Telecommunications Goes All In On Digital

The telecommunications industry sits at the core of the digital revolution. It provides the communications infrastructure and services that connect the digital world. From mobile phones to long-haul data services, billions of individuals and businesses depend on the reliable and cost-effective equipment, network, and services provided by communications service providers (CSPs).

The telco industry is faced with declining revenues as its core businesses of voice and data are commoditized thanks to new market entrants such as WhatsApp, WeChat, Google, and others. The shift towards consolidation has continued and even accelerated. At the same time, customers across the board are demanding higher network reliability and bandwidth, forcing the carriers to spend billions on network upgrades and build-outs. These market pressures (combined with the fact that nearly everyone on the planet already has a phone and a service contract) mean carriers must choose among disrupting their current markets, responding to competitors creating disruption, or facing their own demise.

The clearest example of this is playing out in India. Reliance Jio has completely disrupted the Indian market – it’s gone from 0 to 100 million subscribers in six months. In response, Vodafone India is in the process of acquiring IDEA Cellular to expand its footprint in the market and establish economies of scale. At the same time, Reliance Communications has announced it will shut down.

The seismic shift of telecoms

With this type of scenario playing out in all markets, telcos are responding to industry disruption by simultaneously digitizing internal processes and building out new business models and revenue streams. The challenges are magnified because telcos run at scale – billions in revenue, millions of customers, and infrastructure that spans continents and oceans. As a result, they have sophisticated technical environments that allow them to manage their network equipment, data centers, workforces, and vehicle fleets, as well as all customer records, including pre- and post-paid service contracts, device provisioning, equipment maintenance, and billing records. The largest operators must handle all of this in markets with different rules on security, customer data privacy, currencies, and languages.

In response to these market pressures, CSPs are increasingly looking towards new business opportunities and operational models to help them manage both top- and bottom-line revenue.

Vodafone, for example, has shifted its focus from optimizing for ARPU (average revenue per user) to AMPU (average margin per user). By leveraging innovative technologies like Big Data, predictive analytics, and machine learning, the company is developing an understanding of the value of specific customers and products, helping it focus efforts on the highest-margin customers and services offerings. Others, like Verizon (which created Verizon Telematics after a series of acquisitions), are looking to offer fleet-management and other innovative IoT (Internet of Things) services. Verizon’s telematics business, for example, in October reported its organic IoT and telematics business grew 13% year-over-year, topping over US$ 220m in Q3 2017. While these examples may seem vastly different, they are both enabled by digital technologies.

The promise of digital

The telecommunications industry provides the digital backbone that innovative companies in other industries are leveraging to create value. At the same time, telcos have struggled to move beyond traditional service offerings, with only a handful of carriers entering 2018 with profitable new revenue streams. CSPs are now realizing they must look to innovative strategies that leverage emerging technologies more effectively for combined operational performance and revenue generation.

For example, CSPs are interested in IoT as both consumers of the technology and as purveyors of IoT solutions. IoT applications can help carriers efficiently manage and maintain everything from fleet vehicles to communications devices to network equipment. As telcos gain an understanding of the power of IoT, they are looking to offer IoT-as-a-Service to their enterprise customers, including data collection, secure communications, and data analytics offerings.

Similarly, blockchain is an emerging technology that cannot be overlooked. It can enable smart contracts that track the status, ownership, and repair history of communications devices and components throughout the supply chain. It can also efficiently track the billions of mobile customer devices, service contracts, and repair histories. This can directly drive better customer support and retention opportunities.

Analytics and machine learning also hold promise. They offer the ability to analyze the massive amounts of Big Data generated by customers, communications devices, repair fleets, and employee actions. From this data comes insights that can improve processes and provide insight into both optimized operational configurations and predictive maintenance and repair schedules. It can also provide value by understanding customer behavior and linking it directly to margin and profitability. This can lead to more effective and personalized products and support.

With the pace of change getting faster with each day, it’s important to focus on how these emerging technologies can solve business problems and improve customer engagement. Creating a customer-first culture, innovating using a design thinking framework, and finding strategic partners are key elements in building success for the future. The telecommunications industry is at the epicenter of the global digital transformation – now is the time for CSPs to take a leadership position for the future.

Learn how to bring new technologies and services together to power digital transformation by downloading The Future Services Sector: Connected Services for Continuous Delivery.


Internet of Things – Digitalist Magazine

Telecommunications Companies: Here’s How To Use End-To-End Enterprise Offers To Boost Revenue

Telecommunications companies are not new to the Internet of Things (IoT). Many have long used these tools as a way to gather data and implement change. These organizations, called communication service providers (CSPs), also tend to be willing to adopt technology that enhances operations. Organizations have routinely used IoT to automate processes and ensure networks remain stable. Yet, further investment in this area can also boost revenue. With the IoT market expected to be a $ 267 billion industry by 2020, according to BCG Perspectives, organizations cannot overlook this opportunity.

End-to-end enterprise adoption could mean new revenue streams

The industry continues to face fierce competition. Finding ways to reduce costs is one thing. Looking for ways to boost revenue streams continues to be critical. However, one of the largest opportunities available to CSPs has yet to be tapped by these organizations.

Within the telecommunications industry, a key area for IoT adoption is in providing platforms for end-to-end enterprise offerings, as well as for connected consumer services. Entry into these markets could provide an incredible new source of revenue. Some experts believe it could represent as much as a quarter of all CSPs’ total revenue within a matter of years.

