Category Archives: The Great Telco Debate

A ‘brand’ view of the telecoms industry

Tim Pritchard, Kantar TNS at the Great Telco Debate

In the spirit of getting outside perspectives on the evolving telecoms market, Tim Pritchard from Kantar TNS, the WPP company which is the largest custom research business in the world, joined the Great Telco Debate on the role of telecoms in the digital economy. The brand perspective raised some very interesting and contradicting themes:

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  • The customer is changing. Traditional segmentation is no longer valid. ‘Generation CX’ (young, old, educated, working class – a slice of everyone) is the new reality and brands either listen and respond to customer feedback or risk becoming irrelevant.
  • It is widely accepted that customer loyalty drives profitable revenue growth. As such, customer experience (CX) is non-negotiable. But how does it fit in with today’s telecoms ‘product’ given the world of apps and over-the-top content consumption?
  • Corporate mission statements and brand values tend not to include the customer – you’ll be amazed how few companies, even those spending tens of millions each year on CX, have an agreed customer strategy. Get it written down and socialised across the business so that everyone from the janitor to the CEO knows it, and uses it to frame their work, their thinking, and their daily behaviour.
  • WPP’s 2017 Global BrandZ  shows that 8 of the world’s most valuable 50 brands are telcos. A further 15 are technology companies. You’ve had the power for a long time, but have you leveraged that power? I would say not.
  • Most Telcos have adopted NPS (Net Promoter System) yet their NPS scores are among the lowest of any industry. Virtual network providers often enter markets and quickly start to outperform the network owners, sometimes by as much as 20-30 NPS points. It shouldn’t be that easy – there is something clearly amiss among incumbent telcos to afford disruptor brands that opportunity to create true CX differentiation.
  • A focus on self-serve business models may help to save telcos money but, aside from the customer groups who actively prefer to self-serve, tend to harm rather than enhance brand building efforts.
  • The customer voice is vital, and capturing customer feedback on specific interactions (preferably in real-time) provides critical input for both tactical response and strategy development, as well as brand building

There are 3 basic rules:

  • Don’t let customer down, especially at critical times (i.e. the moments that really matter)
  • Deliver emotional and functional experiences that stimulate long-lasting feelings for the brand
  • Do things that reinforce brand choice and deliver services to customers in a personal, relevant, and needs-satisfying manner

In short, the role of brand is changing with the digital market. Telcos and tech companies benefit hugely from high brand valuations yet typically suffer from poor customer service, reflected in low NPS scores. Part of the challenge is identifying what role the telco plays in the lives of ‘Generation CX’. Identifying, enunciating and promoting a clear customer strategy is vital to re-positioning the telco for the coming generations.

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Learn to read the digital wind: A group CIO’s perspective of the state of the telecoms nation

Phil and ChrisOne of my highlights from the last Great Telco Debate was my informal interview with Phil Jordan, former Group CIO from Telefonica, about his 20 years in the telecoms industry. We talked about the highs and lows of the role, the relative role of the CIO, telco transformation and the state of the market. Here are some of the key topics and themes:

Highs and lows of a telco CIO

  • Phil believes the industry should be proud of being at the heart of building the digital economy and helping people run their digital lives
  • Almost every day for Phil had 4 highs and 5 lows: One of the lows is that telecoms is a much-maligned industry and ‘we’ do a great job of kicking the proverbial out of each other when we gather for an industry forum such as the Great Telco Debate. ‘We’ continually complain about how difficult it is and how poor ‘we’ are at servicing customer needs.
  • A low, especially recently, is how frustrating it can be getting the industry to shift gear. We are running out of time to remain relevant and at the centre of driving the digital revolution
  • The vast majority of time has been spent fighting internally with colleagues over the digital transformation of the organisation rather than fighting with competitors, dealing with regulators or building relationships with suppliers

