Telecom Operators worldwide are facing increasing heat due to gradual erosion in their core infrastructure revenues. P2P Messaging is going down affected by OTT traffic. Net Neutrality concerns are affecting service differentiation and segmented monetization. As the world moves towards all IP for every mobile service, Operators need to quickly turn around a corner and find newer ways to monetize their data infrastructure and be ahead of the game Operators form the backbone of the mobile economy and have the highest contribution to the mobile ecosystem. The Mobile ecosystem revenue is forecasted to grow to nearly $3 Trillion by 2020, as per GSMA.
At the same time, the share of the operators in the pie is reducing. Think about this – Telecom Operators have invested zillions of dollars in setting up the infrastructure that is enabling us to communicate the way we want today, anytime, anywhere. The digital transformation of the industry has caught out the operators, and they are finding it increasing difficult to sustain their revenues and grow. Voice revenues are on the decline, P2P messaging traffic decline is faster, owing to the proliferation of OTT services. Traditional core-infrastructure services cannot sustain them for long. Everything is going to IP, everything is data. The big question in front of operators today is how to effectively monetize data traffic.
|Gartner predicts that by 2018, worldwide mobile data traffic will increase 3x from its current levels|
However the operator data revenues are not increasing by a similar proportion. Ability to monetize that insatiable appetite for more data holds the key to their long term success
Mobile Data Revenue eco-system
|Broadly, the mobile eco-system is enabled by three main drivers – Consumers, Advertisers and Enterprises|
- Consumers / Subscribers
Depending on the general consumer consumption pattern, the global consumer / subscriber market for data can be broadly classified into Pioneers, Mature and Followers segments.
Operators need to evolve differentiated strategies to individually address these segments. These could range from offering higher data volume limits in data-hungry markets, competitive pricing, pay-per-use models for driving data usage, to even data VAS like data sharing options for friends / families for common apps.
- Content Suppliers / Advertisers
Advertisers provide the means for businesses to reach their customers. Their main value comes from being able to offer a higher conversion rate through better targeting.
The captive customer base of subscribers is a huge asset that operators have to make use of. Usage patterns, location information, demographics, interests and what not; all are key data that the services out there are dying to get hold of for driving custom intelligence and targeted sales.
The $500Bn Content / Advertising market is desperate to get these insights that will help them generate higher conversion rates, with more contextual and targeted advertising. Operators are also in the best position to keep the data anonymous given their long-term experience in dealing with user privacy concerns.
- Enterprise / Sponsored Data
Enterprises are the businesses that want to get connected with their customers anytime anywhere. They are looking for newer channels for engagement for retaining customers, promoting new services and improving service quality.
The big opportunity that is today untapped to a fairly large extent is Data Sponsorship. It has been making the rounds for a while now, but net neutrality debates have curtailed its success. A top Tier 1 operator in North America introduced a service named Sponsored Data in 2014, where customers can browse, stream and enjoy content from data sponsors without impacting their monthly data plan allowance. Some limited use-cases are possible with zero-rating, but still there is the search for those killer use-cases, that can help realize the true potential of this business.
This requires a paradigm shift in how operators are thinking about data. There is need for operators to start to treat data as something that could be used for trade. Enable enterprises to use data as a means to incentivize, reward and promote services towards subscribers. Enterprises are looking at ways that go beyond just offering discounts or distributing gift coupons. What if operators created the environment for enterprises to use data flexibly as part of their marketing campaigns and customer retention schemes? What if an enterprise could deploy data-led loyalty programs? What if they could manage real-time campaigns that use a mix of customer / network intelligence that the operator brings in, and incentives based on data packs? The growing use of smartphones and launch of an ocean of apps and services for the consumers has put a premium on the data pipe of operators. Operators should look to take advantage of this by making it convenient for businesses to connect with their customers using data as an engagement channel.
Data monetization is critical for the long-term success of operators in this age of digital transformation. It is quite probable,in the very near future that data might just become a newform of currency, with a healthy contribution to the mobile economy.