Nokia Siemens Networks

Will the credit crunch reveal the true value of subscriber data?

2009 has so far been a tough year for communications service providers (CSPs), but they can steer a market-beating course through these troubled times by using subscriber data more effectively.

Centralized subscriber data management (SDM) can play a key role in controlling costs. Better still, it can help operators get more from their existing assets by maximizing revenues and minimizing churn.

Although highly resilient, the communications industry is not immune from the global slowdown. For example, many CSPs are feeling the pinch as people travel less and roaming revenues decline. In emerging markets, too, everyone is more cautious about spending, and shaving a few dollars off the communication budget is an obvious way to save money. Adding the longer-term challenge of increasing market saturation into the mix, many CSPs are bracing themselves for a substantial slowdown in growth.

Mobile data defies gravity

Still, there is still some good news, especially when it comes to mobile data. Driven largely by flat-rate pricing, the increasing consumer appetite for mobile data services shows little sign of flagging.

Despite the global downturn, growth figures are still robust. The quarter-on-quarter growth rate of global mobile broadband subscriptions showed only a moderate decline between the third and fourth quarters of 2008, dropping from 21.8% to a still-energetic 17.5%. In fact, Nokia Siemens Networks forecasts an 800% rise in the volume of data transmitted via mobile networks over the next four years. CSPs today offer a “one size fits all” experience, but that needs to change if they want to make the most of this opportunity. Providers need to use the information already provided by their customers to deliver a more exciting, individual experience, which is relevant to each subscriber’s location, persona, preferences and market segment.

Many CSPs already possess terabytes of customer data, though most of it cannot be used to analyze behavior effectively because it is held in fragmented databases and on legacy data management platforms. A recent survey of senior industry managers by Nokia Siemens Networks showed that over half of the respondents cannot analyze customer behavior using their existing customer data infrastructure, while almost as many complained that data is not being analyzed fast enough.

Subscriber data to the rescue

There are four ways that better management of subscriber data can help CSPs through the economic downturn.

1) With consumers now looking for the best value for money, CSPs can use the subscriber data and insights to reduce churn by targeting people with the most relevant bundles and tariff plans based on their usage patterns and willingness to pay; service quality where required; and efficient and flexible customer care options based on real time subscriber data.

2) Many high-value consumers will not alter their usage behavior because of the downturn. But accurate information can help CSPs target future offering and service bundles more effectively to maximize their customer lifetime value (CLTV) and generate more revenue over time;

3) With proper consent subscriber data can be provided to third parties (advertisers, application developers and media companies), thus creating new revenue streams for the CSPs;

4) Controlling costs: subscriber data systems have typically developed piecemeal, with data held across a range of applications. By bringing subscriber data into one database, information can be interrogated in real time through open interfaces thus reducing the time and costs associated with data consistency and analysis.

Additional new revenue from identity management

According to Nokia Siemens Networks research, CSPs rate identity management as one of the most important aspects of SDM, second only to customer profiling.

Identity management controls the provisioning, sign-on, linking, and federation of subscriber identity data to Internet services. CSPs can use it to position themselves as a trusted identity provider in a world where the boundaries between the Web and the network are increasingly blurred. With many subscribers continuing to access Web 2.0 applications via PCs over fixed lines, this is one area that can benefit fixed-line providers as much as mobile CSPs.

For subscribers, identity management means an end to the ever-growing numbers of passwords and log-ins, since they can be identified by their mobile device or IP address. With the CSPs acting as a gateway to online services, all their online activities can be authenticated by a single device certificate or password.

Revenue-generating opportunities include “legal age” and nationality authentication for controlled services such as gambling, accessing adult content or alcohol consumption. Legal age verification costs some Web 2.0 service providers in the order of USD 22 for each customer. Identity management enables the CSPs to provide this service.

CSPs can also provide anonymous customer profile information very competitively to third parties looking for marketing insight or verification for government compliance requirements.

More than a carrier

As the communications industry evolves, any CSP looking to be more than a simple bit pipe provider will rely increasingly on subscriber data management. Sharing customer data intelligently will also enable them to establish a co-operative two-sided business model with a range of partners. Web 2.0 partner services can be brought into the CSP’s “trusted circle” more quickly and at lower cost.

The economic storm won’t last forever. When the dust settles the most successful companies will be those who have focused their businesses most strongly on meeting the needs of individual end users, both within their own activities and those of their Web 2.0 partners. Such customer-centric thinking demands that they make the best possible use of subscriber data.

* Forrester European Mobile Forecast 2008 to 2013