The relative role of the CIO

  • Telcos were traditionally run by network people and IT was very much an afterthought, resulting in overly complex systems. According to Phil, very little architectural integrity exists in telcos. IT was a system of record but is now moving to be the differentiating factor with the network becoming the underlying product. The network is, of course, the biggest asset but it is not a source of differentiation. Phil suggest that the real differentiator is the leveraging of customer data. This is a huge transition for telcos to move from an engineering mentality to actually serving the customer. All this places huge technical, skills and leadership demands on the organisation.
  • It is still difficult to operate at a pace within the telcos but they are gradually realising the new innovation paradigm. From the CIO perspective, running the network with a handful of suppliers, looks easy. The IT side, on the other hand, has literally thousands of suppliers. And, the CTO is the one person in the telco who understands the network.  Everyone thinks they understand how IT works or should work!
  • The shift to ‘X as a service’, along with changing suppliers relationships, is indicative of the shift in balance between CTO and CIO.
  • There has been a degree of complacency with the telcos and their suppliers. There seems to have been a ‘hand break’ on virtualisation because it represents the end of an era for so many parties both in inside and outside of the telcos. “Virtualisation is turkeys voting for Christmas. Having said that, it isn’t a straight route. In sailing terms, it needs a bit of tacking and jibing across the direction of travel in order to get to the end destination – and we need to learn to read the wind!”
  • Telcos have been guilty of not understanding the innovation agenda and where it has been coming from.

Transforming the telco into a digital business

  • Transformation is difficult because it was easy running a telco when profits were high, competition low and everyone knew their place! The commercial and technical leadership used to “rock up and run the business”. All of a sudden there are new competitors, margins are shrinking and innovation is coming from other places. This requires a different kind of leadership.
  • It is noticeable how many telco executives come from management consultancy, finance or law whilst the hyper scale companies are led by tech entrepreneurs
  • According to Phil, the role of the CIO is very much one of being a story-teller and explaining how things work to the different LOBs, OPCOS and levels of management. The CIO, in many ways, has a better end-to-end understanding of the way the business runs. This is because the CIO can’t get away from everyone asking him how everything worked. So, in short, a major problem exists at the top of telcos not understanding the way the business runs and not really understanding the art of the possible when it comes to technology
  • Phil believes that transforming a major telco is 3-4-year job and “anyone who tells you it is less is lying or have never done it before”.

The state of the market

  • On the consumer side, the risk of being marginalised is real. The motion for the debate was that we will buy our broadband from Google and Amazon in the future. We probably won’t even buy broadband directly, but included in services from a variety of companies, including the OTTs.
  • On the business side, there are enormous possibilities as business models emerge that require connectivity. One of the problems is that telcos think they should be running Facebook. The problem is that the money is in B2B, IoT and AI.
  • We need to build offerings into the emerging digital business models. Wholesale was the poor relation because its margins were considerably lower that the highly profitable retail and business service. As those margins ‘head south’, wholesale may well look more attractive!
  • Telcos run the risk being relegated to mere utility bandwidth. Does this mean we will be part of a much smaller industry in the future? Phil believes there will be a consolidation around the connectivity market with the leveraging of data providing the new impetus, innovation, and support for the customer experience. If the telco can give control back to the customer regarding their data, there is potentially a different relationship. Having said that, there is still a major role for the telcos to play in the digital world, society, and lifestyle whatever the ecosystem and relative roles.

Phil is now launching his retail career at Sainsbury’s. He suspects that the wafer thin margins of the high street will have the focus most definitely on the usage of data and building a clearer understanding of the customer and their behaviour. Perhaps he will bring these lessons back into telco in the future!

You can watch the full interview  from the Great Telco Debate here

Thank you Phil for your insight, openness and humour. The industry will miss you.

