s gaming, entertainment, or home security.
Any segment where having connectivity and a trusted customer relationship can extend value. To embrace this shift, operators can utilise their own, often-overlooked asset the vast amount of subscriber, billing, usage, and geo-location data both historical and generated in real-time from millions of users.
Leveraging vast amounts of user data enables operators to provide customers with personalised services and previously unheard-of experiences. When intelligently dissected, these continually growing data pools can deliver real insights vital in building and successfully running compelling offerings.
For example, operators that have mobile banking offerings like M-PESA or Airtel Money could utilise transaction data to allow better creation and targeting of complementary financial products or even target subscribers with alternative options delivered through commercial partners. The overarching goal is to encourage consumers to allow telco providers into a bigger slice of their lives.
Productise and innovate
Let’s look at another example, such as the potential for fixed wireless access (FWA), where network operators deliver ultra-high-speed broadband to suburban and rural areas. This initiative supports home and business applications as an alternative to prohibitively expensive fibre rollouts.
A recent article from McKinsey & Company highlighted this shift towards better utilisation of data from existing subscribers to pilot working prototypes with select consumers and then refine the user experience before launching a widespread rollout. The consultants pointed to one North American telco, for example, testing 5G FWA in a few select markets. The goal for that provider was to refine its offering before gradually expanding to additional markets on a path to introducing FWA nationwide. Data can also help discover households with limited Internet access. Once such pockets are identified, FWA, with its less capital-intensive rollout costs, can be introduced in these areas previously unserved because of unfavourable economics.
FWA is just a single example. According to another McKinsey & Company survey, nearly three-quarters of potential customers would prefer buying a 5G connection directly from a video streaming or game streaming app rather than their mobile provider a clear indicator of the revenue opportunity 5G can bring. The aim for telcos is to build a long-term partnership strategy with these providers and devise innovative pricing options to tap into new customer segments across the globe.
Co-operation is critical
We are surging towards an ever-increasing world of connectivity, where the pace of change accelerates all the time. The transition to 5G is influencing many operators to rebuild network cores as more open, software-defined infrastructure. In turn, the legacy MSS and OSS platforms are migrating to cloud-centric platforms that can deliver the insights and fractional billing needed to power a new generation of services. This is a vital foundation for products that may require complex partnerships with third parties for the delivery of value-added services, along with a potential host of new 5G-enabled use cases like private enterprise networks, AR/VR, and smarter homes.
What is clear is that operators can become more visible dynamic components within the value chain, which means testing innovations that will likely require more cooperation. These new partners may include content owners, publishers, retailers, utilities, transport providers, and financial services. Cloud-native revenue, royalty, billing, and subscriber management systems sitting alongside legacy platforms can bridge these disparate communities and will be a critical component in making this goal a viable reality.
But to make 5G truly pay, operators can tap into one of their biggest assets: their deep relationships with customers and fundamental position as enablers for our digital world. It’s about the value they’re providing and understanding what drives the uptake and loyalty of users to increase their value footprint over time. To do that, they can look to their data pool and draw insights from their users to build a clearer picture of their current and future behaviour. Through data, operators can dynamically personalise and create great customer experiences, providing that important all-important emotional connection with consumers. For telcos, the time to modernise to monetise is right now.
The author is Vijay Sajja, founder and CEO, Evergent.
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