Why data will transform traditional telecoms

GTB Editor
Published on:

The mobile boom propelled operators to the top of their game. However, the smartphone revolution and shift from voice and SMS to data have served to rein in the power of the MNO, writes Mikaël Schachne, VP of mobility solutions at BICS

Today, operators face competition not only from fellow communication service providers, but also from the hordes of digital service providers (DSPs) which have charged onto the scene in recent years. People’s reliance on voice and SMS is being replaced by the increasing use of and dependence on data services. 

Over-the-top (OTT) messaging platform WhatsApp, for example, now generates three times as much daily traffic as SMS, with users sending 42 billion messages per day via the platform in 2016, versus a paltry 16.4 billion texts. 

The rising rate of smartphone penetration in Asia-Pacific markets further swells the number of users reliant on affordable, accessible, OTT services; the region accounted for 70% of total growth in global internet users in 2017.

Adding to people’s growing use of digital services and technologies is that of machines. The IoT market is predicted to reach $267 billion by 2020, with the number of connected devices, technologies and services set to increase rapidly in the coming years. 

Machine-to-machine (M2M) communication will also become mainstream, with industries as diverse as healthcare, utilities, automotive, retail and agriculture all set to benefit from the efficiencies and cost savings that M2M delivers.

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This is great news for the OTT service provider and DSP; less so for the traditional operator. With the arrival of this new generation of communications provider comes the fear of mobile network operators (MNOs) being reduced to mere bit pipes. Networks which are used only for delivering basic services to customers and providing a straightforward device-to-internet link are severely under-utilised. 

To compete and succeed in today’s market, operators need instead to exploit their networks, collecting and analysing the vast volumes of data traversing their pipes.

The amount of information which telcos have at their disposal is huge. Despite the emergence of social media platforms and apps for communication, most end-users – at least for now – are still tethered to a traditional operator. 

As long as the service provided is reliable and affordable, most end-users will stick with their operator in the long-term, meaning a strong base of loyal mobile users. 

This translates to a significant level of data passing through a network which, when used intelligently, will allow MNOs to offer new services, enhance customer experiences and create efficiencies across their business. 
Adopting a solid data analytics strategy and moving from a dumb-pipe to a smart-pipe position can help operators predict future challenges, develop marketing strategies and mitigate fraud attacks: all crucial tasks across both digital and traditional telecoms.

New approaches, new services

Mobile users today are not only using digital services to stay in touch with friends and family; messaging apps are increasingly being adopted by businesses and brands to engage with customers, replacing the traditional call centre. 

One of the reasons many end-users turn to such apps for communication is because of the seamless, real-time nature of their services and the personalised experience available. DSPs collect and use data from real-time and historic end-user activity, which is then turned into actionable insights. It’s now time for all operators to do the same. MNOs can, for instance, use data analytics tools which allow them to quickly identify the type of connected device, resources and type of access needed and thus offer a customised experience for both individual end-users and businesses alike. 

Analysing user and device behaviour will also help to identify what works and what doesn’t, and to adapt and tailor services accordingly while enhancing customer experience

Tools are also available today which allow any traditional service provider to make the leap to becoming an IoT business and M2M comms enabler. M2M provides mobile operators and MVNOs with all the tools they need to launch and run M2M communications platforms on a global scale, based on a fully virtualised core network in the cloud. 

Operators need not remain in danger of becoming bit pipes, and can instead reap the benefits of the IoT: data can be collected from an ever-greater number of connected assets, and this data can be managed and acted upon with ease. Intelligent analysis of data going through an operator’s pipes can subsequently allow it to create new services which are more tailored to the individual, rather than simply targeting users en masse.

If you can’t beat them, join them

Traditional service providers must become more agile to avoid becoming bit pipes. A renewed focus on data analytics is required, which must diversify in order to compete with disruptive DSPs. 

If operators continue to pursue traditional business models, they will never compete alongside today’s OTT innovators. Instead, they must adapt their strategies and adopt intelligent data gathering and analytics tools, in order to capitalise on the wealth of information at their disposal. 

DSPs have founded their businesses on similar models, and as a result they reign supreme in today’s telecoms world. So, if traditional telecoms teams cannot beat them, make like a data gatherer and join these disruptors. 

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