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An Economist’s perspective on the future of telecoms

Getting external perspectives always adds to the richness of the Great Telco Debate.  Mark Gregory, Chief Economist at EY in London and I discussed the economic realities of telecoms and the digital economy going forward. Here are the key themes that emerged:

  • Measuring productivity in traditional economic terms has been challenged by the Gig economy and its processes: ubiquitous connectivity is destroying traditional value such as in the taxi, hotel or retail markets but is creating new value as different parties are brought together on the exploding number of platforms for consumer and business use
  • ‘Digital’ was formerly about hidden components such as semi-conductors, servers and 3D printing. It’s now all pervasive and, from an economist’s perspective, it’s about how all industries work, the potential impact of technology and where value is created
  • The potential ubiquity of ultra broadband diminishes the relative value of connectivity since scarcity tends to create value
  • Telecoms is in the group of General Purpose Technologies (GPT) as described by Robert Gordon in his assessment of the impact of IT on productivity. It may be a disproportionately important enabler in a more digital world, but it is nonetheless an enabler
  • Telecoms (broadband) should have a relatively bigger role going forward but that depends on how it evolves and how it allows other industries to evolve
  • Telecoms first of all has to deliver its role into the digital economy as an enabler. Moves into content delivery and other services have been only variously successful
  • Telecoms must think about how it can enable other value chains rather than dominate them by underpinning new processes and allowing new apps to flourish.
  • Politics is becoming extremely important for the future of telecoms. Regulators have to get out of the mindset of capping prices if they are going to allow the telecoms industry to evolve into its new digital economy support role. The telcos have to be able to benefit in terms of value capture if they are going to be incentivised to invest for the future.
  • 5G is what some of the financial community are most worried about in terms of another big chunk of investment being required.
  • Digital skills are important as automation shifts the focus for human roles in the digital economy
  • As we look at Brexit some sectors are clearly going to be impacted:
    • Financial services and Life Sciences because of the regulatory environment.
    • Automotive could be impacted but this is still not clear
    • Telecoms does not appear to be in the high impact category.
    • Data protection will be a major focus given European regulation.
    • The labour force is the one to keep an eye on – digital skills and a more flexible work force capable of coping with the the dynamics of a digital market will be vital.

Here is the full interview:

Keep November 29th 2018 free for the next Great Telco Debate. If you have topics you think are shaping the future of the industry and would like to contribute as an ‘expert witness’ please drop me a line.

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What did the Great Telco Debate learn from MWC?

The Great Telco Debate may not be on the scale of MWC, but it is a year long process of analysing the telecoms industry from every possible angle to shape the programme for the event. MWC was a great opportunity to reconsider the topics from 2016 and draw from market developments. Using last year’s debate titles, here are my take-aways from the Barcelona jamboree.

  • Telco’s role in the digital economy: The jury is still out on the extent to which telcos can exploit digital. There are plenty of autonomous car examples but little new revenue upside for telcos – emphasising the need for ‘ruthless’ simplification of the business (Cisco)
  • Customer experience: Telefonica’s 4th platform does look like a refreshingly new approach to acknowledging peoples’ data and giving something back to the customers as well as improving overall service levels
  • Softwarisation of the telco: This is probably the most important aspect of this wave of industry transformation and there was plenty of evidence from open source virtualisation and edge computingto cloud the picture (Amdocs, HPE, Huawei)
  • IOT: The industry is finally realising that massive connectivity revenues are not likely from IOT, but the real demand will come from supporting different industry ecosystems via platforms and overall integration (Ericsson, Cisco)
  • 5G: It was fascinating that most 5G initiated discussions dropped back to a more robust 4G delivery to support video as well as overall data needs (Ericsson, T-Mobile US ,Telstra)

There is no doubt that telcos are acknowledging the reality of innovation coming from ‘Interpreneurs’ and suppliers, as well as from apps developers driving the telco to be more open and accepting of ideas ‘not made here’ (Orange).

