Mobile telecommunication providers need to be prepared for the challenges that come with the move towards a new digital world.
Editor’s Note: With 2017 now upon us, RCR Wireless News has gathered predictions from across the mobile telecommunications space on what they expect to see in the new year.
“If it ain’t broke, break it!”
This is the mindset for companies who hope to remain relevant in today’s digital world. Most service providers have broken out of the old mindset and are now working hard to create visions that include digital revenue streams in order to realize new digital approaches to customer engagement. It requires establishing an agile and automated operational environment, a partner mindset and cultivating an innovative culture.
In addition to constant investment in technology driven efficiency improvements, the path to digital transformation requires that service providers move away from a focus on selling connectivity, towards the selling of service-enabling digital platforms or experiences, both to consumers as well as business customers. These are also areas which are less exposed to regulatory restrictions.
Competing over customers with speed and convergence
The digitization of services means that different types of connectivity and services will be sold in bundles, and while these bundles currently focus on communications and media services, they can be (and probably will be) extended to other industries such as retail and energy.
Mobile service providers who are in the final stages of their 4G deployments are seeing growth in the number of their 4G subscribers, which is leading to increased data usage and upgrades into higher-tiered priced data plans. These service providers will compete aggressively on 4G network coverage and over subscribers to continue growth. In order to keep their network advantage and competitive pricing it brings, they will continue to invest in their networks upgrading to “4.5” and eventually “5G” technology. They will also continue network modernization in the combination and upgrade of fixed mobile networks.
Service providers with a fiber buildout will continue to invest in their networks to answer demand for high speeds. If not, they may be challenged by alternative network companies.
Digital is pushing the needle with the customer in focus
Digital transformation time to market is vital given that as soon as one service provider launches a service successfully, others will need to follow quickly.
During 2017, service providers will consolidate their focus on digital services as a means toward growth, which according to Gartner currently comprises an average of only 10% to 15% of total revenue. Of this, enterprise will account for 75% to 80% and consumer services for 20% to 25%.
One company whose transformation is bearing fruit is Telefónica, which seeks to become the “Onlife Telco.” Relating to how the company envisages achieving this goal, chief commercial officer Eduardo Navarro said, “we’d need to shift focus from offerings like voice to connectivity to service the shift to consumption and generation of data … and in this new era, the agents of change are the internet, cloud, big data, social networks and smartphones. Connectivity has become our new oxygen.”
Already, Telefónica’s digital services (video, cloud, e-health, security and machine-to-machine) have grown to the extent that they contributed more than 10% of the company’s total revenue during the third quarter of 2016, with the expectation that it will continue to grow 20% year-over-year.
Enter “Generation C” … and artificial intelligence
Customer behaviors and business models that were unthinkable a decade ago are now commonplace, even going as far as to change the way we relate to each other. Evan Spiegel, CEO of Snap Inc., whose company played a significant role in this shift, captured the phenomenon saying, “People wonder why their daughter is taking 10,000 photos a day. What they don’t realize is that she isn’t preserving images. She’s talking.”
It is “Generation C” that is leading the way towards embracing all things digital, demanding empowerment through technology and craving fast and intuitive interactions. This generation, which is not defined by age, likes to create, curate, connect and form communities. And they are taking connectivity (both with each other and with the content they consume) to new levels, using new devices that provide new uber-rich, omniplatform experiences.
So it’s not surprising that the digital experience, together with the associated customer experience, has become a major focus area for service providers – a trend which will no doubt continue.
In another nod to “Generation C,” service providers are now beginning to experiment with emerging artificial intelligence technologies in order to boost customer engagement. Already, customer engagement via digital channels is in high demand, especially via messaging. In addition, widespread use of virtual customer assistants in call centers and across social media is expected to grow. According to Gartner, consumer messaging is set to overtake social media as the point of origin for customer support, while the use of virtual customer assistants will jump ten-fold by 2020. These assistants will be deployed across multiple engagement channels and on multiple devices, in order to provide contextual and personalized interactions. They will also provide service providers with greater efficiencies via their ability to scale as well as reduced costs (virtual assistants can work 24/7 and do not get tired or sick). One pioneer in the area, is Kyivstar Ukraine, which launched a Facebook Messenger chatbot called “Zoryana” in July, which answers customer queries in Russian and Ukrainian, and has a knowledge base that grows based on its interactions.
The last word: service providers – now more than ever – have an opportunity to provide a simplified digital experience, and by making the most of their network assets, their customer base, data insights, as well as working with partners – they can become even more central to their customer’s day to day lives.
