Winning the telco game in 2013

Wholesale adoption of smart devices also means exponential growth in data and video traffic, but are the telcos equipped to make the most of the opportunity?

With sales of smartphone and tablets on the upsurge, it’s no surprise that in the next 12 months we’ll see exponential growth in data and video traffic. The number of people enjoying LTE coverage is also set to skyrocket in the next few years. What are the implications then of this phenomenal growth for service providers and what should they be doing to get the most out of this opportunity?

Service providers look set to move away from just worrying about the operational challenge of managing big data to realising the business opportunity that big data presents. Perhaps the most crucial differentiator in service providers’ arsenal against competition by over-the-top (OTT) players is the customer experience service providers afford their subscribers.

Service providers have a significant advantage in that they are the ones that shape the customer experience. By capturing more customer data and then using analytics to offer proactive and contextual experiences, service providers will be able to offer more enhanced services relevant to the individual subscriber. Furthermore, service providers will also be able to provide improved customer care by proactively managing their relationship with their customers.

Providing a convergent customer experience

Service providers are also going to make omni-channel a top priority for 2013. They will be following the example of leading retail vendors who have already made omni-channel part of their business strategy.

According to Frost & Sullivan’s senior research manager, Australia & New Zealand Phil Harpur, online shoppers are already making extensive use of social media and major retailers are starting to implement omni-channel marketing strategies in a bid to counter the move to online shopping.

Currently, despite an increased investment in online self-service channels so as to improve customer care, empower the customer and reduce costs through fewer calls to the call centre, customers are still finding these channels cumbersome and often have to phone the call centre to reach a satisfactory resolution of their query or attempted purchase. In this context, we will also see that smartphones and smartphone self-care applications will play a significant role in the way customers interact with their service providers.

Service providers will integrate their different channels so that customers will be able to interact with their service provider via the channel that they prefer, and continue this interaction from one channel to another seamlessly. For example, if I want to change my data package, I want to be able to do the research on my PC at the office, save a draft order in my shopping cart, think about it on the way home, making changes to the order on my smartphone and then make my purchase from my tablet later in the evening, without having to start all over again from scratch. It’s all about simplifying the experience for the consumer.

And if for some reason, the system fails, then at least when the subscriber calls the customer care centre, the agent will have the details of the customer’s latest actions on their screen, saving the consumer the exasperation of having to explain the whole process from beginning to end, as well as reducing average call handling time for the operator.

Dizzying traffic growth 

Data traffic is also going to continue to expand at dizzying rates, powered by the rising tide of video, and highlighted by the growing increase in cross-screen viewing and service providers’ TV - everywhere strategies (for example, enabling customers to move from the TV while at home to a tablet on the train when watching a movie).  Service providers need to harness this data, monetising the demand for new data services while optimising their network and IT assets.

2013 will be the year in which we’ll start to see service providers using LTE as a means to introduce new, value-based pricing models and advanced services, and not just as a way to overcome capacity challenges and provide subscribers with faster speeds.

This will require better integration between the network and the service provider’s business support systems, with policy control and real-time charging key to successful monetisation, and it will allow service providers to introduce new, innovative data services.

Network integration is key

Meanwhile, to help prevent network capacity shortfalls, service providers have been using Wi-Fi as a defensive offload strategy, while small cells have been deployed to help with indoor coverage at large shopping malls, sport stadiums and other crowded venues. But to really improve the customer experience, service providers will strive to ensure that their subscribers enjoy the same level of quality of service across various networks used – Wi-Fi, 3G and 4G – when they start watching a movie on their tablet at their favorite coffee shop before continuing to watch it in the car’s multi-media player. To achieve this, service providers will need to integrate all the different networks involved.

According to research in the Australian Communications and Media Authority (ACMA) communications report 2011-12 series, Australians are turning to Wi-Fi hotspots in growing numbers, partly driven by the data usage habits of tablet device users. The ACMA research found that during the second quarter of 2012, an estimated 2.06 million Australians used Wi-Fi internet hotspots, a 32 per cent increase in activity compared to the second quarter of 2011.

The integration between small cells, Wi-Fi and wireless networks that such an experience demands, is not easy; such heterogeneous networks “HetNets” raise challenges of large-scale network planning, deployment and optimisation, as well as session continuity, quality of service (QoS) assurance and security, but it’s a challenge that service providers have strong incentive to address.

Growth in M2M

We’ll also see greater momentum in service providers’ penetration of new verticals such as in the case of the connected home and health monitoring solutions. The “connected home” as well as machine-to-machine (M2M) solutions are becoming more prevalent. Interestingly, we are even beginning to see service providers partner with one another in M2M solutions, with TeliaSonera, France Telecom-Orange and Deutsche Telekom, for example, having a roaming partnership to increase one another’s geographical footprint for transportation M2M solutions in Europe. In Asia, Docomo and KT have partnered to create a cross-border Near Field Communication payment offering.

Driving business growth with partnerships

In fact, we anticipate many more partnerships will be formed. As a recent Amdocs survey showed, service providers, OTT players and device manufacturers all see the importance of forming strategic partnerships to achieve business growth.

By joining forces with OTT players, service providers will able to bring innovation and brand differentiation quickly to market, but this will demand open and effective partner management systems for revenue sharing, easy onboarding of new partners, high QoS, and a winning customer experience that is only possible with integrated IT systems that effectively leverage customer data.

For service providers, it is most certainly data that is going to make the world go round and it is this that is driving the trends on both the operational and business fronts for 2013.

Michal Harris is the Director, Market Insight & Strategy at Amdocs 

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