The 4G success of ride hailing and content streaming services running atop telecommunications infrastructure vastly outweighed the success of the telco companies’ whose networks underpinned those services. 5G and beyond needn’t pan out that way. By taking a data-driven approach, telcos can embrace data and successfully monetize their existing and future investments.
Telcos today still retain a significant share of the industry’s generated revenues. Though their revenues aren’t growing as fast, telcos command a substantial part of the industry’s value chains and maintain direct B2B and B2C customer relationships, and their network infrastructure allows them access to extensive quantitative, geospatial, and behavioral data sets. According to Kearney, these factors give telcos a substantial opportunity to counter recent trends1 by using their competitive advantages to grow revenues and address the threat to their place in the industry value chain, as shown in Figure 1.
Using 5G as a catalyst, the following are a variety of approaches through which telcos can better serve customers, uncover new revenue streams, and operate more effectively by making better use of their data. Doing so would not just address their strategic challenges but would also increase their competitiveness within the sector.
According to McKinsey, business customers are forecast to account for a sizable portion of 5G revenues2 and represent a vital customer segment. This is key, since telcos generate a vast amount of data related to service use, and this data can provide insights of significant value, particularly given the digital transformation and data-driven initiatives of business customers. Sharing this data can unlock new revenue streams and, if done seamlessly, can empower business decision-making with a level of agility not previously possible.
Service-specific information needn’t be the only data of value though. Small businesses such as burgeoning coffee shop franchises would value information on geographic footfall, and digital marketing agencies would value data on 5G usage patterns. Scenarios such as these represent a significant set of opportunities to monetize third-party data sets.
Compliance: Depending on jurisdictions, however, legislation can limit the ability to share insights. Data obfuscation, governed access, and restricted data movement while sharing data (which is possible!) can sometimes go only so far. However, data clean rooms, an approach used in advertising to gain insights into campaign metrics, is well suited to strict data compliance rules. By allowing one or more parties to only “ask questions” of another party’s data sets, compliance need no longer be a stumbling block.
Organizations from online retailers to sports teams are applying proactive data-driven decisions to their operations with great success. Businesses today are using not just their first-party data but also second- and third-party data in their operations, from managing supply chains to running sales and marketing campaigns, as shown in Figure 2. In the process, they are improving the operational efficiency experienced at telcos today, where making data-driven businesswide decisions can be challenging.
Through implementing a similar data-driven approach, telcos stand to benefit by becoming more agile in areas, including customer-value management, service assurance, retail, and beyond. Making organizational-wide decisions, though, requires access to all organizational-wide data, which can be a common challenge due to data silos that cater to different business units and distinct services. Increasing data volumes from 5G and the accompanying semi-structured network and application data exacerbate the challenge. Building a single source of truth for first-party data, which can then be enhanced with second- and third-party data, including cross-cloud data, is imperative for delivering businesswide benefits like those seen in other sectors.
The operating model is key to telco business outcomes and governs the workings of underlying products and services. It also encapsulates the people, processes, and system capabilities that must be aligned to deliver 5G and future success. Key in enabling that success is the move to technology-driven processes that deliver more agile, automated and seamless customer experiences, according to articles by Deloitte and Business Reporter.3, 4
Modern data platforms can drive the transition towards these digital processes. They deliver the scale and elasticity to meet high volume, low latency, and variable throughput needs of applications that underpin digital processes. Leveraging modern data infrastructure allows telcos to transform legacy processes in areas that span sales onboarding to billing management to customer support. Doing so also empowers end users with modern digital experiences and offloads internal support functions.
From discount offers based on online shopping carts to product placement that impacts real-life shopping carts, data science is becoming ubiquitous. In the financial sector, firms are deploying predictive models based on customer journey data to better target customers with products and services, in the process uncovering new revenue streams and delivering a more personalized service. Even brick-and-mortar businesses are discovering use cases they can benefit from. 5G provides telcos a compelling opportunity to embrace the trend.
Network convergence, increased machine-to-machine communication, and high throughput leads to greater network complexity, which can make network management a challenge. According to Forbes, managing 5G networks via a data science approach to maintenance can reduce costs and the accompanying burden on operations teams.5 Even true dynamic pricing, the holy grail of service monetization to maximize margins and market share, can become a reality. By staying a step ahead with the use of accurate predictions pertaining to key business outcomes, telcos have the opportunity to take a more proactive approach to their future success.
Implementing these and other data-driven approaches now in conjunction with 5G initiatives can lay the foundation for rationalizing investments and delivering long-term success. However, success with a different approach requires execution and, importantly, the ability to adapt—making both key ingredients for telco success in 5G and beyond!