An unprecedented transformation in the Telco Industry. Growth opportunities for 2018

Telco is in a difficult situation. While the business model is fundamentally at risk, when you look at it from a long-term perspective, there are a lot of challenges even in the short and mid-term.

Exaggerated bargains, OTT players, increased competition, the risk of trying to react to IoT or other solutions, regulatory constraints, the roaming topic operators have in the EU. In short, a lot of things that put Telcos under pressure. At the same time, shareholders expect stability and increased returns, which is why profitability will be key focus for this industry in 2018 as well.

Changing the way of thinking

Operators don’t need to reinvent the wheel, they can learn from other industries and don’t have to start from scratch. Retailers and banks are excellent examples as digitally-first transformations that prioritise online/mobile as primary sales channels, with personalised in-store experience, offers and dynamic pricing.

It takes years before you are great, but step by step, it can be done. You can have a strategy built on these parallel transformation pillars:

  1. Cutting costs
  2. New revenues & business models
  3. Focus on creating amazing customer experiences
  4. Infrastructure and platform changes supported by analytics, AI, Lean and Agile operations

And before going deeper into new business models, an interesting remark that caught my attention at a presentation in Prague was the recommendation made by Manfred Moormann, Head of Digital Business, Telekom Austria Group. Manfred said that “It’s better to give more (volume, speed, space) than to ask for less money for your services.” So, instead of going into a price battle, it is better to create bundles and offer more at the same price.

To start the conversation in your own company, here are a few ideas on how to use the digital services that could generate billions for Telcos and avoid being disrupted in 2018.

New business models

Become a new digital lifestyle provider and generate more revenue from smart home apps, healthcare apps, utility payments, home energy market, cable service or even transportation subscription plans.

To understand better, I will give just two examples. First, one of our telco clients from Asia offers a new service to their customers, which intermediates tech buying and paying rail tickets through their platform and in this way, is increasing revenue.

Another example is from a SAP Telco event where a telecom operator from Europe told us that they are investing in a healthcare apps-wearable. Through these devices, the operator’s customers can connect the wearables to their phones and so as to be called instantly when their elderly parents have major health issues, while the app calls the Medical team.

IoT transformation is underway and the interconnections linking people, devices and organisations are multiplying. The traditional roles of telecom service providers will become obsolete if they don’t start to change something in the way they are doing business.

A Telco company can be an IoT enabler offering support for fleet management, smart parking solutions, smart cities and many more. Generate and release as many micro-services for your customers, that can generate more income.

Technology as a business disrupter

You can be open-minded and take innovations from other industries and see how you can apply them in telco to personalise your customer’s experience and bring it to a new other level. With the right tools in place, you can anticipate behavior and take proactive actions with advantages both for your business and your customers. Information is everywhere, and you just need to transform it into knowledge.

Imagine that you could identify hidden sales performance drivers from your online shop or eCare in a minute, without waiting for the next meeting (social media results, performing target group, buying patterns, customer segmentation and much deeper insights). Predictive analytics & Machine learning with SAP Hana is just one example.

Another example is Watson Visual Recognition, the electronic brain, that based on a profile picture can offer you a lot of valuable insights.

Just imagine, when registering users if we ask them to use their social profile. If that profile has a picture, based on it, we can use the visual recognition system. We don’t have to ask any more people for demographic information; we can infer their age, gender and we can conclude other elements about the professional profile of somebody just from a picture.

You can train AI to identify also other things in the photo, like brands, for example. Or going even further we can use it to analyse our followers twitter profile and have a personality portrait.

These are fantastic insights extremely useful for the marketing and sales department. They have the chance to do a Buyer Persona anchored into the reality, with user’s data, containing details about their needs, attitude and behavior.

Use ChatBot as conversational commerce or even voice recognition for orders (Amazon Echo). You can use your Facebook messenger as a contact option and use the ChatBot as an additional customer engagement option where your customers can browse, order or search products from your shop or even receive recommendations.

From my perspective, there is no other choice but for telecom companies to adapt their digital strategies and fundamentally change their operating and business models if they want to succeed in such a competitive market.