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February 2016

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    In the highly competitive telecom markets of today, characterized by multiple operators and free flow of product related information, operators must wake up to the reality of telecom churn and devise contextual marketing strategies for retaining their “at risk” customers, using real time intelligence and predictive analysis.

    GSMA intelligence reports that the threat of telecom churn is real, with no signs of abating anytime soon. In the period between Q4 2014 and Q1 2016, ARPU dropped from $20.25 to $19.58. In Q4 2014, the number of SIM cards for every subscriber came to 1.8. Though GSMA Intelligence remains tight-lipped on the subject, they have mentioned that churn rates stood at 3.22 per cent in Q4 2014. Compounding this problem is the rise of the OTT vendors who have started eating into the revenue and profits of telecom operators all around the world.

    Any strategy to deal with this threat must have four distinctive elements: identify, design, execute, analyze.

    Identify “at risk customers”

    Operators must put in place proper mechanism for identifying “at risk customers” by using various indicators like usage, mobile switch on/off time, outbound calling, drop in activity etc. Depending upon the perceived threat level based on the aggregate score of the risk parameters given above, the operator targets customers with contextual offers.

    Design dedicated package for “reactivation”

    Once the risk has been assessed and the threat identified, the operator should try to win-back the customer with deals that are contextual and customized to the customer’s needs and wants. The retention package should be customized according to various “what if” scenarios: What if the subscriber is inactive for greater than seven days? What if the subscriber switches on the mobile only during the night? What if the subscriber only uses the mobile for SMS? For the above “what if scenarios” retention package could be designed on the following lines: “Dear customer, top up XX and get double talk time” or “Recharge XX and enjoy SMS and free browsing from 12 PM to 6Am” or “Recharge XX and enjoy 100 SMS and 10 minutes of voice calls”

    Execute “customer retention strategy”

    Operators have to be proactive with their “at risk” customers or deal with re-acquisition costs which can be as much as five times the retention cost. This means targeting customers before they have churned. Real time tracking of the customer’s activity and delivering the campaign at the right time using multiple channels can go a long way in mitigating the risks associated with customer churn. Real time marketing campaigns are more effective as they are delivered the moment the customer switches on their mobile phones.

    Analyze campaign results

    The success of any customer retention strategy depends on tracking their ROI on a continuous basis. Based on campaign results, retention packages can be customized even further, improving ROI.

    Dealing with customer churn requires strategic thinking. In the highly competitive markets of today, operators have to go beyond connecting with their customers. In order to stay competitive, they have to measure various metrics of customer activity, deliver highly personalized marketing campaigns running in a real time environment, analyze campaign results and keep improving on their marketing ROI all the time.

    By running real time marketing campaigns, the operator can bolster their revenue stream by recapturing revenue from dormant customers, reselling to existing customers, pre-empt activity drop and revenues. On the cost front, operators can save time and cost in acquiring new customers, stop campaigns with poor ROIs, and optimize their marketing dollars by running data driven marketing campaigns.

    In such a data driven environment, it is a win-win situation for the customer as well as the operator. The operator is able to reduce customer churn and the customer benefits by getting access to highly contextual offers personalized to their needs and requirements.

    February 29, 2016 0 comment
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    Within the present scenario of mobile-centric universal commerce, the merchants are increasingly making efforts to drive their global presence on multiple channels alongside delivering greater service and capability exposure to their respective businesses. One key area which witnesses both steady as well as consistently high development is hyper local commerce.

    What is hyper local commerce?

    In general terms, Hyper local refers to a very specific area, area in proximity of your home or your business or your current location. The term ‘hyper-local commerce’ arrives with the addition of payments and, marketing options available in your vicinity.

    Why is hyper local commerce making so much sense?

    Hyper local is the next frontier which is merging the online and offline platforms in order to bring massive scale demand and deliver the goods in the shortest possible time. While hyper local is being seen as the next avenue to accelerate commerce scale and quite simple to explain executing the model may prove to be an uphill task.

    The technologies supporting penetration of hyper local commerce

    Various technologies have made their way to enable hyper local commerce – ranging from the initial ones like cell-tower triangulation & GPS to the recent and popular ones such as Wi-Fi Direct, NFC and BLE.

