Telefonica and the Fourth Platform
Telefonica has officially launched Aura, which for some time it has been calling its Fourth Platform, a seemingly ambitious plan escape the commoditization that the market is imposing on telecom operators and instead generate a true relationship with its customers. Last Wednesday I was with the company’s chief data officers, Chema Alonso, in his offices while he prepared the presentation, watching some demos and playing with the voice interface to understand what the company is looking for and what impact it will have on the marketplace.
What is the Fourth Platform? Put simply, it’s a digital warehouse to store all the data that Telefonica possesses about its users, and that will allow those users to manage their data: if you install or use an app, for example, the company only knows that there has been encrypted data traffic between your apps store and you, and that’s what it stores. There is nothing sinister going on here, because Telefonica knows that it makes no sense to try to intercept traffic in an increasingly encrypted environment. The data users exchange with service providers or products through apps is a private matter: Telefonica is simply the connectivity provider.
However, Telefonica does have data about its customers’ geolocation through the triangulation of its antennas, and it knows which services they have contracted with the company, and of course, the router settings sent to their homes. So, if Uber, for example, wants to know where I am after its app has read the GPS of my terminal, and I have given permission to the Uber app to access my GPS, that’s none of Telefonica’s business. But if Uber wants to know my position through data held by Telefonica, the latter can allow access to that data or not.
In principle, this is no more than an adaptation of European legislation: companies are obliged to manage their customers’ data in a transparent and responsible manner. Initiatives such as the Data Transparency Lab have for some time been about how to manage this data in order to offer users the right service: if that data belongs to the user, then the user should be able to take it when he or she leaves a service, or decide on its use by third parties. In which case, what does Telefonica want to do? Basically, to be able to generate a relationship with the client that allows it, for example, to offer users the possibility of transferring data to a third party, provided that that third party has been approved by Telefonica to access its 4th platform.
This role of guarantor of access is complex one: it is a role to which it is legally obliged, and at the same time, it must be carried out with sufficient transparency to avoid problems. If an app wants to access customer data stored on Telefonica’s platform, it will have to negotiate the conditions Telefonica will offer its customers in exchange for that data. Telefonica isn’t going to charge the company: after all, the data is the user’s and it’s the user who should benefit from its sale. However, Telefonica will check what the company intends to do with it and will prohibit some uses or will oblige companies to offer its customers something in exchange for access to that data, besides offering users a way to control that data through a convenient app and with a voice interface.
At the moment, it is difficult to see where the Fourth Platform is going without knowing what approach Telefonica will take with companies that want to access it.
The Fourth platform is a way to structure client data in an API that allows access under certain conditions without further ado. Whatever Telefonica intends to do with it, remains to be seen. For the moment it has come up with a number of not-for-profit initiatives such as UNICEF using my geolocation data to study patterns of contagion during a pandemic, or allowing Facebook to access my position to start its disaster alert service in the event of catastrophes or terrorist attacks, for example.
We will see what happens when money comes into the equation and Telefonica is approached by companies that want to access data. Telefonica states that it will not sell user data like others do, but will use it transparently and try to generate benefits for users, which in turn will be rewarded with loyalty in order to avoid harmful churn.
If Telefonica is able to offer its users transparent use of their data and provides them with advantages in doing so, it will be trying to develop and create value from a relationship for the first time. If it can do it without it becoming an obstacle or a problem, while at the same time generating value, it could turn out to be an interesting idea.
If it sees the Fourth Platform as a way to become an intermediary and make money from it, then it may run into problems: the moment it becomes an annoyance or hindrance in some way, customers will surely take their business somewhere else.
For the moment, it is too early to think the worst of the initiative or how it will be managed in the future. For the moment, it appears to be an attempt to differentiate Telefonica from other operators, a way of decomoditizing itself and of being something more than a pipe through which data circulates.
In any event, the Fourth Platform is better than some of the ideas Telefonica has come up with in the past: it comes from people who understand the web and who have invested enough in developing solutions for it. In a sense, the Fourth Platform is part of Telefonica’s digital transformation process, and aimed at relating to its customers more directly, to rethink internal information flows, and finally, to modify its business model to function as a platform. The idea is not a bad one, and is likely to bring value, and might even be the basis for reimagining its future. But for now, let’s see what happens.
If users ignore all this, if nothing is installed and it ends up managing nothing, Telefonica will not extract value or set itself apart, and the whole thing will soon be forgotten.
If Telefonica starts managing its platform over-zealously and prevents or makes it difficult for certain services to reach customers when those of other operators can enjoy them, it will likely run into problems.
But if Telefonica provides something its users want that operators cannot match and is able to let the world know about it, then it should be able to set itself apart from the competition.
Telefonica has built an API, on its own, which is no small feat, with some of its clients’ data to which third parties can connect, and intends to manage it intelligently. If it succeeds and that is somehow translated into something attractive or advantageous, we will have to wait and see.
(En español, aquí)
