2015 promised digital innovation, 2016 will deliver

The last year has seen a number of telcos in the Western World undertake some form of digital transformation. During this transition period, many Communications Service Providers (CSPs) have come to a common conclusion: a complete digital transformation is simply too difficult for many to achieve.

Unfortunately, investing in upgrading outdated legacy infrastructure does not deliver the agility and cost benefits needed to compete against new digital brands and MVNOs, which are continually emerging.

As a result, next year will see telcos ditching multi-year, complex – and costly – digital transformation projects in favour of fast-track digital programs, standing up light-weight digital ecosystems and IT stacks outside of their existing IT environment.

Digital & the emerging market

Telcos in the Western World have been busy tailoring the post-paid experience for data hungry subscribers, however, the majority of the World’s mobile subscribers are pre-paid. As such, they are yet to experience the full range of digital services smartphones now offer. Pre-paid customers have a tendency to focus their data usage on free Wi-Fi, and are reluctant users of mobile cellular data services. This will all change in 2016 as CSPs bring low cost smartphones and a full digital experience to the pre-paid market.

By going digital, CSPs will be empowered to tempt users with trial promotions, sponsored content, shared data, and other low cost packages that can be purchased instantly through the handset. By selling data in small increments directly through the handset (instead of requiring a voucher or IVR interaction) CSPs will be able to offer more affordable 3G and 4G options to drive uptake and higher ARPU.

Paying now for smarter data packaging

Next year, CSPs in the more established telecoms markets will be looking to give payment models a shakeup. While post-paid and pre-paid are currently recognised as the dominant payment models, next year will see CSPs deploying a third option which does not fall into these buckets. The subscription market has peaked and we are moving into a consumption based economy, which will drive the advent of ‘pay now’. In this model, users will sign up with their credit card details, and when they buy something, they will pay for it instantly. There will be no dealing with messy credit checks, rollovers, vouchers, or invoices. If a subscriber runs out of a service, the pay now model will let them buy more, be charged for it instantly and be done with it – similar to the way you order a film on Amazon.

In this ‘pay now’ model, CSPs will also move away from selling large amounts of data, to selling customisable plans that are presented in a package other than in chunks of GBs. For example, a package might offer a consumer 4 hours of Facebook browsing combined with 2 hours of Instagram browsing, making it easier for the consumer to understand where their data is being spent. It could be ‘digital dim sum’ or ‘mobile mezze’ – the repackaging of mobile services into smaller, bite-sized portions will take on various flavours and forms. In doing this, CSPs will be able to experiment with finding the right mix of customer preference and margin to make their offerings more consumable while maintaining profitability.

The last few years have seen the move to digital transforming the strategies of other industries such as marketing and retail. 2016 is the year the telecoms industry finally catches up. CSPs will gradually completely break free from the shackles of outdated legacy infrastructure, in favour of agile, fast-track digital programs. These digital systems will be deployable in 6 months or less, deliver ROI in the financial year of launch, and will provide an upgraded experience which in some cases will sit under a new digital brand. 2016: watch out as CSPs launch digital brands in an agile, cost-effective way, delivering new innovations that will shake up the subscriber experience.

Jennifer Kyriakakis, Co-founder, MATRIXX Software

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