    BLE is one of the most appropriate technologies to make hyper local commerce possible in an efficient manner. According to reports, by the year 2019, BLE beacon shipments could create a 160 million unit market. The Bluetooth SIG has predicted that more than 90 per cent Bluetooth-enabled smartphones will support two BLE by the year 2018.

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    How is BLE helping the hyper local commerce?

    BLE puts forward a strong business case by allowing the merchants to engage with the consumers at the right time. By pushing information to them, by allowing them to make more effective and informed decisions, BLE can be used to influence their purchase decisions. The retailers can use BLE to provide advertisements, coupons, offers, welcome message and product information as soon as a consumer approaches or enters the store.

    BLE is benefitting the hyper local commerce at different segments of the retail experience:

    During purchase

    • Increasing customer foot-fall through push marketing
    • Customer analytics enabling better business decision making
    • In-store offers to drive purchase decision
    • Customer assistance
    • Out-of-the-box marketing

    Payment

    • Hands-free payment

    Post Purchase

    • Driving repeat visit
    • Evoking loyalty app

    Overall, BLE’s ability to provide location-based communication can make marketing communication and shopping experience significantly more contextual.

    Conclusion

    BLE has tremendous potential. Although, the retailers have been the first to adopt the BLE technology to the maximum extent; the potential of BLE is far beyond retailing. From entertainment venues and restaurants to banking and airports, there are plethora of innovative ways in which BLE can be deployed in order to deliver over & above what the smartphone users can expect.

    February 26, 2016 0 comment
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    After years of hype surrounding NFC Mobile Payments, the contactless payments segment is finally witnessing some traction thanks mainly to cloud based technologies like HCE Payments that are enabling seamless mobile based payments.

    Traditionally, NFC payment systems use the mobile device’s secure element (SE) for storing all the data needed for completing financial transactions. This makes the owners of the SE (such as mobile network operators,OEMs) the true gatekeepers of the system who define the access as well as the charges associated with the SE.

    In this resulting payments ecosystem, which is characterized by multiple tenants and highly complex business rules and regulations, the service provider is often left with little or no control over costs and security parameters, and this, not only compromises the solution’s position in the value chain, but also  lead to poor user experience.  For example, in a typical solution, the service provider not only has to establish relationships with multiple SE owners, each with their own set of business rules and technical considerations, but also with TSM’s provisioning SEs, creating latency and undermining system’s performance as well as security.

    Queering the pitch even further for service providers (like banks) is the growing popularity of OEMs like Samsung Pay, Android Pay, LG Pay, AliPay & Apple Pay denting top-line growth (revenues) and brand visibility of the service providers all long the payment spectrum. To drive home an analogy to understand the present conundrum of the service providers, one has only to look at the telecom operators providing the bandwidth but losing out on monetization as well as branding opportunity to app providers. In the rapidly unfurling mobile payments landscape, service providers, like banks, can no longer remain just mute spectators; they must be in-step with the latest technological developments in mobile payments segment, like HCE, tokenization and hybrid-HCE payments, and leverage every monetization and branding opportunity on offer. However, service providers cannot afford to add another layer of complexity to their business that is completely unrelated to their core activities and therefore need to provision such services from a cloud environment.

    HCE abstraction Layer  

    HCE provides a layer of abstraction of the complex rules and regulations prevailing in mobile NFC SE payments, allowing service providers to concentrate more on their business rather than having to manage multiple tenants and highly complex systems. This layer of abstraction is the cloud. By moving the SE element into the cloud environment, service provider gains by reducing the cost as well as the complexity of managing such systems.

    Tokenization – Adding the Secure Element in HCE

    Since a large amount of user credentials are stored in the cloud environment, service providers have to provide an additional layer of security to their customers to prevent any misuse of their credentials. There are several ways of doing this: tokenization, single use keypad, risk analysis. Tokenization reduces the customer’s stored credentials into random numbers which are completely useless if they are stolen. Tokens can be mapped to customer’s data only by card networks and the consumer’s bank. This combined with single use keypad, risk analysis provide a strong layer of security preventing any unauthorised access to customer’s credentials.

