A Telco Paradox: Declining Revenues, but More Demand than Ever

At Management World 2013 in Nice, France, Keith Willets, the chairman of TM Forum, highlighted something that’s on the mind of every communications service provider (CSP): declining revenues. A lot of this decline isn’t from competition and certainly isn’t from a lack of demand, either. It’s from the radical changes in mobile usage habits around the world.

The drastic decline in SMS, amounting to about $30 billion in lost revenue last year, is one example that Willets mentioned. The text message is swiftly being replaced by IP-driven services like iMessage, leaving no room for CSPs to build new opportunities in the same space. Instead, as Willets explained, they need to look elsewhere.

The Customer Conundrum

Amid the panicking about changing consumer habits, there’s something even more important that’s fallen to the wayside: the consumers themselves. The telecommunications industry has six billion customers around the world, and Willets reminded everyone at Management World 2013 that telco is ranked in the lowest quartile for customer experience.

Changing the way CSPs interact with customers was part of Willets’s survival kit for this “digital storm.” He listed data analytics, real-time offers and bundles as being critical for operators to build a sustainable business and better relationships with customers.

Willets’ point was simple: if CSPs treat their customers well, they’ll be more tolerant and forgiving. In a world where CSPs are scrambling to create new revenue streams, the customer has to stay top-of-mind.

Overcoming the Paradox with Personalisation

What I heard from Willets’s speech was everything that Comptel has been working on. With traditional sources of revenue declining steeply, CSPs have to recalibrate by focusing on personal, customised offers that serve to engage, delight and sell to customers at the same time.

Predictive analytics should be at the core of this approach. If CSPs can use big data to hone in on customers’ behaviours and needs—and automatically and proactively leverage that knowledge for new business opportunities—then this era of sweeping change across the telco industry will clearly be change for the better.