Smartphones — thanks to superior user experiences and affordable pricing models — dominate the market worldwide. In the first quarter of 2016, they represented 78% of total mobile phone sales worldwide.
Data consumption has become in many regions the prime use case, enabled by faster networks, more affordable service plans and a compelling app economy. At the same time, over-the-top companies disrupt the market by leveraging mobile operator assets, capturing value through their services and further nurturing the customer relationship. The result diminishes the role, mindshare and ultimately monetary upside for operators. To stay competitive and relevant, mobile operators must move beyond traditional connectivity services, be more agile and deliver high-value digital experiences that delight customers.
These three explosive trends will continue to be top of mind for operators as they devise strategies for future success.
The digital experience is the new playing field
Digital businesses enable new business models, deliver enhanced customer experiences, incur lower costs and create disruptive competition.
Until recently, offers were designed in bulk for large numbers of customers without personalization. Today, operators can leverage rich customer insight to deliver more relevant and contextual offers. Leading-edge solutions offer true digital marketing, allowing service providers to anticipate customer needs and act based on current context and recent behaviors.
The digital ecosystem offers opportunity for mobile operators to build incremental value and deliver more compelling customer experiences. T-Mobile US, for example, is leveraging Netflix and Spotify to offer unlimited streaming of its Binge On and Music Freedom services. AT&T is furthermore treating the Audi “connected car” as another mobile device to be added to a shared data plan while Verizon Wireless is offering a mobile video streaming app called Go90. In the competitive carrier landscape, delivering new digital experiences can help operators set themselves apart.
Mobile is the most effective engagement channel
Google reports that mobile searches now exceed desktop searches in the United States. In Q2 2016, Facebook reported that its mobile advertising revenue accounted for 84% of the company’s total advertising revenue compared with 76% the year before. Clearly, reaching consumers on the mobile phone is critical for businesses, as 54% used a mobile device to shop for products before making a purchase and 35% used a mobile device to make the purchase, according to a survey of mobile users conducted by NinthDecimal.
Given how critical it is for businesses to reach consumers on mobile, it’s surprising how under-leveraged this channel is by most operators. In the digital age, being reached and informed via mobile is part of a good service experience. For example, banks inform customers of overdrafts to their accounts, retailers deliver shipping notifications and Uber communicates when their cars arrive.
Thus mobile operators must leverage mobile devices and apps as natural extensions of their service and their networks. With appropriate real-time notifications carriers are able to structure their services to eliminate typical customer frustrations such as bill shock or lack of transparency, and ultimately create a stronger, engaging experience for the customer.
Cloud-based solutions continue to lead
Cisco Systems estimates that more than 500 zettabytes will be generated by people, machines and things by 2019. There’s no doubt that cloud service growth is going to be accelerated by this unprecedented amount of data.
Cloud data centers deliver better performance, greater scalability and higher cost efficiencies — essential ingredients in an era of big data, segmentation and personalization. We are already seeing immensely successful cloud computing service providers and major players embracing the cloud for highly strategic services. For example, Netflix moved all of its customer-facing services (for 69 million subscribers) to the cloud, eliminating the need for custom, in-house services requiring specialized staff. The cloud will offer mobile operators the most agile and economical path for moving beyond their legacy business back-end systems to deliver new services, business models and user experiences.
Leveraging the trends
I believe mobile operators must embrace these trends to successfully generate new value and increase revenue. When operators leverage existing assets and transform traditional business processes with modern cloud-based infrastructures, they will be able to create rich digital experiences quickly and provide more relevant, tailored offerings to their customers.
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