How Do Telecoms Compete in the New Digital Ecosystem ?
Acquiring the informed consumer who is pursuing value from stunning personalization services, enabled at low costs poses the biggest evolutionary challenge to telecom survival today. Therefore, successful telecoms in the “We Economy”, are transforming for sustainability through cross-sector coo-petition.
Past and Present Perspectives on Telecom Adaptability to the Changing Digital Ecosystem
The telecom industry currently faces pressure from inter-dependent sectors to venture out of its comfort zone of thriving on huge profits through network expansion and access for a cost model. This is a rather expected outcome for analysts observing industry trends for years, hoping for greater adaptability and innovation.
Even when complacency had set into the working model of telecom companies, a dynamic environment featuring “Over-the-top” content primarily led telecom operators to realize their obvious anxiety about loss of control. Internet companies who were cannibalizing on the telecom revenue were an interesting turning point driving the digital ecosystem to undergo a cross-sector change and possible partnership.
A cross- industry partnership when executed judiciously will be responsible for three-fold benefit of the players involved, given the remarkable nature of the opportunity perceived. Today, industries and businesses in all major fields rely on the power of telecom infrastructure, be it education, healthcare, transport, agriculture or energy.
Content, largely enabled by the dominating nature of tablets, smart phones, and mobile devices is the major industry driver in the modern day digital ecosystem. Telecommunication service providers must enable themselves to invest in the right kind of relationships with providers of marketable content and revolutionary digital products and services.
Further, they must tailor businesses with respect to political and legislative compliance for successful digital content delivery to individual and business consumers. In this way, telecoms will be able to carve a way for themselves along with a cadre of like-minded industry leaders and work towards economic growth and personalization services.
Key Evolutionary Trends and Successful Strategies from Telecom Successes
Data science comes as a blessing for modern day analysts involved in the telecom sector. However, although huge databases of customer information are available with telecom operators, they exist as a trust and boundaries surrounding use of data must be carefully considered. Therefore, protection of consumer data is crucial for future success and sustainability of telecoms.
- Enterprisation of the Consumer is a revolutionary big data crunching outcome that measures the value of mobile consumers by exploring need and behavior of individual users. In doing this, more and more companies are realizing that they will be able to figure out who their most valuable consumers are and directly deliver personalized services
- Another important strategy for telecoms to capture customers for a lifetime would be to specifically focus on Context Sensitive Information and enable mobile devices with sensors that will facilitate this aspect. GPS, cameras, and tracking devices that closely cater to the demands of the present day digital consumer will ensure the success of the telecom enterprise.
- Capitalizing on the consumer behavior led by Machine to Machine communication and the Internet of Things (IoT) will be a major revenue channel for telecoms in future. As devices themselves will become less costly and more powerful in the coming days, consumers will be empowered with low costs to achieve personalization and cross-device communication services, and network traffic will increase considerably. Telecoms will need a well thought out strategy to make the best use of this setting in future.
- Collaborative Business Innovation is the wide view of a plausible strategy that telecom operators can embrace for long term success. In order to realize the best position in the digital ecosystem, telecom companies must establish cooperative relationships with industry players who own capabilities that might leverage telecom business process execution. This would be more meaningful than developing a new capability themselves and essential in their effort to realize benefits across consumer market segments, preventing OTTs from slicing huge proportions of their market share.
Success stories of market leaders who invested in collaborative revenue uptrends are inspiring:
- Alibaba’s 2013 partnership with China Unicom and China Mobile to promote its ‘Taobao Mobile’ among targeted customer groups, taking advantage of the 11/11 shopping day in China was unexpected. The result was in terms of $163m worth transactions in just a 70-minute long period.
- ePlus SIM which comes with a pre-installation of WhatsApp messenger is the result of a partnership and reworked charging model which offers free WhatsApp messaging in conjunction with credits for data use in place of the volume of service usage.
Regulators need to empower telecoms with more freedom to expand their core capabilities, helping them stretch boundaries and realize their full potential. They must also set the tone for data use in terms of data privacy and security on one end of the spectrum and the ability for open standards to prosper on the other. In the end, the nature of co-operative alliances between different industry players will reflect business success and market share.
Important Takeaways for Telecoms for Future Sustainability and Revenue Growth
According to the World Scenario Series, 2015 from the World Economic Forum (WEF), the Information Technology industry, Telecommunications and Media and Entertainment industry are converging to form a Digital ecosystem in spite of certain factors that might make seamless convergence difficult at times. The report recognizes that these characteristics might mainly be attributed to factors related to consumers, market, copyright, privacy and security issues.
According to WEF report, operators in the digital ecosystem can be classified according to two possible facades – the business environment they choose, ranging from open to closed, and their value creation for the society and the economy.
- WEF relates those who operate in a somewhat constrained environment as Safe Havens, who typically provide all digital services through secure systems, making customers feel constrained due to the absence of open standards.
- Further, Middle Kingdoms reflect the cooperative agreement between users and the political and business environment they liaise with. Customers relying on Middle Kingdoms are empowered in a well-connected environment with the most relevant mapping of their needs to suppliers.
- On the other end of the spectrum, WEF places the Youniverse, comprising businesses that adapt operations to survive and succeed through out of the box creative innovative thinking strategies, organic business communities, high customer centricity and personalization focus.
“We Economies” in the Digital Ecosystem, as pointed out by Accenture Technology Vision 2015 are becoming available as a result of collaborative strategies from market leaders to leverage the power of the digital. Whether it is a connected home market from Home Depot or collaborative healthcare workflow between doctors and patients, as envisioned by Philips in partnership with Salesforce, or connected cars by Fiat, all initiatives are pointing towards global change and immense opportunities to explore new markets.
Telecom companies who want to achieve true economic benefit and sustainability in the changing digital landscape must understand the perspectives of users who they serve currently. In future, users will assume a more commanding position than ever, evolving into “active participants”.
Communication Service providers who will emerge winners in spite of the government and regulatory pressure will undoubtedly undergo serious structural and operational changes, traversing towards more openness and user and community driven goal setting. Eventually, the digital ecosystem will drive leaders in the telecom, media, and IT space to converge and deliver “outcomes” for their consumers, redefining goals completely and enabling global change.