Editor’s Note: Welcome to our weekly Reader Forum section. In an attempt to broaden our interaction with our readers we have created this forum for those with something meaningful to say to the wireless industry. We want to keep this as open as possible, but we maintain some editorial control to keep it free of commercials or attacks. Please send along submissions for this section to our editors at: dmeyer@rcrwireless.com.
Many operators around the world are cognizant of the fact that there has been a seismic shift in their business world over the last few years, while others are just waking up to the reality. Operators are facing a challenging new reality in which they are viewed as a utility, or at best, an enabler of communications.
Not long ago, operators lived in an “age of heroes,’ dominated by titans wielding absolute power (voice and messaging services). Today, the heroes of old are constantly being accosted from all directions by new innovative, challengers in the form of over-the-top providers. These OTT providers, together with the device manufacturers, are shaking the foundations of the very world they created and looking to unseat them on Mount Olympus. This may sound dramatic, but it’s a fairly good analogy to what we are currently experiencing in the world of telecom.
In addition to the challenge presented by OTT providers, there are hardships in other areas as well. In this new world, “subscribers” no longer forced into operator contracts, are now referred to as “customers.” The concept of brand loyalty is long dead, and customer experience now reigns in its place. Operators can no longer stick to the mantra “build it and they will come.” In today’s new environment, customer experience is judged on the last transaction. With fierce competition, jumping ship is easy for the customer, and even a single slip-up can drive them away. In the above scenarios, operators are faced with the unenviable task of regaining the ability to dictate how customers interact with their various services.
The big question is how are telecom operators going to respond to the challenges introduced by the age of the digital lifestyle that has been promoted by the OTT players and their “marketplace” of services?
The digital lifestyle is transpiring all around operators, and even though their pipes are essential to enabling the digital lifestyle, they seem to be stunned into inaction. In order to assist operators combat these various impediments, we must first pose the question that is often asked of young adults, “what do you want to be when you grow up?” In this case, the choice is essentially between being a connectivity utility or something more, such as a being a digital lifestyle provider.
In order to transition from connectivity provider to digital lifestyle provider, CSPs need to first make a conscience decision about their own future. They need to understand their own value and effectively communicate it to both their customers and the OTT providers (who can become their customers). To gain this understanding, CSPs need insight into both how their network is performing (from the cables up to the application) and their customer’s experience (voice, video, browsing, billing, self-help, etc.). Once they have uncovered this, they need to identify a handful of use cases that will enable them to begin the process of transformation. These use cases must address underlying technology issues in order to optimize content delivery, and at the same time address business issues like monetization. Here are two examples:
Use case example No. 1: OTT video optimization
Offer customers an optimized video service as a paid add-on to their current data plan. Key benefits:
–Contain infrastructure costs by minimizing the impact of high bandwidth traffic.
–Meet or exceed customer experience expectations for video streaming.
–Increase the average revenue per user for the CSP by selling a true value added service.
Use case example No. 2: Home zone (location-based awareness)
Offer customers a free or heavily discounted data services package at the customer’s home or other pre-defined location (office or classroom), in order to keep them on the CSP’s network. Key benefits:
–Enable customers to feel comfortable with using data at their home zone without cost consideration.
–Increase revenues by gaining the customer at their home zone and not losing them to Wi-Fi or a competing CSP. Increase revenues by offering sponsorship deals to OTT content providers.
These two case studies are great examples of how CSPs can transform their approach to meet the changing environment. Introducing such use cases provide valued-added service to customers, ultimately elevating the overall importance of the CSP. Implementing these use cases enables CSPs to put their network at the center of the digital lifestyle, allowing them to help shape the user experience, drive the ecosystem and reap the rewards.
Finally, it must be noted that this transformation is a process, not a final destination. The key is to always be ready to innovate and to adapt to the next shift. Additionally, one must remember that while the technology itself is crucial, an adjustment of the mindset is equally important.
