Communication Service Providers (CSPs) around the world have relied for years on revenue from voice, data and messaging services. These connectivity-based income streams are, however, delivering rapidly diminishing returns.
The signs are that revenues from traditional services will plateau over the next 10 years. Indeed, income from traditional communications services is anticipated by some analysts to decline by 50% from current levels by 2025. But the news may be even worse than forecast. As smartphones keep getting smarter and cheaper, as 4G networks spread to all corners of the world and with 5G already on the horizon, a whole new world of applications and services is opening up, driven at the moment by digitally-focussed players like Google, Skype and WhatsApp. It is not difficult to imagine that, given time, the profits to be had from conventional connectivity services will all but disappear.
So what can traditional operators do? They can offer better and better value in their packages and tariffs, but this is only likely to compensate for a fraction of the missing revenue. At one time operators imagined that diversifying from voice services to data was the answer, but data services are generating much less profit than they used to, in spite of rising demand. Another option for operators is to constantly cut costs to stay as lean and competitive. All businesses can benefit from scrutinising costs, but ultimately this is not a winning strategy. In a changing landscape, a whole new strategy is needed to stay competitive in the industry. As the behaviour of customers changes, the new digital economy offers great opportunities to service providers to regain their edge. In order, though, to realise their true potential, CSPs must change their game from the ground up and refocus around completely new revenue streams of the sort currently being pioneered by internet-based rivals.
To improve revenues, operators must start looking at offering digital services. This however needs a major shift in operator thinking and culture, not merely the launch of a few new token offers. Before an operator can break into the digital service game they must consider that millennial customers expect certain capabilities from their service providers. These digital natives expect an amplified technology experience, digital interaction and hyper personalisation. One-size-fits-all is not an answer that works with today’s customers.
So what will these digital services look like? They encompass communication and collaboration applications like video conferencing, Unified Communications and Rich Communications Services, all far more agile and compelling than today’s messaging apps. A future of M2M and Internet of Things communications can already be envisaged, allowing the automation of homes and work places and the seamless connectivity of cars, equipment and buildings. Entertainment, news and educational content will all be delivered digitally, and as consumers desire, all on demand. The experience will include real-time billing and payment mechanisms. Mobile payments will become a lot more sophisticated. Healthcare and fitness will also be important digital growth areas. Digital services that enhance the customer experience across a number of fields will surge in popularity, as will cloud-based IT services for small businesses.
The CSP has the right credentials to deliver all these innovations, just as much as, if not more than, a pure-play digital provider. There are actually several reasons why a consumer or enterprise customer might prefer to buy from a CSP rather than a carrier-neutral digital player when it comes to a new generation of services that are even more central to their lives than today’s choices.
The primary reason is the stability and continuity of service that a regular operator guarantees as part of their standard offer. There is also the important matter of delivering the desired quality of service, something that really matters both to enterprises, who need high reliability, and to digital consumers, who will quickly churn away the moment the experience is not to their satisfaction. The traditional operator can deliver stability, high levels of security and service assurance, as these have been their core attributes for years.
ENABLING DIGITAL TRANSFORMATION
If the CSP is well positioned to provide its customers with life-enhancing and game changing digital services, they need help in achieving this transformation. Who is best placed to help the CSP to manage the necessary transformation of their business towards a brighter future? The move from CSP to DSP is not an easy step, and cannot be achieved overnight. It requires changes in several organisational processes, and an experienced partner to bring the necessary knowledge and best practices.
Wipro has a strong track record in helping customers to achieve business transformation, involving organisation process transformation and improvements to operational efficiency. It provides advice to a range of major global names, including several in the telecoms sector. Wipro includes mobile, fixed line, cable and satellite operators among its customers, and has experience spanning the consumer, enterprise and wholesale sides of the market.
Wipro believes that there is no silver bullet for the transformation of a traditional communications business to a digital service provider. But over its various engagements with CSPs, it has developed a carefully calibrated approach that facilitates this process.
Wipro believes that a DSP may not be able to predict every service that will become desirable or essential in the future, but that it can make efforts to be collaborative, putting in place platforms that seamlessly integrate partners and communities, giving them the ability to launch anything at any time.
The speed with which services can be launched is a critical factor for success. The DSP must therefore be adaptive, bringing a high level of automation to service creation and management. The operator cannot manage everything by itself, instead will rely on a strong partner ecosystem to help them launch new services. The time to market cannot be achieved by creating everything from scratch. They should be able to leverage the developments in the market to create the future enterprise.
Another challenge that DSPs face is being ubiquitous. Their services must be accessible to every customer from anywhere, at any time and over any device - tablet, smartphone, laptop, desktop or wearable. Ubiquity is important, because customers prefer to use any device, anywhere at any time they want.
As customers gain access to services across a growing number of channels, the DSP will need to focus on becoming spontaneous. Analytics-driven real-time decision making will determine their response to customer needs. A new generation of OSS/BSS solutions will meet the demands of customers.
With the long tail of services the network is required to support, there will be concern around the performance of the network. An elastic infrastructure will therefore become mandatory to provide on-demand scalability and cost efficiency. Elasticity is vital so that you can offer what is wanted as demand grows or shrinks.
These five attributes - Collaborative, Adaptive, Ubiquitous, Spontaneous and Elastic – are Wipro’s CAUSE framework for transformation, aimed at keeping the CSP to DSP transformation customer-focussed and therefore relevant. These are transformation building blocks that the operator needs to look at when they move from being a CSP to a DSP.
Over the last few years, the communication industry has experienced several significant challenges which have forced operators to rethink their strategies and look for innovative solutions. They’ve had to deploy super-fast networks at low cost, they’ve faced pressures over monetisation of the network as well as a surge in data consumption due to applications and videos put over the network by internet players. Now comes their biggest challenge yet as they seek to reinvent themselves from the ground up to create a sustainable business model. Their choice of partner in this endeavour is perhaps the most important decision they will ever face.
WHAT DIGITAL CUSTOMERS REALLY WANT
When creating a new generation of services, digital service providers will need to factor in a number of attributes that both consumers and enterprises will expect from those services:
- The technology experience: Services must be easy to understand, easy to buy, easy to use and straightforward to pay for
- Built in simplicity: Complex technologies are not relevant and not something for the customer to worry about
- Seamless interaction: Any service must feature smooth end-to-end multi-channel processes, click to order, a single view of orders, and online repair booking
- Like real life: A service must offer real time responses that give the user control and choice, just like other areas of their life
- Reassurance: Security and privacy will be presumed to come as standard
WHAT WIPRO CAN DELIVER
Wipro’s offer for the communication industry is divided between six practices, each focussing on a mission critical area of an operator’s business:
Digital BSS/OSS: Through this practice, Wipro offers it simplification, systems integration and a range of managed it services to make the back office function smoothly
Telecom networks: This practice will optimise your network, carry out design, engineering and rollout services and help launch and manage enterprise services
Digital: This practice specialises in the customer experience and engages in transformation of a standard CSP business to face a digital future
Hyper-automation: Holmes is wipro’s own artificial intelligence and automation platform, designed to streamline an operator business
Telco cloud: This practice will fast track the software enablement and virtualisation of an operator’s it and its network
Domain consulting: a variety of services that get the very best out of our communications customers’ businesses