With traditional business being eroded in the telecoms sector, operators are now faced with almost too many opportunities to be able to address. They are desperate to find the ‘differentiator,’ the thing that will attract and keep customers better than their competition.
Part of the problem is that they tend to come up with the same idea at the same time. They go to conferences thinking ‘Ha, I bet no-one else has come up with…’ and then they watch a clone of the presentation that they gave to internal stakeholders the week before. Or they go completely outside the box, their CEOs put baseball caps on backwards, pretend to be teenagers and cause media attracting disruption. Which is fine, but may – or may not – create only a short term advantage.
Essentially, there are three strategies that operators can choose from to become the winners over the next few years. Some may choose more than one option.
The first is to explore new markets – no, not new civilizations – such as the M2M or Internet of Things (IoT) market. Connecting things is a business of scale, primarily, but they need to find where they add value. Is it in the connections, the provisioning, the monitoring and alert area – or something else, perhaps in partnership with others. It is worth noting that even the IoT acronym might be misleading as industry analysts such as Peter Cochrane believe that there is no way that ‘the internet’ can scale to support the billions of human and machine connections that are being discussed. The ‘cloud,’ according to Cochrane is, however, sufficiently scalable and might well underpin a business model for the operators.
The second area is payments. The focus and competition for this market is being dominated by start ups and ‘cool’ new entrants. Square, PayPal and newcomers like Coin are all under discussion. But the giants are emerging – some perhaps disappearing – as Bluetooth Low Energy applications become the focus, with NFC’s star fading and initiatives such as MCX gaining attention. Each one has its backers. Most of the mainstream payments providers are hedging their bets in a way that would get fund managers arrested. Partly because of the plethora of newcomers, the systems, platforms and networks at the back end are creaking badly, being patched together and upgraded – sometimes on a piecemeal basis – sometimes on a ‘big billing conversion’ basis. Stories of bank system crashes are commonplace. More common, it must be said, than telecom network crashes (although in Third World countries like the UK it is difficult to tell whether the network has crashed or not). The opportunity, for operators, is to figure out not only how to implement Direct Operator/Carrier Billing, but how to make it the most obviously compelling payment method online.
The third, of course, is customers. Both the opportunities above depend on operators understanding their customers. Whilst there are signs that operators are beginning to offer customers clear products, the fact is that these still revolve around something that is, by definition, nebulous – ‘data.’ Any one of us who has been at a meal with family and friends recently will realise the general lack of knowledge about data – not to mention the difference between whether a handset is good or bad or whether a network is good or bad. Interestingly, but not surprisingly, it is other industries that are breaking the ground with customer focused technology. Retail is leading and others are following suit. Verticals such as Healthcare and the car industry are also innovating, blurring the lines between customer experience and machine-to-machine communications. Whether some of their innovations will end up in the press for being dangerous is one issue. Another is whether operators can turn the culture of their organisations around to support what their, and their competitors’s/partners’, customers want.
And that, perhaps, is the point. Every vertical has customers that are connected. Every brand and every company selling something has connected customers.
Operators have the one thing that many of these companies do not. The billing and charging relationship. Gradually, too, the ability to analyse all that big data that rushes through operators’ systems, and offer customers what they want, when they want it, is also beginning to go mainstream. Exploit that, in the nicest possible way, and we will be fine.
Let us hope that the Board understand this simple truth. Otherwise, we may not.