Ironically, given the endless pursuit of innovation, the re-launch of the classic Nokia 3310 drew a lot of attention. Harking back to simplicity, fewer messaging options (no apps) and longer battery life, certainly grabbed peoples’ attention. However, I wonder if those writing about the old classic were more represented by the older generation rather than the younger, smart-phone raised app enthusiasts!

In terms of discussion topics for the Great Telco Debate 2017, doubtless other themes will rise to the surface. Security is one obvious elephant in the room, as is the role of telco in industries such as automotive and healthcare. Also, Artificial Intelligence will worm its way into every aspect of the market and promises many changes in performance, behaviour and outcomes.

Whether you are from the telco, supplier or analyst side or indeed any other interested party, please get in touch if you have ideas you think should be incorporated into the Great Telco Debate on 30th November 2017. I look forward to seeing you there.

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The Hyper-connected individual meets the Healthcare system

At the Great Telco Debate last year, one of the biggest laughs was when my co-host Graham Wilde was attacked for buying his wife a FitBit, implying she needed to lose weight! The success of these so-called health tracking devices, and their associated apps, is an indication of how wearables, combined with smart phones and tablets, are beginning to change our behaviour and our lives.

Outside the healthcare industry, these devices with their life-changing outputs are seen as wondrous. However, inside the healthcare sector, they are often dismissed as being toys providing inaccurate and misleading information.

The consumer electronics industry, with its dynamic gadget crazy geeks, coming up against the established healthcare profession, with its hospitals and insurance organisations, represents a key battleground for us all. Regulation in the medical area is rife, and so it should be. Consumer electronics is a considerably more liberal environment. So we have the challenge of making money and identifying new markets on the one hand, whilst accurately treating people with illness and disabilities on the other.

In previous articles I have considered the world’s billion disabled and opportunities for assistive technology in the form of regular smart phones, wearables, apps and the Internet of Things (IoT). I now think it is worth expanding the discussion to include the broader healthcare industry. The simple reason is that if we get it right for the healthcare sector as a whole, the solutions will include everybody, whether suffering from a short-term illness or long term disability.

We all have experiences which involve the healthcare system at some point in our lives. As with many industries, the Internet and availability of smart devices of all types gives us an insight into a world that was previously shrouded in mystique.

From home: remote diagnosis

Before we even enter into a doctor’s surgery or hospital, we are armed with information from our web searches and data from our mobile health lifestyle apps. Exercise, diet, alongside our essential measurements are tracked to give us an indication as to how we are doing. A blip in how we feel, or in the data, might trigger an Internet search – often leading to inaccurate self-diagnosis and unnecessary alarm.

Today we are seeing the beginnings of new fee based services where medical professionals provide consultation via online chat or even video . In many circumstances, such interaction will be sufficient to satisfy the ‘customer’ that everything is fine; or can generate sufficient advice, or even a prescription, to address the issue. If not, escalation to a more formal, traditional consultation will be necessary. This potential virtual triage could be useful for the industry in reducing the number of people unnecessarily entering the ‘real-world’ healthcare system.

The traditional medical system

In surgeries and hospitals, medical professionals can benefit from costly devices and services necessary to diagnose and treat the individual. These devices are increasingly connected through multiple channels allowing even remote specialists to access the patient records and produce a diagnosis. Furthermore, scans which were previously too big to circulate, are now fizzed across the network infrastructure for everyone to share on their multiple self-provided or hospital-provided devices.

Furthermore, we shouldn’t lose sight of the fact that a specialist surgeon could perform an operation via a robot, and indeed with a virtual scalpel, given the right connectivity, video and local support.

And, of course should the condition be acute, an ambulance also completely connected to the medical facilities can be dispatched with diagnostics and treatment carried out by the paramedics. Perhaps we could think of this as mobile triage!

Following medical intervention, physicians and nursing staff are increasingly armed with sophisticated bed-side monitoring equipment, once again feeding into central patient records. However, this is increasingly being complemented with more smart phone based offerings. That’s not to say the clipboard on the bottom of the bed will disappear, but that this ‘analogue service’ will be complemented by electronic versions with analysis and alarms to notify staff.