    Trends in HCE Mobile Payments 

    After years of disillusionment, HCE has finally emerged as a viable alternative for card emulation projects independent of the physical SE element.  In February 2014, MasterCard and Visa announced their support of HCE technology. Support has come from all quarters with industry heavyweights like Google and Windows weighing in. For exampIe, in April 2014, Google announced that it is only possible to use Google Wallet to make NFC payment using HCE. Considering that Google’s Android commanded 82% of the market (of which, almost half, 48.8 % running Android v4.4 or higher) these are very big numbers indeed. Similarly, in 2015 Windows included HCE on its Windows 10 operating system. All these trends points toward to the singular fact that the confusion regarding payments is finally over.

    Future of HCE Payments

    HCE and tokenization is expected to emerge as the big game changer on the payments scene, enabling NFC devices to perform card emulations, without having to rely on their secure element. Advent of HCE and tokenization, and their variants, has simplified the deployment of NFC. Thus, based on their risk appetite, we will see mobile payment players going for different variant based on their business model. While banks will go for pure HCE, mobile operators will take hybrid HCE route with tokenization. Hybrid HCE payment integrates the easy deployment and the scalability of a cloud infrastructure with the assets of a Telco to enhance security, providing the best in both worlds.

    February 25, 2016 0 comment
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    The first blog of this series dealt with why jumping onto the mobile application development bandwagon was a good idea. To ensure that an overly rosy picture wasn’t painted, the argument was tempered with several history lessons, to reach the conclusion that monetization was the key to ensure the mobile application in question was a money spinner.

    Now let’s move on to the harder bit. Let’s talk hard numbers: how much do you think your application is worth? Remember, price it too high and nobody would buy it. Price it too low and you may not be able to cover your own margins. Essentially, the trick is to price it just right. On this note, experts are usually unanimous in their opinion that the following questions are sacrosanct while trying to determine how to price a mobile-based application: what is the offering all about? What does the application do? What is my competition offering? Why should a customer opt for my application, vis a vis my competition? And, last but certainly not the least-how is my competition pricing their applications?

    Once you have the answers to these questions in place, you’re ready to answer the most important one (and the reason this blog has been written, really), what are the best ways to monetize my mobile application? There are, of course, a thousand and one ways to achieve this, a few may work, while others may not. While I am certainly not an expert in this area, permit me to discuss a few interesting ones that may just help you hit the bull’s-eye.

    The first point I’d like to make is launching a trial version of the application. This will help whet the customers’ appetite, as well as give them an idea of the quality of the actual application. Beware, though, maintaining two versions of the same application implies a lot more blood, sweat and tears. Also, remember to have a solid up-sell plan in place before you attempt this route.

    Also consider the “freemium” or gated features route. Simply put, like the in-application advertising model, a freemium application is also free. However, certain “advanced” or “premium” features are gated and cost money to be unlocked. The customer can access the application’s basic functionality, but will be charged to access all the features. This method is basically aimed at accumulating and engaging customers until they discover the application’s value and are willing to pay to access additional in-application tools.

    While we’re on the subject of payments, let’s talk about paid applications. Now, needless to say, a customer will obviously opt for a free application, vis a vis a paid one. So, the key to making money via a paid application depends on a developer’s ability to showcase the perceived value of the same with a killer listing (which includes screenshots, five star reviews, etc.) that differentiates it from similar free applications. In other words, the most profitable paid applications do wonders in selling their application’s unique features, such as design or functionality or brand.

    Next, consider using in-application advertisements, but very cautiously. Look, there is little doubt that this is one of the most popular methods to monetize one’s application, but it has to be treated with kid gloves. Why? Well, don’t you find those advertisements that pop-up in the middle of the movie, game, music clip, etc, annoying? The trick is to know how and when to use this method. Industry experts believe that developers need to find an organic way to integrate the product with advertisements or to enhance the application itself with the same. For example, Pandora has shown how to leverage advertisements to its advantage by offering ‘sponsored’ playlists among their music service. In other words, it can be done, just figure out “how” and without annoying your customers.

    Now let’s talk about in-application purchases or things one can pay for within an application. This, again, is a tricky one. The developer has to walk a tightrope while examining what the product offers and how its services can be extended for a small financial cost in a way that is beneficial to both him and the customers. Too subtle and you lose the money game. Too brash or too ambitiously priced and no customer will buy it.

