BLOG
DIGITAL

From Dinosaurs to Unicorns - Why Telcos Must Go Digital

According to industry forecasts, the number of mobile internet connections will exceed 10 billion by 2018 and will be 1.4 times greater than the world’s population. It’s clear then that there is a wealth of opportunity for fully digitised Communication Service Providers (CSPs).

The Business Case for Digitalisation

According to industry forecasts, the number of mobile internet connections will exceed 10 billion by 2018 and will be 1.4 times greater than the world’s population.  It’s clear then that there is a wealth of opportunity for fully digitised Communication Service Providers (CSPs). When you consider that telecommunications is both a driver and enabler of digitisation, contributing to our always-on and increasingly demanding consumer society, it seems ironic that Telcos themselves are struggling to achieve a smooth digital transformation and failing to delight their customers.  A recent Capgemini Telecoms Report shows that the overall Net Promoter Score (NPS) for the industry is negative and that 58% of consumers are keen to switch to a digital-only operator with competitive data plans. Interestingly the younger, smaller, more autonomous, agile Telcos operating a digital or hybrid but digitally-weighted model, achieved a much better NPS.

Dinosaurs & Unicorns

If you’re in any doubt as to how important the NPS is, you’ll be interested to know that the report ties it directly to revenue, demonstrating that “high-NPS Telcos garnered an average revenue growth of 33% over 2012-14 whereas the low-NPS Telcos suffered a revenue decline of -7% on average over the same period”. Over the Top (OTT) service providers offering new digital experiences such as Mobile Money Transactions, micro-banking solutions, digital media such as on-demand video and IoT connected services, are gaining momentum and popularity with customers. Media and video was less than 10% of traffic in 2010 but this rose exponentially to 50% last year. To remain competitive, these older, more established CSP Dinosaurs need to find a way to model the Unicorns and take a more customer-centric approach, discovering what digital telco customers require, streamlining their processes and operations to more quickly create a desirable product, building out a user base and monetising their product in a much shorter space of time. 

Go Digital

For the new wave of customers who have only ever lived in a digital world, a fully digital, seamless, omni-channel customer experience (CX) is essential. To achieve this, CSPs need to digitise their Business Model, CX and Operations. We will be looking in more depth at the challenges and most effective strategy for this digital transformation in part 2 of this Telco blog series. Right now let’s look at the products and services that Telcos need to provide on in order to become the digital dynamos their customers demand.

Personalisation – This is the era of seemingly infinite choice, so customers expect a personalised experience that gives priority to showing them information that’s geared towards their individual preferences, as demonstrated by previous behaviour and purchases. For Telco’s this means embracing the power of Big Data and Analytics and acting on the insights available from the customer feedback loop. This customer information enables highly targeted marketing and sales, better customer services and improved network operations. In addition to boosting customer loyalty this also cuts down on playing guessing games and wasting resources, freeing up time and money for reinvestment elsewhere in the business. If you’re wondering just how important this is for boosting revenue, then consider Gartner’s estimate that by 2017, mobile advertising will be worth $41.9 billion in the US alone.

Customer Support – According to a recent Capgemini report Over a third (34%) of consumers believe that “reliable customer support” in terms of purchasing, asking advice, complaints and aborting out issues is a must-have for a mobile network provider, second only to “affordable data plans”. However for the digital customer this means digital support; millennials are not interested in walking into a physical shop and talking to a real person face to face. In fact only 6% of consumers of high-NPS mobile operators use call-centres to make purchases compared to 25% of consumers at low-NPS mobile operators.

Blockchain & IoT Solutions – Mobile payments, banking and commerce all represent huge digital opportunities for Telcos with blockchain solutions facilitating, for example, digital asset transactions that require micropayments such as when we buy music, apps and games for our mobile devices. In smart cities where the IoT comes into its own we are seeing new services spring up such as public smart device charging stations. CSPs need to capitalise on IoT connectivity to create an intelligent network system which predicts and proactively connects their customers’ myriad devices to one another and to other products and services they use, to better enable their digital lifestyles.

OTT Content & Services – According to telcocmstechnews.com, Western European OTT television and video revenues will more than double by 2021 with the market being valued at $14.6 billion up from $6.4 billion in 2015. So it makes sense for CSPs that are seeking to be more competitive in this digital market, to take a leaf out of the playbooks of providers such as Netflix, YouTube, Hulu, Skype and Facetime and Whatsapp and provide OTT services and maximise the revenue potential of their own pipes, rather than merely enabling other businesses to profit from them.

Network Quality - Customers’ obsession with smartphones and mobile broadband, and the associated data explosion, means that network quality is another important factor for a great CX and lack of quality is a key reason for customer churn. The fact that some customers favour voice, while others use more video and email also means that Telcos need to find a way to balance the quality of capacity, coverage and speed. The crucial factor to success here is to use data and feedback to understand how and where customers use the network so their requirements can be met.

So now that we have an overview of what Telcos need to do to become more digital be sure to read part 2 in this series of blogs about the digital transformation of Telcos when we will be looking at the challenges and a strategy for a smooth transition to digitalisation.

Lara Irwin
Lara Irwin
Marketing Director
+442070148919
todo todo
contact us
  • Sogeti UK
    Sogeti UK
    Make an enquiry
    0330 588 8200