Data dictates – how analytics is shaping our world
The telecommunications industry has become so vast and such an important part of everyday life that there is a plethora of variations in strategy and approach for telcos when it comes to digital transformation.
But one thing that is now becoming common across the industry is the recognition that working with partners who specialise in delivering a particular product or service is paramount to ensure that customers are getting maximum value.
In order to stay competitive and relevant in the market, recognising the value of digital services has to be a fundament of the approach of any telecoms company these days, and more than that, adding value to the customer has become increasingly challenging because of the spectrum of offerings available.
So, what is the key to ensuring that a telco sustains success as we progress through an increasing digitisation of our daily lives, with free messaging and voice-calling services available on the internet and on mobile phones?
Well, according to Dennis Keller, Head of Commercial Planning & Strategy for Telenor Digital, a number of business models can be successful, but one thing which remains true across the industry is the requirement for telcos to recognise customers’ behaviours and needs and, more importantly, be adaptable enough to deliver new solutions based on those.
“I believe right now, if you look at the buzzword of digital transformation, it’s high on the agenda for every single telco,” Keller explains. “When you look at industry events or look in the newspaper, there is no question that for telcos the challenges are different, because the market is moving so much faster and really now the challenge is actually not just at a service level, but across the entire value chain of telco.
“The very basics of axis provision get increasingly challenging, and with the balloons out there and satellite-flying drones potentially providing internet to rural communities, when it doesn’t come from a telco we have to ask ourselves ‘what is the opportunity for us here? Are we missing out or are we in the same boat? Are we cold-developing that or are we just observers?’
“The easy comparison to demonstrate what I mean comes with the good old SMS where most of us really lost the game,” Keller continues. “That’s because as soon as MOIP came in and things like What’sApp and the like, people stopped sending SMS messages and a big chunk of revenue was lost, generally speaking. It’s not true for every single market, but the challenges are across the board for telcos.
“Where the differentiator lies, is in how telcos respond to that challenge. You can see differences in where some companies are maybe focusing on internal technology and making sure they are efficient and see no problem in essentially being utility companies. You have the pipes through which the data flows and whatever is done with that data is up to service providers.
“Or you say ‘hey, let’s not put all of our eggs in the one basket’ and let’s diversify and operate a lot more like a potential venture capital-type investment company and look a little bit at everything.
“Then, another way to approach it is to say ‘let’s develop the service proposition ourselves and let’s see what products we can develop based on the understanding of a pretty huge customer base.’ So, what happens is you have all of these different puzzle pieces or options that you can go into, and some are more compatible with others.”
One way of ensuring that the jigsaw pieces together, is by working with partners to deliver the best possible service for customers – rather than going in cold to a whole new side of the digital space.
Keller believes that entering into commercial partnerships with regional service providers actually provides a huge opportunity for companies to deliver increased value and negates the difficulties of “having to unravel a whole new industry from scratch”, as he so aptly puts it.
He says: “Digital partnerships allow companies to stay relevant and provide commercial opportunities which otherwise would be a big gamble if they were developed in-house.
“It’s one of the keys to making a successful digital transformation happen in the telco industry. That’s primarily because it really needs effort to build services and understand customers and what they do. In many cases, there are already a lot of providers and services out there that understand exactly what their customers want from whatever specific service they provide. YouTube, for instance, knows exactly who watches what kind of video and which different age bracket or category of video they’re interested in. A music streaming provider knows exactly what kind of music a customer listens to and when they’re going to want to listen to it.
“With that in mind and having already captured a large audience, there is no need essentially to try and compete with these services when we can develop a win-win situation by partnering with these providers. In many cases, for these services, they can tap into a much bigger market through us as a telco. They can access new customers and gain a better understanding of who the customers are, and for us it provides an opportunity to, in an easier way, give our customers the services that they really want.”
Keller argues that although there is a big difference, in terms of strategic approach, between the commercial and technological evolutions within a successful digital transformation, a common premise underlies both.
Understanding customer behaviours and exactly how, when and why they tend to interact with a telco’s services allows companies in the space to ensure that their offerings are giving something to the customer – rather than annoying them and making them feel like they’re being spammed.
And the key to doing that is by a telco interpreting its own data.
Keller explains: “You need to really understand what customers actually want. That may sound like something very simple but it isn’t. To really understand the data, and the needs of the customers behind that, is incredibly important. When it comes to looking at the evolution for the commercial side and the technology side, I think there is a difference in speed and the approach of how that can be done.
“On the tech side, first of all, you have to remember that all of the basic technology is there, the foundation from which you can build a whole lot of things. When it comes to providing services it’s now incredibly easy to do that. When you look at WhatsApp or Facebook as an example, they are not necessarily reliant on our technology, so the key to ensuring that evolution and ensuring that our technology is, and remains, relevant is to be able to link that technology back to the market and provide the right opportunities.
“When it comes to the commercial side, again I think it depends on the approach of the company, and the relevancy of how they wish to look at things according to their objectives. The area that depends on most, is what position a company wants to take. Do you want to be the company that provides services yourselves? Or does it make more sense to understand the market and tap into it with a partner?”
Essentially then, he argues, it’s about interpreting the data at your disposal, and maintaining the necessary perspective to make the right decision both for the company and its customers.
Keller adds: “It’s about not just comparing ourselves to other telcos, but understanding the wider market and looking at data within the context in which we’re situated now – meaning: do we understand the big internet companies? Do we understand the small apps that are just appearing on the App Store and will maybe end up growing massively? Of course, they might not, but are we aware of what’s happening? And that is incredibly important. Data, as a very first step, needs to go into the wider context of strategy and that then leads to the point of ‘how can we perform well?’
“Secondly, I’d say, understanding the value of digital services to the telco is really the prerequisite to making things work, and it takes a whole host of things. It’s about building up the data scientists’ capacity in the company, being able to apply machine learning and big data, complex methodologies to ideally automate as much as possible the understandings of the behaviours which underly the digital services, the customers and ultimately the value that that brings to the business.
“Then, further to that, it’s about understanding the indirect effects. What is the trigger for behavioural changes and how can we test that? Are there some spillover effects? Say, if someone starts using a specific game, are they inclined to use three other services – maybe YouTube if they want to stream their playing of the game through live video, for example?
“Understanding these correlations and behavioural links is something that allows us to then understand the key message and key value of a product or a service, and through that how we can build up the right portfolio and strategy to respond. I would say that the performance of transforming into a digital service provider relies on that understanding of the data and the behavioural changes that happen as services change and customers adopt these new services.”
Business Review Asia Magazine - September issue