    The newest route in the market (arguably) is sponsorships or incentivized advertising. This method requires the developer to partner with advertisers who provide customers with rewards when they complete certain actions within the application. In this model, the application sees the big bucks coming in by netting a share of the revenue from redeemed rewards. In addition, it permits the developer to incorporate advertising that actually enhances the application’s ability to engage users. This model can be adapted for almost any vertical, and can be better received by customers because it is relevant and related to an application’s purpose.

    To sum up, this is by no means an exhaustive list of how an application makes money. In fact, the game is going to get tougher, with Gartner predicting that until 2018, less than 0.01 per cent of mobile applications will be considered a financial success by their developers. The bottom-line this grim forecast brings to the fore is: in the end, developers who are creative and not averse to taking risks are the ones who win the game. So, dear developers, happy monetizing and may the best application win.

    February 24, 2016 0 comment
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    Mobile payment is going through a fundamental shift driven by the evolution in social, mobile, cloud and communications. These changes are only going to intensify in the future forcing fundamental change in business processes and in turn reshaping the industry.

    In most of these cases, the change is being driven by the customer. The customer today, having experienced the always-on, always-available, contextually rich, feature sets of the mobile, wants to extend the same experience to the other facets of their life. Businesses must take cognizance of this and create highly contextual solutions that take care of the customer at the moment of their need.

    Payment is one area which provides the context as well as the opportunity for mobile to make inroads. We are at the inflection point today where the various actors in the payment landscape like merchants, consumers, industry associations, regulatory bodies have finally come around to the reality of mobile payments. Technologies like BLE, NFC & QR have finally matured to the extent where they can provide the backdrop to fast and seamless transactions experience needed across industries.

    The level of contextualization and customization which was not possible ten years ago has now become a reality across industries as diverse as banking, retail and hospitality. Here are some of the usage cases of how mobile is transforming customer experience across these industries.

    In order to compete, banks have to provide highly personalized as well as contextual services, leveraging mobile as well as data analytics. Today, banks are competing with various third parties like OEM’s, MNO’s for a slice of the customer pie. In this context, they need to put into place a mobile-first strategy or risk losing their business to new players. Also, the size of data generated by mobile based banking transactions is too valuable to be left on the table. A mobile wallet is an essential element in banks mobile first strategy helping them to provide a seamless, omnichannel banking experience to their customers.

    At the other end of the scale is personalization of offers and services leveraging technologies that provide contextuality like beacons and BLE.  Customer experience management has become an important part of the customer’s service journey right from the moment they walk in through the front door to the moment they walk out of the back door. For example, BLE technologies can detect High Net Worth (HNI) customers as they walk in through the door, fetching the customer’s data from the CRM and sending it to the relationship manager’s hand held device, and thus, creating more opportunities for providing customized services.

    Mobile based technologies like BLE, NFC, QR codes are redefining payments behavior. In order to be truly effective, mobile based payment technologies must not only offer the ease and accessibility of a physical wallet, but must also offer loyalty points to facilitate higher customer acceptance rates. Combining proximity payments with a loyalty management will create the right ecosystem that will drive customer retention, repeat business and referrals. For example, BLE recognizes a customer as he walks into a retail outlet and the check-in details are recorded in the CRM at the backend. The beacon follows the customer in the store. Once it detects that the customer is standing next to the clothes section, it sends discount coupons that are redeemable at mobile checkout. As an added incentive, the customer is also given a coupon which is saved in the wallet for the next time he visits the outlet.

    Retail outlets can also use NFC Mobile payments for queue busting which is especially relevant for low-value, high-volume micropayments transactions less than $1 in value.

    Current cash based micro-transactions have two problems –

    • Merchants experience the “change problem” – not enough free change for processing small transactions that are generally below $1 value.
    • Customers would rather put off purchases than carry change

    NFC mobile based payment digitizes the entire purchase procedure making it easier for the merchant as well as the buyer. Besides smoothening payments in micro-transactions, solutions like these have the potential to spur purchases, leading to benefits all around.

