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Are operators limiting their own growth?
New research suggests operators can do even more, better, faster.
Most operators’ existing subscriber data management platforms can do a better job leveraging customer insights to help rollout new services, according to a new study.
While customer insight influences operators’ growth and investment strategy, existing subscriber data management systems simply do not give them enough information for analyzing customer behavior, according to the research. A survey conducted by Loudhouse research, a UK-based independent research company, on behalf of Nokia Siemens Networks, included interviews with 100 senior executives working across a spectrum of mobile operators and ISP/mobile internet portals.
Unlocking the potential of subscriber data
Over half of the respondents (53%) stated that existing customer data infrastructure doesn’t enable analysis of customer behavior while almost as many (46%) complain that data is not being analyzed quickly enough. In addition, only 14% of the respondents have visibility of customer churn rates on a real time basis. With 87% of the respondents looking to improve customer insights over the next year, an improvement in the organization and availability is essential because, although many operators are sitting on terabytes of valuable customer data, the majority of it is rendered ineffective by fragmented databases and legacy data management platforms.
Though mobile data revenues from next generation services may still be small, the market is growing fast. Indeed, Nokia Siemens Networks research forecasts that the amount of mobile data transmitted over mobile networks will increase a staggering 800%, to 13.5 million terabytes, over the next four years.
The growing pace and enthusiasm for mobile data is driving the need to increase the speed of creating and delivering mobile applications. While the average time to market for deploying a mobile application has improved from 10 months last year to 7 months this year, the more telling statistic revealed by the study is the desire of communications service providers (CSPs) to reduce this even further to 2.6 months. The recognition that application development and delivery must be quicker highlights the importance of the mobile Internet and the reason why operators and mobile Internet businesses in the survey are keen to improve existing customer insight measures.
A closer look at the drivers for insight improvements shows that the main concern for internet portals is that detailed user data is not available (50%), while for mobile operators it is the fragmentation of data, speed of analysis and complexity that are the major pain points.
Another difference between mobile portals and mobile operators is their approach to data brokerage. Due to confidentiality requirements and longer-term customer relationships, only 4% of mobile operators are currently motivating end-users to allow their data to be shared with third party businesses. The comparable figure for mobile portals was 27%, highlighting their greater success in convincing customers to allow personal data sharing.
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Are operators limiting their own growth?
I have a much simpler answer to the issue (its not really a problem just an issue) of limiting growth. The answer is that in the mobile world, and to smaller extent the fixed telecommunications sector, the operators strength - which is where most of the money is spend - is in the infrastructure. It takes a lot of energy to roll out and manage this network infrastructure. This takes most of the energy and attention by managers, executives, and the board. thus the type of organisation and culture needed to nurture and and develop the type of creative solutions for mobile services is different from the solutions needed to manage the network. Its somewhat like the David and Goliath scenario. They just don't fit together. Indeed when you are talking to a CTO who works in millions of dollars per month in Capex and OPEX its difficult for him to concentrate on something outside his realm of experience that costs 200k especially if he gets it wrong and its going to end up 10 million over budget. Again who does the CEO listen to 20 million or 20k? Also its the same picture at the suppliers and vendors. A CMS (Content Management System) that costs 200k does not fit into the Sales directors "punch" list. In fact they might just fit into a sale as a "throw away". And guess what gets forgotten about or pushed to the back of a pile of things to do when the times are hard? Yes its the 40 base stations! Get real. Thats why companies like Google, and in there time Microsoft, Marconi, Nortel, Lucent have to come and go as the business models change. Most companies once they get large cannot really change with the times. They have to go into surivival mode and hopefully the money and the machine can slowly change - in the same way that IBM has changed and survived (OK they are still making a lot of money but you can hardly say that they have changed the world in the same way they originally did). As Charles Handy alluded to and Peter Drucker had outlined. Once a successful company gets above a certain size (that difficult to judge but I would argue 5000 employees if they are successful) its very difficult to create the creative environment to rapidly change with the times. They are good at what they do and will make sure that they get the last ounce of cash from the original business model before changing it too radically.
Stated above is a desire to reduce the development life cycle from 10 months to 7 months. Thats hard when a budget is set every year. Now if a budget is set every month as a small content provider does then its easier to reduce the 10 months to 3 or 4 months development cycle. They have less people, processes and politics in the way to achieve this. In fact its a very strong driver for them to achieve this.