Developments in devices, sensors, applications and medical add-ons are all helping to change the dynamic of treating conditions:

  • Self-administered blood monitoring is radically changing the treatment of diabetes and dramatically lowering the levels of insulin required
  • Pseudo off-the-shelf 3D-printed artificial limbs are accelerating limb replacements
  • Sensors, cameras and microphones are allowing sensory enhancement or indeed replacement.

Smart phones are the unifying element but this doesn’t have to be the case. We will doubtless end up with many separate connections and data flows from our bodies to our carers, physicians or indeed to our own smart devices.

Aftercare

On leaving the formal hospital environment, there are now many new opportunities to reduce the frequency of return visits and reduce the cost of supporting the patient. The aftercare hitherto confined to follow up consultations at the hospitals can increasingly be delivered via video-based services and ideally some more dispersed facilities in the local community. After all, consultation on how well a hip replacement or skin condition has improved can just as easily be done over a Skype link. As with many industry transformations, this requires an organisational, process, financial and cultural shift. If the follow-up consultation is carried out perfectly well by video link, why should it only command a fraction of the fee usually assigned to an in-person or  in-hospital consultation?

Social care

Follow up social care, whether in the person’s home or in a social care unit, can also benefit from this ultra-connected world. The vastly expensive scanners obviously cannot be dispersed out into the community, but care staff and patient associations can use much simpler, slimmed down technology as well as some of the more consumer-electronics like devices and the myriad of apps to give both the patient and the carer a better-informed understanding of activities. Scheduling appointments is an obvious first step to make better use of care staff. But simple data gathering from questioning the patient, or using medical devices operated by the carer, will certainly be of incremental value to any consumer-like devices in the form of blood pressure or heart-rate monitors and motion detectors.

And, if a doctor is required to visit the patient, then mobile devices such as ECG machines can feed data back into the patients’ records over cellular or WiFi networks.

Long term care is a major focus for the industry today. With an increase in chronic conditions and subsequent drain on resources, anything which can reduce the total cost of this service, whilst improving the quality of care given to individuals is a ‘no brainer’.

The journey

So, the entire journey from initial Internet search, through formal medical intervention, to aftercare can benefit from the better connected environment. There is, of course, the issue of who pays – public or private. This depends to a large extent on individual countries. No doubt, the best use of fixed broadband/mobile technology, smart phones/tablets, wearables/IoT, consumer/industry-approved apps and a willingness for all parties to adapt to the new environment will pay massive dividends.

Who can argue that the future daily routine of a nurse or doctor will consist of a couple of hours on face-to-face duty, followed by a couple of hours online?

It is vital when designing devices and apps in this area that simplicity and accessibility for all levels of technical ability are built in from scratch. In many countries for the foreseeable future we have an ageing population that is not smartphone literate. This could be one way of bringing many into the touch screen world as long as we don’t confuse the issue with overly complex solutions. Technology exists to hide the complexity behind a simple interface or different accessible features depending if a person has limited vision, dexterity or mobility. After all, if we can build a button to simplify the ordering of a pizza, we can build an app button to address the key requirement for a particular patient and their needs.

What is clear, is that the lines of demarcation between home, formal medical facilities and after care are blurring. Volumes of data and information flows between all participants are increasing with personal and medical devices. Centralised patient records fed from all points are vital. Technology has to be embedded into simpler processes in order to underpin the new healthcare regimes.

We are all part of this particular journey. Let’s encourage all parties, patients, medical staff, administration and perhaps most importantly, politicians, that this is one way that technology can literally help us all to a better life. Many industries have been disrupted dramatically through devices, apps and connectivity. We could see a restructuring of the healthcare sector. Who knows, it might lead to more local services and a move away from the previous trend to bigger and bigger hospitals.

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