Another key area for CSPs is in the thriving market of connected homes. Telecommunications organizations will see significant revenue by successfully launching connected home applications for consumers.

Finally, working with commercial entities to create methods for regulatory compliance can also be important. Many entities are struggling in this area due to stringent guidelines. This can be improved with IoT applications through telecommunications companies.

Why telecommunications networks matter

Consider the data from the IoT application. In IoT, there are numerous networks of networks. All are capable of pulling in massive amounts of data that can be used, in a variety of ways, to provide information. However, this type of network requires very specific elements. It must be incredibly reliable, provide ample reach, and have the resilience necessary to manage some of the most challenging circumstances. Other industries, including the semiconductor industry, are finding opportunities to use the tools they have to enhance IoT adoption.

These are the types of services that CSPs can offer beyond what other organizations can. CSPs are now a central point of integration where the digital world connects. Some organizations (generally the largest CSPs in major areas) are already aligning their networks to meet this important, developing need. And, as a result, they are seeing profitable margins.

Where is the endpoint and profit potentials for today’s smaller CSPs? The biggest opportunity lies with enterprise customers. These are end users who are looking for platforms and connectivity that will allow their own transformation into the digital world. CSPs can significantly play a role in this area.

Why CSPs should focus here

The telecommunications industry is still not immune to digital change. In fact, many organizations are struggling financially with the services they offer. High-margin profit centers are being eroded by low-margin network connectivity. Consumers and other end users are finding more affordable ways to get the services they need. New technology, including 5G, is coming as well. That will further increase competition in this sector. As a result, it has become necessary for CSPs to find alternative streams of revenue that can tap into their massive, secure networks to facilitate IoT.

This is also a very significant new opportunity for CSPs. Right now, less than 10% of the overall IoT market comes from connectivity and network managed services, like those CSPs can offer. Implementing these services will enhance profitability. For example, digital applications enabled by IoT, a key service that CSPs can provide, is likely to represent more than 30% of large CSPs’ enterprise-based revenue.

How to take advantage of the opportunities

Putting in place enterprise end-to-end offerings like this can seem overwhelming, but it offers profit potential and fits the framework that CSPs already have. To facilitate this, organizations need to first focus on connectivity. The well-developed networks of CSP management services, as well as their IoT-enabled applications, provide an access point. These organizations already have the ability to scale the number of things connected within any enterprise. They have the tools available to move data across the cloud in a reliable manner. And, they have the means to distribute intelligence to further points.

Creating the digital platform to launch it all

To transform from a typical connectivity service provider into one that meets the newer service demands, a telecom organization needs a versatile IoT platform. The platform must provide the support necessary for large-application development. It must be able to integrate its customers’ backend systems into the new platform. Additionally, it must provide the services that help CSPs manage the cost of their operations as their organization grows.

With 8.4 billion “things” in use and connected in 2017, according to Gartner, it’s time to find a way to tap into this industry. Transforming CSPs’ services through end-to-end offerings can create a new revenue source in one of the fastest growing and in-demand industries today.

 Learn how to bring new technologies and services together to power digital transformation by downloading The Future Services Sector: Connected Services for Continuous Delivery.


Internet of Things – Digitalist Magazine

IoT And The Telecommunications Industry

The Internet of Things (IoT) links objects within an active network to facilitate data management and collection. Using communication protocols to create a global network, the IoT leverages sensors, mobile devices, and Internet connectivity to boost interactions and obtain data points between physical and nonphysical objects.

However, IoT data is not limited to computers, laptops, and smartphones. It can be applied to any device that interacts with the external environment through embedded technology and the Internet. Sustainable, safe, and efficient telecommunication services benefit consumers, industry, and society in general by reducing costs and generating revenue from new sources. This in turn creates many new opportunities and could even significantly change how we consume information.

Impact on consumers

The IoT revolution helps telecommunication network providers create value in unprecedented new ways. As consumers’ behavior and expectations change, service providers will need to provide increasingly sophisticated services going forward.

To keep up with consumer demand for connectivity and data, telecom companies must adopt new strategies that tap the power of next-gen mobile devices. They will also need to embrace new technologies such as machine data, for example, to predict failures before they happen.

In a networked society, industry and consumers alike will embrace the full power of Internet connectivity. Experts predict that billions of devices—many of them consumer electronics—will be connected globally by 2021. The IoT will facilitate this through machine-to-machine and machine-to-person communication.

Benefits to the telecommunication industry

IoT data can enhance the customer experience in many ways. Telecommunication businesses can better manage changing network usage patterns; for example, by tapping the power of predictive analytics to avoid network outages when data surges during sports events.

Similarly, IoT technology will enable telecom companies to monitor and plan maintenance more effectively, optimize bandwidth and coverage to boost download times, and improve customer service by reducing dropped calls and service wait times. This in turn will minimize revenue lost to service disruption.

Conclusion

The telecommunications industry has access to massive amounts of data, but it also needs research and development to fully understand customer behavior and build real business value. Driven by innovation and longer-term cost efficiencies, the IoT is poised to create new opportunities, enable new sources of revenue, and help solve many real-world problems.

For more insight on the Internet of Things, see How Thought Leaders Envision The Future Of IoT.


Internet of Things – Digitalist Magazine

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