Today’s telecom operators face a bit of a paradox. On one hand, technology is evolving at a break-neck speed. On the other, competition has never been more cut-throat nor average revenue per user and profit margins so thin. To add to the chaos, Over-The-Top (OTT) players have stolen the show from under the operators’ very noses. In a nutshell, operators are cornered from all sides. To substantiate this argument, let’s take a quick look at the challenges an operator has to contend with today.
What ails today’s telecom operator
The rise and rise of OTT players: The evolution of OTT players has created tremendous potential to manage businesses differently. Keeping this in mind, the operator community will do well to treat this as an opportunity and expand their business to include the new streams opened up by OTT players. OTT players can attribute their sudden rise to the explosion of smartphones and OS application ecosystems in developed markets. Now, these players didn’t make their presence felt overnight. It was a slow and gradual process but one that has “tipped”, that is, reached seriously competitive levels in various markets. So much so that an operator’s SMS volumes and revenues have come under fire. A quick side-note-Ovum estimates that by 2018, operators are likely to face revenue losses to the tune of $7 billion owing to the availability of OTT-based alternatives!
So, what’s an operator to do? Well, one approach is to launch similar products to counter the challenge. There is a catch though-operators typically have a limited sized team for such services. This, naturally, limits the creativity and innovation required to make the product successful.
The changing face of value added services (VAS): Over time, VAS has undergone a sea change. Traditional voice-based services are giving way to new age digital services. Now, the dynamics have changed once again. Though data still rules the roost, the emphasis is no longer on pure entertainment or music-based VAS.
To stay relevant, operators will have to focus on non-traditional services like Machine-To-Machine (M2M), media/entertainment, health and cloud computing. This will have to be carried out in collaboration with digital servicescompanies and strategic alliances with diverse industries. The idea will be to capitalize on the existing customer base by offering them a variety of services. These may include (but not be limited to) mobile banking solutions, emergency management and response systems, medication reminder services, cloud-based campus solutions, digital classrooms, contextual commerce, geo-fencing, predictive offerings, etc. the list is endless.
The shift from “wisdom of the crowd” to personalized offerings:
Permit me to state this upfront-a “one size fits all” approach no longer works in the telecom space. Here’s why-today’s customer knows what they want and are looking to engage with brands that offer a personalized experience across multiple channels. The trick today for any operator is to be omnipresent and deliver more accurate and relevant information, both on-and-offline.
Moving from a single-to-a-multiple screen world:
The age of digitization is upon us. The challenge before telecom operators today, therefore, is keeping their pipes smart through content aggregation partnerships. That is, while harnessing OTT and multiple-screens to give their business a shot in the arm.
In a nutshell, customers are demanding on-demand and personalized content anytime, anywhere and on any screen. Operators, please note, the crux of your strategy ought to be shifting from “mass” media to “my media”!
Operating in a complex ecosystem
Today’s telecom industry is, to put it mildly, very complex. These players need to contend with several variable factors, which may or may not impact their KPIs and IPs. This is just the tip of the iceberg-let’s not forget that keeping pace with the fast changing global trends is a priority for all players-and by no means a mean task! In addition, the current content industry is very scattered and disorganized. Operators have to deal with multiple content providers for powering content on their VAS products. In doing so, operators have found themselves exposed to legal hassles around content copyrights, and operational challenges associated with having to deal with multiple partners.
How VAS Business Aggregation can help boost bottomlines
Here’s where VAS Business Aggregation (VBA) steps in. At the outset, permit me to state that I am by no means claiming this to be a panacea for the aforementioned challenges. The idea is to suggest and present it as a viable means to mitigate the same.
Now, let’s address a fundamental question-why should operators consider VBA at all? To answer that question, consider the following:
- VBA players bring to the table a clear understanding of the global market. This can only help strengthen an operator’s business case by keeping abreast of and tackling any challenge that may arise!
- VBA players help operators improve and enhance overall revenues.
- These players help operators streamline their business and reach their customers anytime and anywhere. This, after all, is what can make or break an operator’s business!
- Operators will be able to understand their customers better through actionable insights. This will mean that operators can create a particular profile for their customers and subsequently, fine-tune their products to cater to the same.
- VBA players are able to simplify the overall telecom ecosystem. This is achieved through the creation of an end-to-end service ecosystem, which includes services procurement, programming and discovery, usage reports and analysis and of course, overall services operations management.
- VBA players help operators manage the complex ecosystem of OTT players and multiple content partners. This is while ensuring IPR protection and increasing an operator’s business pie.
- In addition, VBA players offer the ability to collaborate with partners, not only from the traditional content industry but also from other industries like tourism, education, healthcare, etc. These are very critical in future success and therefore, it is important to enable different industries to harness the full potential of the mobile to eventuallyoffer consumer-oriented solutions.
I’d like to conclude by saying that things aren’t going to get any easier in the global telecom space. Operators should remember this and figure out (or revamp) their strategies. VBA players may just do the trick. In a nutshell, operators have started seeing it as an important shift in running their business and have started working with partners to overcome anticipated challenges.