The Rise of Insight-Driven Telcos


Senthil Ramachandran

April 10, 2015

Big & Fast Data: The Rise of Insight Driven Business – a joint study by Capgemini and EMC highlights that more than half (56%) of the respondents expect their investment in big data over the next three years will outstrip past investment in information management. Four opportunity models emerge in this context:

  1. Efficiency and cost focus
  2. Growth of existing business
  3. Market disruptions resulting in new revenue opportunities
  4. Monetization of data itself, with the creation of new lines of business

Let us see how these opportunity models apply to the communications industry in being relevant in a new normal:
Efficiency and Cost Focus – Network and IT optimization
We hear from Mobile Network Operators (MNOs) that the return of investment is not realized from the  past network upgrades as decisions (including  4G roll out) are based on limited traffic history rather than insight driven decisions such as ingesting, storing and analyzing the traffic, location, usage behavior, revenue/cost per cell and customer segment at scale using advanced analytics techniques.
Hadoop is the de-facto core component for Big Data storage.  Most Capgemini telecom clients are building strategies and architecture to make hybrid data management system shared between existing traditional data warehouse and Hadoop based platforms. Many of the new big data technologies (Hadoop based) are open-source and use commodity hardware, a combination that is often 20-30 times cheaper per terabyte than traditional data warehousing technology. It helps  reduce  total cost of ownership with regard to storage to perform value based network upgrade planning.
Growth of existing business – Proactive customer care 
One of the key factors to increase Net Promoter Score is proactive customer care. Mobile operators offer smart phones with mobile apps pre-installed that enables subscribers to asses voice quality and data speed while on the go.  This proactive initiative in turn provides insights that help service providers  grow  existing businesses due to transparency and increases net promoter stores.
Market disruptions resulting in new revenue opportunities – Location based promotions 
The mobile operators are in a  unique position to gather valuable customer  data  – the location of the mobile subscribers, subscriber demography and internet usage behavior patterns help  derive  insights to create  location-based marketing strategy for cross-sectors (example: retailers or e-commerce companies). But it will be within the boundaries of applicable data protection laws and regulations.
Monetization of data itself, with the creation of new lines of business – IoT monetization
Though IoT is a trillion dollar opportunity, Average Revenue Per User (ARPU) are anticipated to be low. To deal with this, the operator should step up to build insights platform beyond providing connectivity. The benefits of insights platform enables transparency of data traffic, isolation of IoT device communications failures from device malfunctions and eventually customer perception about the CSPs.
Capgemini has recommendations for different enterprises under communication industries:

  • – Mobile Nework Operators should focus on network optimization by integrating network performance, customer and revenue data to gain valuable insights for optimization and upgrades.
  • – Mobile Virtual Network Operators should focus on proactive customer care and personalized offer by collecting data from – retail stores, online web-shops, prepaid/post customer history with customer behavior pattern to build customer value analytics to grow  existing business.
  • – Network equipment vendors should focus on customer experience analytics that build around the products and services offered to their B2B customers (eg: Operators, IT enterprises etc).

But all of them should look at IT cost reduction by building Hadoop based platform using commodity hardware.

Note: This is the personal view of the author and does not reflect the views of Capgemini or its affiliates. Check out the full article here.

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