Tag Archives: telcos

Telcos and the big data-driven opportunity

The big data opportunity for telcos is not a new phenomenon. Vast amounts of data have been generated both internally and externally over generations of fixed and mobile services for consumer, business and partners alike. Over The Top (OTT) players have come into the market and built business models on the amalgamated analysis of data being generated at the customer end from their search, social media and apps store-based activities.

Telcos have missed an opportunity: they had some of the pieces of data in place to address some of these issues, but perhaps neither the telcos nor the market were ready for it. The emphasis for telcos was on internal measures and network-centric KPIs. The focus now has to switch to look at all their data generation points. They need to build a unified view of all activity to improve both the performance of the network as it comes under more and more pressure. But, most importantly, they need to underpin the new business models emerging which include OTT-based services as well as telco-centric ones. This is an inversing of the telco approach: Putting the customer and partners first, and using that insight to help shape the network to ensure all information flows satisfy all parties. That is not to say that the network is not critical. It is, but the emphasis should be on what the network is enabling rather than on the technology of the network itself.

Telcos must step back; gather network-centric, service-centric and customer-centric data into a suitable architecture. This will allow for the interrogation, validation, and extraction of value from the data for all stakeholders. ICT assets exist outside of the telcos themselves to allow this to happen, leveraging both the compute and storage capabilities of the cloud, as well as the algorithms and the data scientists who can work their magic with structured and unstructured data.

Data sources will include the core and edge of the network, the disparate customer, applications and content being consumed as well as the proliferation of social media and comment flowing around the use of broadband, applications and content in both personal and business lives.

The advent of the Internet of Things (IoT) adds another layer of complexity to the data puzzle, but it also allows the telcos to bring their sovereign national assets to bear in building the support mechanisms essential to help drive digital business transformation.

The need has also shifted from a retrospective requirement looking at old data records to a real-time need for insight into customers’ behaviour and the opportunity to adapt service offerings to suit every occasion. In this way, the leveraging of data becomes an essential component of the telco’s contribution to the ecosystem. Sharing some of the data with partners will doubtless become part of emerging offerings. As connectivity approaches ubiquity, it is the insight and knowledge of what is being done by people, households, businesses and ‘Things’ that becomes the fuel feeding the economic engine. As noted above, telcos missed the initial opportunity around data analytics. Let’s encourage all parties to work together to make sure that they don’t miss this next even more exciting wave.

Talend asked Lewis Insight to take a look at the telco and the data opportunity. The resultant independent paper can be found here.

The telco big data opportunity is one of the debate topics we will introduce to the Great Telco Debate in London on November 15th 2016. To find out more, see last year’s highlights and register visit www.telcodebate.com

 

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Are telcos losing pole position as digital disruption impacts demand and supply?

A client recently asked me to present on the top 5 disruption themes in the industry. A pretty broad brief given that I have covered almost every aspect of the industry over the years of being an analyst. So, I had to find a framework within which to identify the disruptions. The following evolved:

  1. Demand is taking over from supply in shaping the telecoms market so the start point has to be the demand side.
  • The individual: how do individuals see the telecoms piece of their digital lives?
  • Households: is the household a market and if so, who is the domestic CIO?
  • Business: what is driving business’ use of telecoms services?
  • Society/government: how is telecoms fitting in with the increasingly joined up whole public sector play?
  • IOT: Cuts across all the segments above, throwing a whole new light on the demand side with its mix of personal, household and business/industry connections. How will this fit and who will provide these business process services?
  1. Supply has to face this massive shift in demand with several constraints:
  • Firstly the flat if not shrinking market for telecoms services in terms of revenue. This is especially acute in the highly regulated European markets but it is increasingly true around the world.
  • Secondly, the revenue position belies a massive uplift in volumes and complexity of traffic. The more granular networks have to cope with video but also with complex series of loops including our personal, business and society links that may be private, open to public scrutiny or part of a 3rd party business process such as in the healthcare sector.
  • It is not that the role of connectivity is lessened, but that it is being absorbed into much broader business activities. The clear end-to-end nature of the early telephony systems has been replaced by either ‘end’ being variable, virtual, and dynamic and often via cloud-based 3rd party application. The connectivity provider may get the blame for poor performance of an application despite there being many steps in the process beyond their control.
  • The disruption on the supply side in terms of investing in the long term suitability of the networks to cope with this new age demand means that NFV , SDN , small cells, WiFi, shorter application development cycles and a generally more agile approach to business all add up to a short term need to increase budgets to get over the investment hump of removing siloed, legacy networks and services in favour of simpler more adaptable fixed and mobile services.

Given the pressures on the connectivity front, telcos are, of course, tempted to shift up the value chain towards the applications that really make different industries tick. And, the IOT also represents new territory to ‘conquer’. Neither, in my opinion, are that easy to achieve. The business applications players are already well versed in the industry-specific apps and that also translates for the major integrators when it comes to IOT in specific industries.

The answer is to adopt a much more open stance towards partnering with other specialist players and accept a supporting role. As ever, the caveat is that every country market is different. Some telcos will continue with prime contracting with a strong business, retail and/or media presence, but all players should seriously consider a multi-channel approach to the customer and let the customer choose.

