Alon Aginsky Alon Aginsky CEO & President - cVidya

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The big, big data opportunity

  • The latest round of financial results highlights the painful squeeze being faced by communications service providers (CSPs). In many markets, voice and messaging revenues are being eroded by over-the-top alternatives, while regulators are mandating cuts in mobile termination rates.

    Competitive and regulatory pressures make investors nervous about sanctioning the investments needed in LTE networks to meet the smartphone-induced surge in demand for mobile data. With prices falling, they are worried that CSPs won't be able to make a healthy return on these investments: Each year, CSPs seem to be providing their customers with more for less. In 2012, the number of mobile broadband connections worldwide grew 43% to 1.6 billion, but mobile broadband revenues rose just 21% to US$244.2 billion.[1]

    Tapping rich datasets
    Still, the longer-term outlook for CSPs remains bright. It may not seem like it right now, but CSPs are in a strategically strong position. That’s because big data is becoming a potent economic asset and telecoms networks generate massive amounts of data. In many respects, CSPs data is richer than that captured by the leading exponents of big data, such as Google, Facebook and Amazon.

    For example, a mobile network connection can reveal where an individual goes, how long they spend there, who they contact regularly, which apps they use and which web pages they visit.  With the right IT systems in place, CSPs can also access valuable real-time data, such as where an individual is right now, which direction they are heading in and how quickly. As well as enabling the CSP to provide customers with highly personalised services, such datasets could help match buyers and sellers across the economy.

    A CSP could use voice, messaging and web-browsing data, for example, to identify football fans and then offer them a discount on a subscription to a sports channel showing Premier League soccer. Similarly, a restaurant with a shortage of bookings could use real-time data from telco networks to send people in the vicinity an one-time offer such as 30% off any main course, this evening.

    At a more strategic level, the data generated by telco networks could be used to realise an array of socio-economic benefits, enriching citizens' lives. City planners, for example, could use the data from telco networks to decide where to build a new road, a new hospital or railway line.

    The challenge for CSPs is to overcome the cultural, organisational, technical and, in some cases, regulatory factors that are preventing them from really harnessing the enormous volumes of data their networks are capturing every minute of the day. Legacy IT and network systems may mean much of this data is inaccessible. Or a silo mentality within the CSP may make it hard to combine data from different sources. In some countries, regulations may mean CSPs have to persuade individuals to opt-in to receive offers based on their personal data.

    From business protection to business growth
    But all of these obstacles can be overcome. Many CSPs are already collecting, cleaning and analysing large volumes of data in near real-time for business protection purposes – to guard against fraud and to prevent revenue leakage. Today, these datasets typically don’t move beyond the finance department. But with the right analytical tools this data could be used by marketers to make individuals compelling offers both on behalf of the CSP and on behalf of third parties.

    Although such an approach may raise privacy concerns for some individuals, they are not insurmountable. CSPs should ensure that personal data doesn't actually leave the business - the data analysis and offer delivery should be performed in-house. If CSPs analyse the personal data in a smart way to offer individuals real value, rather than irrelevant spam, they will opt-in. The key is to build up a relationship of trust based on a genuine value exchange.

    In summary, big data isn't hype and it isn't futuristic. It can be harnessed today and it can put CSPs back on a growth trajectory. Now is the time for our industry to exploit one of its biggest strategic assets - a continuous connection with consumers.

    [1] Sources: Ovum and Wireless Intelligence

    Alon Aginsky
    About Alon Aginsky Alon Aginsky works as CEO & President at cVidya
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