By Lokesh Dadhich, Principal at Arthur D. Little Dubai and Vikram Gupta, Manager at Arthur D. Little London
Big data is an invaluable strategic lever for telecom operators to reverse the revenue decline trend affecting markets worldwide.
The emergence of big data technologies enables telcos to capture, analyse and monetise enormous volumes of customer information and interaction data across multiple touchpoints in real time.
This provides them with a unique strategic advantage to improve the performance of their core business by offering more targeted products and services and differentiated customer experience.
The most valuable customer insight can be monetised, and an array of enabling data and business intelligence services can be offered to companies in a range of industries.
Ownership of customer insight (eg, location, online activity and behaviour, billing and payment history), has long been touted as an invaluable competitive advantage for a telecom operator, especially in the wake of competition from OTT players.
As customers widen their digital footprints, big data use cases are moving away from descriptive analytics towards not only predictive, but also prescriptive, analytics covering users’ behaviour across all digital touchpoints.
Partnering and collaboration with players across digital ecosystems is a key trend for telcos to further broaden and enrich their customer data sets.
A critical point of debate in ascertaining the value and benefits of big data for telecom operators is the level of contribution from internal and/or external monetisation.
The ambition of telecom operators with wider ICT focus has been in favour of external monetisation.
However, the business potential of internal monetisation use cases can be six to nine times more than the potential realised through external monetisation.
Telcos will be able to increase revenue by improving their core and non-core product offerings.
They can achieve this through targeting specific customer needs, with deep customer insight on one hand and enhancing the bottom line through greater efficiency in network planning, sales, customer care, on the other.
Some of the most interesting internal use cases resulting in significant quantifiable impact include:
- Reducing churn through real-time call data record (CDR) analysis
- Event-based churn management – operators can predict churn due to specific competitive actions and develop their own anti-churn campaigns accordingly.
- A proactive approach to customer experience management
Telefonica Dynamic Insights and Orange Datavenue are some of telcos’ pioneering initiatives toward external monetisation.
Some interesting examples of telcos successfully monetizing their big data capabilities through external use cases include:
- Applications for third parties to optimize branch locations. This application could be used by multiple players.
- Smart targeting – another operator analyses web and location logs in order to develop targeted campaigns by micro-location, lifestyle, type of handset owned, etc.
- Optimisation and targeting of billboards.
Organisations striving to maximise the big data potential need to implement the most optimal operating model.
Critical aspects of best-practice operating models are advanced data and business intelligence (D&BI) capabilities, a clear outline of the accountabilities across the value chain, and organisational emphasis on the D&BI function.
For operators, there is a range of options for operating models. At one end of the spectrum is the fully distributed model, in which the roles and responsibilities across the D&BI value chain are dispersed across the organisation.
On the other end is the centralized model, in which a central function takes ownership from strategy to implementation of big data initiatives, and acts as a service provider to internal as well as external customers.
Operators with scarce resources should aim for greater centralisation to build capabilities sustainably in the long run.
Even though big data is a new frontier and there is a widespread excitement to master and execute something new, it is important to base any new investments in skills and technology on a strong business context.
Telcos should aim to build upon small successes and then gradually roll out big data initiatives organisation-wide.
Once the value of big data analytics becomes visible, a companywide rollout and adoption becomes much easier to accomplish.
Vikram Gupta will be speaking at European Communications' fourth annual big data seminar on 25 June. Click here to register your free place