And, by the way, there is little sympathy for the telco from outside. It is often perceived as having taken high profits over many years and neglecting to invest for the long term of the industry. Outsiders see the telcos as fair game when it comes to exploiting them in the digital marketplace. Customers, of course, see the benefits of their app-based worlds across their different devices as either part of their hierarchy of needs or just their basic human right.

Policy has to ultimately rebalance this demand and supply issue. If telcos are not incented properly to build future-proof networks then the politicians won’t be able to use broadband and digital inclusion as just another thing to throw around during election times.

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Kroes Goes out Blazing … “Telcos are their own worst enemy”

No-one expected her to go quietly and Neelie Kroes, the out-going European Commission’s vice president for the Digital Agenda, did not disappoint. Speaking to the European Telecommunications Network Operators’ Association (ETNO), last week in Brussels, she let the major European telcos have it – with both barrels … Like John Wayne in a bar-room disagreement, Kroes waded straight in, stating her speech could be entitled “Adapt or die: What I would do if I ran a telecom company.” She went on to hit the assembled delegates hard stating “sometimes I think the telecoms sector is its own worst enemy”.

Warming to her theme, (and practically blowing on her knuckles), she told the telcos that they “have to change”. “What is the telecoms sector’s relationship to that digital future?” she asked. “Will you be leading us there? Or will you be dragged along behind, against your will, resisting until the last?”
In addition, , she urged operators to change their views of Over the Top players in the sector, and stressed that digital content providers are a key motivator behind consumer use of broadband services. How many European consumers would want ever faster broadband if there were no over the top services? She asked. “If there were no Facebook, no YouTube, no Netflix, no Spotify? OTT players are the ones driving digital demand, demand for your services! That is something you can work with, not against.”

Kroes, aware of her standing among the telcos, admitted to her audience that they are probably ““all looking forward to the very near future, when the Juncker Commission takes office, when you won’t have to put up with me anymore.”  She also noted that her role will be spread across three different men: Günther Oettinger, Andrus Ansip and Jyrki Katainen – an indication of the expanding importance of the digital agenda for Europe.

“This is a project that will continue under the next mandate; as Jean-Claude Juncker has made clear. It is a project that can ensure our digital future, where a strong telecoms sector supports every European. That is what I long for, and that is what all of you should long for too” she said, with a slight trace of menace in her voice …

I was lucky enough to MC Neelie at a 5G press conference earlier in the year. She may not be liked by the telecoms sector but she does command tremendous respect. Needless to say, these are all themes that will be picked up at The Great Telco Debate, now just over a month away, http://www.telcodebate.com, only this time the telcos will have the right of reply. One of the items on the table may well be whether Neelie has prepared Europe better for the digital future where other regions are still protecting their telecoms players and their old habits.

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Managing the egos in the digital eco system

Straddling different industries as an analyst raises some fascinating anomalies. Telecoms, Networking, IT & Media are, like the US and the UK, often divided by a common language. Some interpretation is often required when talking about managed services, multi-channel, multi-screen, let alone Customer Experience.  And, each industry believes it holds the upper hand when it comes to the convergence of activities.

Listening to recent presentations from different quarters, I am also reminded that the emerging series of ‘eco systems’ also raises the issue of the heavy weights coming into the converged digital world along with their associated ‘size 9 egos’. Coming from a telecoms background, I am only too familiar with the accusations thrown at the telcos of being arrogant about adjacent markets. Cloud is the perfect example: the telecoms and networking industry keep telling us that cloud is nothing without the network. Well, to take a leaf from the politicians’ book, a little humility is required. Cloud is nothing without the virtualisation contributions of storage and processing,  let alone the ability of applications and content to render easily across the different networks, data centres and devices.  Arguably, the network is increasingly nothing without the wealth of apps, devices, sensors and computing power sitting in data centres around the globe. Hence, other industries, and indeed many within the telecoms industry, see the networking piece as the necessary evil that links the world together.

New egos are, of course, emerging with the breakdown of traditional markets. The OTT players are the obvious ones with their global reach and advertising, retail or disruptive business models. At the same time, other players from IT and broadcasting are also adjusting their positions to leverage the digital economy. Even traditional network equipment players are shifting focus and building network operation centres , orchestration tools and services  which will potentially bring them into conflict with the emerging telco position.

When analysing any aspect of the emerging digital world it is, to quote To Kill a Mocking Bird, necessary “to stand in the shoes” of the other party before being too judgemental. It means that not everyone can bring their ego to every situation.  From a telecoms perspective, this raises the issue of ‘wholesale’ and a new approach to channels. Priming every service to the customer in a consumer or business environment is not realistic. The customer will increasingly choose their preferred channel: larger MNCs will work with their preferred integrator (sometimes telcos), SMEs will often choose their favourite local, similarly sized, industry oriented partner and consumers will often lead with the core provider of their core entertainment element. This is not to say that telcos don’t have a major role behind the scenes. The linking of all of the supporting services, analysis of  activities, hosting of services in public and private clouds and overall management and orchestration of all of these moving parts, all represent  valuable contributions to emerging business models.

If a company is to be truly customer centric, then it must be prepared to bury its ego in its Go To Market strategy and work with partners to build the end user experience.

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