The Critical Role of Value Creation in Telecoms

While the market is busy talking about Digital Transformation and its impact on society, telecom operators need to pay very close attention to opportunities to create entirely new value channels that previously did not exist. Strategically speaking, value creation and distribution enablement will drive significant (and eventually, the majority of) revenues for those operators that embrace what the digital world will expose.

We are entering into a business model transformation, unlike anything the market has seen since the inception and proliferation of wireless communications. There are several catalysts operating concurrently within this movement that are all inter-related and critical to achieve the transformation successfully:

Introduction of 5G: This technology, when deployed, will serve as the largest shift in classic communications business models, as it will completely erase the borders between fixed, wireless, and satellite operators. For example, high-quality video services will no longer be monopolized by cable, fiber, and satellite providers; the same applies for broadband services. A relevant example can be found in the US market, with moves being made by Dish Network to quickly embark on a 5G network buildout, as they correctly see the business risk posed by 5G to their classic satellite delivery business model.

Digital Value Creation and Access: Herein lies the revenue opportunity previous mentioned. There isn’t an operator in the world that isn’t seeing shifts away from classic traffic-based, voice-centric business models. The question has always been, “what do we replace that with?” The answer is to aggressively move toward Digital Value Creation, wherein your customers can access the products and services that are in demand, and operators can capture a portion of those revenues. The growth in digital access to products and services has continued each year (e.g., Amazon), however, the telecom operators have been restricted to serving as the access enabler, and not the partner, for those activities.

Creating a Continuously Connected Society: The shift in how members of society interact with each other, with businesses, and with governments is accelerating at a rapid pace. Telecom operators have the unique position of being able to see every event that connects us together, because the data will travel across their network. How can that data be leveraged? Imagine Amazon seeing what their customers are buying. The operator, however, knows that the customer visits Amazon and thirty other retail entities; Amazon doesn’t have this insight. A health care provider knows how well your wi-fi enabled pacemaker is operating, but the operator knows (via your connected car) that you are also visiting the gym four days a week. The behavioral and predictive analytics that can be extracted from this visibility can help the operator target and create relevant value for their customers.

Making a strategic decision to commit to this concept of Value Creation will also require growth in infrastructure necessary to support those moves. Creating a catalog-driven business model is only the beginning; attracting digital developers and their products to have access to your customers will be crucial. Processes and methods necessary to support onboarding and partner management, service orchestration and provisioning, contract management, and revenue generation and billing will all need to be re-envisioned from legacy practices that will no longer apply.

Real-time distribution and delivery of products and services are becoming the new normal; this also means that real-time directional shifts in business processes are equally as necessary, as competitive pressures will alter the trajectory of a business plan in hours, not weeks.

One of the most important capabilities that an operator must have available to them to successfully transform into a model based on Value Creation is that of Insight. This becomes far more than a simple predictive analytics story, and its potential benefits should not be taken lightly. Understanding your customers, how they map to personas, and the journeys they take within your business will be the next great frontier in business growth. Operators that can accurately generate this knowledge, based on modeling of the enormous data they (mostly) already have, will find themselves clearly ahead of their competitors in terms of branding, loyalty, and the ability to connect with their customers to provide a superior experience. Deploying and leveraging IPaaS technology will play an important role in filling this knowledge and insight vacuum that exists today; ironically telecommunications remains the industry with the most data and the least understanding of what that data means.

Digital Value Creation is being aggressively pursued by many industries today, including Travel and Leisure, Consumer Goods, Healthcare, and other verticals that fully understand that connecting customers to products is more of a surgical endeavor than a broader marketing activity. The meteoric rise of eCommerce has driven this trend, with no end in sight. As telecom operators move to also embrace this revenue path, a combination of a clear Value Creation strategy, technology enablement, and Insights will be necessary to position them for success.

This article was originally published by Telecom Tech Outlook and has been reproduced with their permission. You can find the original here.

John Brooks
John Brooks
John is a Vice President at Subex, with responsibility for the Americas. His extensive experience of telecommunications spans fixed, mobile, data, and video technologies. With Subex (formerly Connexn/Subex Azure) since 1999, John has directed over 40 successful cost, revenue, and business optimization engagements at over 24 top-tier carriers globally, including AT&T, America Movil, BT, Vodafone, and Verizon.