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Digital challenges and responses for telecoms carriers


It's been a while since I've posted. Work is the reason for this: there is lots of it! My assumption as to why this is is that many more organisations are feeling the impact of the broad spectrum disruption that's coming down the line from increasingly established Digital Economy businesses. Great for me, troubling for my clients... 

The disruption is characterised by:
  1. Unequal competition between relatively local, focused, traditional organisations and global, digital-first conglomerates
  2. A rapid move to consumer-centricity from product-centricity as the predominant business model
  3. Uncertainty about how to achieve rapid change from a standing start or even where to begin with a programme of strategic change
I'm coming to believe that mobile telecoms carriers are likely to be the next to suffer reimagination of their industry. Open infrastructure projects, network virtualisation and over-the-top services, combined with zealous regulators suggest that is now conceivable that someone could 'SpaceX' the mobile industry. By this I mean that the cost of infrastructure and spectrum has fallen to a point where a low-billion range investment could create a national network, supported by an operation that would be radically leaner and more delightful than the existing operations of carriers, which have evolved over decades and carrier all of the legacy of that build.

We've put some thought to how carriers can defend themselves in the short term and create a platform for longer term success, based on overcoming three challenges.

Consumers now (sometimes unknowingly) expect more personalisation in their lifecycle with businesses. Mobile operators therefore need to adapt to people’s behaviour on mobile, across their customers’ lifecycle with them, rather than forcing their customers to correspond to their traditional portfolio of services and channels (e.g. through calls or in-store visits).

Increasing personalisation may entail decoupling those people and technologies that touch the customer from the back-office and network technology. This alone represents a transformational challenge.

The other challenge is how to create an environment to innovate and fail faster in order to change their business models and how consumers view them. An industry example of this is AT&T’s Emerging Devices Organization (EDO). Characterized as a ‘start up within the larger organization’, the EDO was formed to quickly identify and create new business models within the broader mobile ecosystem. 

By enabling this kind of culture of innovation, operators will be able to more effectively launch and assess new ventures as well as humanize their brand, which bodes well in this era of personalization.

Importantly, operators must embrace something they know to be true already: they must recognise and optimise their participation in the digital ecosystem. This means understanding that people are increasingly in control of their experiences on mobile and are making choices from an array of providers. Some will want simplicity; others will want to optimize for their particular preferences. To that end, it would be overly simplistic for operators to regard the emergence of OTT services as just a threat. People clearly enjoy using these services and have begun to gradually evolve their behaviors to emphasize their use. Leading operators have already taken steps to benefit from the role of OTTs by using the engaging channels they offer to deepen their relationship with consumers in all parts of the sales and service cycle.

I've written a short report on the above topic, in which I've been lucky enough to get access to behind the scenes data from Facebook and Rogers Communications on how consumers engage with carriers in the above modes. Clearly this is a large topic and the report is the tip of a very deep iceberg... but it's a start and we have more ideas coming!

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