NEW YORK-North American telecommunications carriers rank below manufacturing, consumer products and financial services companies in their adoption of Internet-enabled enterprises, concluded a recent report of American Management Systems, Fairfax, Va.
“eCommerce in the Telecommunications Industry: Trends and Innovations” is a study based on AMS’ evaluation of the efforts by 60 incumbent and emerging carriers to conduct many facets of their business electronically.
“In this report, electronic commerce … encompasses any business-to-business, business-to-consumer and internal interactions that use electronic media, including exchanges of information, business transactions and business collaboration throughout the entire customer and product lifestyle,” AMS said.
“Although multiple electronic commerce-related initiatives are currently in progress or being planned across the industry, they are seldom integrated with other major initiatives.”
So far, telecommunications carriers have deployed electronic commerce for individual projects rather than as part of a tactical decision to deploy Internet technology as a standard platform throughout the corporate enterprise.
“AMS believes … firms that do not consider eCommerce … at a strategic level risk creating a fragmented technology infrastructure containing mainframe, client-server and Web-based systems,” the report said.
Furthermore, a piecemeal approach on a project-by-project basis muddies the waters for carriers trying to evaluate and justify their investment in electronic commerce. AMS urged a leap of faith, predicting carriers that take their enterprises to the Web will find that future market share and competitive advantage will result from “(improved) customer focus, increased customer loyalty and enhanced customer relationship management.”
One way in which many of the carriers studied have missed the mark so far is in targeting electronic commerce initiatives primarily at retail customers.
“However, it is the high-value business customer segment that is most interested in the increased convenience, improved efficiency and enhanced productivity provided by Internet-based services,” the report said.
“At the same time, AMS believes that consumers will need to be provided with a different set of incentives, [like] significant discounts or time savings, in order for them to choose to interact with their telecommunications provider online.”
While online interactions with all kinds of customers provide carriers with a wealth of data about them, telecommunications companies “do not appear to use the information to create an enhanced customer focus or personalized online experience,” the study said.
Electronic commerce also offers telecommunications services providers many opportunities to create new revenue sources, the AMS report said.
“Vendors like Nokia (Corp.) and Ericsson (Inc.) claim that approximately 15 percent of the wireless phones in Europe in 2000 will provide Internet-browsing capabilities,” the study said.
“New technologies [like] Wireless Application Protocol, which makes it possible to leverage the Internet for browsing and [electronic commerce] through the phone display, allow provision of services unique to the standard portfolio of telecommunications services.”
Already, Norway’s Telenor allows its customers to buy movie theater tickets using their cellular phones. Finland’s Sonera lets its customers charge to their wireless phone bills the cost of car washes, parking, vending machine products and buckets of golf balls at driving ranges.
With respect to electronic billing, North American telecommunications companies are “relatively advanced … although much of the technology for electronic payment remains to be implemented and a secure relationship with the customer has yet to be established,” AMS said.
“Telecommunications companies also have been cautious in their relationships with bill consolidators, stressing the importance of format and branding features for the sake of customer loyalty.”
Some carriers, including MCI WorldCom and KPN of The Netherlands, have found another business opportunity in outsourcing their expertise in e-commerce versions of billing and customer care to small wireless companies, cable TV operators and Internet service providers, according to the study.
Telecommunications providers that engage in big-picture, companywide incorporation of electronic commerce technology also should “implement an electronic gateway for business partners for procurement and provisioning processes,” AMS said.
“While the overall approach to e-commerce varies widely from company to company, [electronic commerce] is not generally considered the highest priority and there is currently no acknowledged e-commerce leader in the telecommunications industry,” the study concluded.
“Nevertheless, as e-commerce gains real visibility among senior management, AMS believes that companies will launch strategic and organizational planning efforts to address the unique challenges and exploit the vast untapped potential provided by this recent phenomenon.”
