02 Jul How data can help telecom companies win over competition
We all know about big data and the impact it is having on industries across the board. Right from government organizations to manufacturing companies, all are trying to reap the maximum benefits they can from big data. The ability to collect and process large amounts of data and derive insights is obviously helping their cause. This blog examines the impact that big data and analytics is driving in telecom companies.
Almost everyone on this planet armed with a smartphone is generating data and the telecom companies have access to it all.One can only imagine the treasure trove the telecom service providers are sitting on and the value they can derive. They can use it not only to generate insights which can grow their business but also monetize the data to generate newer streams of revenues.
McKinsey had studied telecom companies and had seen a direct correlation between their profits and revenue margins and their ability to analyze data. By analyzing the data, these telecom companies are looking to better their product offerings, improve the customer experience, and offer more personalized services. Telecom companies are also using the data to understand their customer better and reduce churn. On the operations side, they are trying to fix the glitches in the network, which is a hygiene factor for telecom customers. Through this blog let us look into a couple of opportunities which are low-hanging fruits for the telecom companies
Let us start with network management. There are tools available today that can do a network analysis. They will provide insight into the real-time load and the strength of the network. The network can be monitored real-time to give insight into their usage patterns. The network is an aspect of the telecom business that requires a lot of investment. A considered analysis of the data can help the organizations target the amount of investment needed based on capacity planning.
Price optimization as well as revenue churning as a concept has played out for a long time in the aviation industry. This concept can also have tremendous implications for the telecom industry. For e.g, a company could charge a premium for the features being used the most by its customers. The price range could be set up for the specific type of user too. Business users for instance could be charged differently from, let’s say, a student. The airline model can be directly replicated into the telecom industry. But before that can be implemented, one needs to have a deep understanding of their customer.
Clearly, getting a 360-degree view of the customer is paramount. Telecom companies can leverage these insights to the customer as an individual, their likes,user behavior, services preferred, demography, routes taken, etc.. This analysis will help them customize their service to deliver maximum value for their customers and maximum benefit for themselves.
A big data-driven 360-degree view of the customer can also provide insights into usage trends. This usage analysis can provide tremendously useful information on the engagement levels of the customer. The anomalies in the usage pattern can help telecom companies identify customers who are about to jump ship. Once they have that insight, the telecom company can take steps to retain that customer. Similar projects have become a part of the modus operandi of the banks and are finding favor in telcos as well.
Clickstream analysis is the analysis of the web pages visited by the customer before he abandons his journey. This is typically used by e-commerce companies as well as Over TheTop (OTT) content providers. Many such apps are being used via mobile devices and that data is all available with the telecom service providers. This presents a monetization opportunity to telcos. They can sell this data to large organizations and generate newer revenue streams. Verizon started doing just that a while ago. They used to sell the data of the customers who attended marquee events like the Super Bowl to the organizers who used that for smarter targeting. Similarly, billboard companies are buying location data from the telecom providers in the US to understand the demographics of their customers passing the billboards. This helps them better determine the ROI of those ads. The NFC or near field communication feature is being leveraged by retail giants like Neiman Marcus to target their customers by enabling omnichannel campaigns.
On a similar vein but at a different scale, IBM and Deutsche Telecom are partnering in Europe for building smarter cities. Needless to say, governments can also use consumer usage and location data to ease traffic congestion and plan traffic and utility flows better. These steps can have serious implications in areas like disaster management too.
Due to increased competition, telecom companies are under tremendous pressure to improve their margins and deliver newer stream of revenues. In some ways, they are behind other industries in riding the big data bandwagon. But that situation is changing rapidly. Big data can be a big savior for the Telcos. That’s what the numbers say.