    Proximity Payments using QR code digitizes the customer’s purchase journey right from billing to payment, creating a seamless in-App payments experience. For initiating the billing transaction, the merchant scans the purchased goods to get the bill amount. In the next step, the merchant enters the bill amount in the app to generate the QR code, which contains the billing as well as the merchant information. To initiate payment, the customer scans the QR code with his smart-phone and enters the pin in her wallet app after verifying the bill. The transaction is completed once the customer receives the transaction confirmation in his app.

    With technologies like NFC, BLE, QR code moving towards the maturity phase, following years of scrutiny, the next few years is expected to witness higher uptake, with businesses striving to differentiate themselves in hypercompetitive markets. In the end, it is all about improving customer engagement, leveraging technologies that deliver contextually rich engagement experiences, because the more the businesses engage with their customers the more things become clearer and the more it is easy for them.

    February 22, 2016 0 comment
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    How does a brand make its voice heard? Is it the promise of quality, value for money or convenience? Or is it simply promises of better services coupled with a proactive approach? It’s a bit of both. The catch, though, is that the information has to mean something to the audience. At the end of the day, it boils down to promoting that set of attributes this set of individuals either can or want to identify with.

    It’s no different for us. When I say, “Mahindra Comviva”, what would you think of? Would “trustworthy” and “innovative” apply? How about “ready for tomorrow”? And herein lays the crux-why we chose to set ourselves apart from the clutter with a simple yet powerful vision-The Business of Tomorrows. The message is-this is how we view the possibilities before us. The opportunities. How we’re readying ourselves for multiple versions of what tomorrow may bring. How we’re creating new solutions for unknown markets, impacting lives in familiar ones, delivering business efficiencies, even catering to Generation Next. How we see subscribers evolving, businesses changing and new gaps and needs emerging.

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    This is what drives us to stay one step ahead of competition. What we’re bringing to the table is this-making mobile payments easier, entertainment better and internet and broadband solutions faster. Of equal importance are enhancing, overall experience through customer value management, accelerating top-line growth with robust messaging solutions and enhancing end-to-end managed services. Clearly, the rules of the branding game have changed. We’re ready, though. Ready to leverage the opportunities tomorrow’s requirements will bring forth.

    We are all about the Business of Tomorrows.

    February 19, 2016 0 comment
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    Without a doubt, the rapid growth of the global telecommunications space seems perfect on paper. Sample this-according to data released by GSMA Intelligence, the total number of mobile connections (including Machine-To-Machine) worldwide stood at 7,747,629,404 (and counting!) while the number of unique mobile subscribers stood at 3,819,504,999 (still counting), both as of the first quarter of 2016. Meanwhile, revenue per year (for financial year 2014) stood at a staggering $1.06 trillion, a 1.99 per cent year-on-year growth.

    That, in a nutshell, represents the overall (extremely rosy) picture. Now, let’s examine a few parameters more closely, beginning with a trend that has somewhat recently reared its head and thrown the old order into a tizzy. I allude, of course, to the number of SIM cards per unique subscriber, which has been growing steadily every quarter. Again, as per GSMA Intelligence, in the fourth quarter of 2014, each unique subscriber across the world had 1.80 SIM cards. This number fell to 1.79 from the first to the fourth quarter of 2015, to reach 1.80 once again in the first quarter of 2016. Going forward, the firm has predicted that this number will remain steady, at least until the second quarter of this year. Thereafter, it is expected to rise to 1.81 in the third quarter of this year, where it will remain until the fourth quarter of 2017. (Actually, it is expected to remain at this number beyond this period as well but that would mean going well-beyond this blog’s frame of reference. So, let’s put it on the back burner for the present).

    Next up, let’s look at the minutes of use (MoU) per connection worldwide. Now, this parameter has showed an interesting, if somewhat skewed trend. In the fourth quarter of 2014, it stood at 287 and then marginally dropped to 286 in the first quarter of 2015. It then spiked to 292 in the second quarter of 2015. Likewise, the average revenue per user (ARPU) per subscriber displayed similar attributes. It stood at $20.25 in the fourth quarter of 2014 and then continued to marginally decline. In the first quarter of 2015, it fell to $19.76, rose somewhat to $19.95 in the second quarter of 2015 and then reached $19.98 in the third quarter. Then came the fall-specifically to $19.82 in the fourth quarter of 2015 to $19.58 in the first quarter of 2016. And finally, perhaps an operator’s biggest nightmare-churn rates. Though GSMA Intelligence remains relatively tight-lipped on the subject, they have mentioned that churn rates stood at 3.22 per cent in the fourth quarter of 2014. After that, well, it’s anybody’s guess, really, but I reckon the number would be roughly in the same range, give or take.

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    Now to throw a spanner into the works. The idea of bombarding you with data wasn’t to provide a ready reckoner of the inside workings of the global telecom sector (though that never hurts!) It was merely done to point out that the telecom space is a bit of a paradox, really. Why I stated that the sector is performing well on paper is that while there is little doubt that operators are raking it in, let’s not ignore the fact that parameters like SIM usage, ARPU, MoU and churn rates have a different (and perhaps less pleasant) story to tell.

    The very existence of the multiple SIM card trend, for instance, is testimony to this. If we examine the trend at the grass-root level, it boils down to this-industry experts agree that the prime motivation for using multiple SIM cards is to take advantage of inherent price differentials across competing operators in domestic cellular and roaming scenarios. Breaking this theory down further, needless to say, this is most prevalent in emerging markets, where customers are typically more price sensitive. So, obviously, the most lucrative opportunities for price arbitrage are because of on-net and off-net pricing.

    The bottomline is this: operators, please sit up and take notice, a customer may be registered on your network but may not be using your services at all! In other words, you may have the number to boast of but the fact is that a part of your revenue is being “leaked” onto your rival’s network, by virtue of the customer using multiple SIM cards!

    What’s an operator to do in this situation? Well, one way to go is to pull out the big guns to maximize the share of spend across a single individual’s multiple cellular accounts. This approach will serve to plug any revenue leaks. The inherent problem with this approach, though, is that price no longer holds the pride of place with which competition can be kept at bay. Well, to a fair extent, at least. This brings us to the other (and, in my opinion, the far more interesting way) to hold onto the customer.

    Operators, a viable way to keep customers hooked onto your network is to build the right value propositions to mitigate the practice of holding multiple SIM cards. How? By focusing on providing a fair mix of the all-important elements of quality of experience and services, coupled with the services bouquet itself.

    Easier said than done, of course. Which brings us to the crux of the piece-what role can customer experience management (CXM) play to help? Well, first things first-telecom operators, please move away from offering limited products and services through limited channels. The first rule of understanding what CXM can do for your business is developing more sophisticated and personalized offerings, which ought to be delivered and serviced through multiple channels. This will help assure the customer your brand is omnipresent and is willing to lend an ear to what they have to say.

    Next, let’s dwell on the importance of a multi-channel CXM strategy. The keywords to focus on are these-consistency and ease of interaction. There is (and as customers ourselves, I am sure you will agree) nothing more frustrating than having to having to wait for minutes (yes, really) to contact a customer care representative, or having to contact the same company for the same query over and over again. You just lost a viable customer, dear operators! Not all is lost, though; just ensure you’re listening to your customer very carefully. Once you get a sense of what they need, it’ll be easier to anticipate their demands the next time around. Now THAT is CXM at its best!

    Of course, it doesn’t end there. Besides the assurance that your brand is “always-on”, the availability of real-time services is a brand’s trump card. Today’s customer expects, no, demands, a brand to deliver convenient and immediate services. And, naturally, this brings us to the importance of self-service. Simply put- enable your customers to carry out transactions like purchase additional data, pay bills, update contact details, or their plans or handsets-immediately of course-and enjoy the benefits of having implemented a win-win proposition-i.e.-customer stickiness, reduced cost and churn, increased sales and reduced usage of call centres.

    To sum up, this is by no means an exhaustive list of the best ways to leverage CXM. Indeed, it isn’t even the tip of the iceberg. Though, while we’re on this note, may I please add that by all means, go ahead and leverage CXM the way best suited to your business requirements. Don’t forget, though, pointers like those given in this blog are mere theory-you will need a long-term strategy that is clearly defined and well-researched. Add to that a focus on the customer’s journey (in an end-to-end manner, of course) and you’re good to go!

    February 17, 2016 0 comment
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    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.

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    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.

     image005 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

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    • 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.

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    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.

    February 10, 2016 0 comment
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