Telco transformation becomes a reality in 2018

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Digital transformation, particularly in the telco market, has the unique distinction of being both a marathon and a sprint. Winning is about the ability to be agile, consistent and on demand. As we head into 2018 it’s time to starting thinking about what the next year will bring. Here’s what we can expect to see.   

1. The Year Of “Peak Unlimited” Data   

In 2017 the rush to offer greater value with unlimited plans may have seemed beneficial for consumers, but the reality is that it resulted in unsustainable pressure on earnings for major carriers. Over the next 12 months we will see the “Peak Oil” of these data plans which, in turn, will force operators to differentiate themselves and look for the ‘new, new thing’ that will attract and retain customers.   

A recent survey showed 73 percent of consumers wish their mobile service provider operated more like their Amazon, Netflix or PayPal account. This highlights an opportunity for new players in the MNO space - such as OTTs and digital upstarts  - who can offer greater insight into data use, exclusive content and personalized offerings. To keep up in the digital transformation race operators need to make bold moves to radically reinvent themselves – embracing differentiation around customer experience, content, flexibility and customized services. 

We’re already starting to see this trend  come to fruition. Cable provider Comcast, for example, recently introduced XFINITY Mobile – offering both unlimited and flexible pay-per-gigabyte plans. This plan is proving more popular with customers as  it allows them to pay $12 per GB for the data they use each month, and adjust as needed, rather than shelling out the $65 per line for the unlimited plan.   

2. The Rise of Mesh Networks      

2017 has seen destructive hurricanes and earthquakes across the globe, not to mention devastating wildfires across the state of California. During these tragedies, communities were cut off from relief and rescue efforts that depend on having reliable communication networks.     Similar situations exist every day within the poorest communities across the globe, as over 4 billion people still do not have internet access, yet 96% of the world’s population lives within a 2G network.  Implementation of mesh networks could save lives by connecting those at the bottom of the pyramid.

Facebook Drones and Google Balloons have the capability to provide both long-term internet access solutions for impoverished communities, as well as connectivity options following disasters. The technology required has been around for years; however, the need for emergency back-up, ad-hoc communication networks puts mesh networks back at the forefront. Throughout the next year we’ll see the success of these emergency use cases drive the monetization of mesh networks.   

3. A Mobile Year For Amazon   

Amazon’s strategy is clear: empower consumers to stay in its ecosystem. Why? To improve their big data collection so that they can better target consumers and essentially sell more. 

By Increasing transaction volume over mobile and taking advantage of big data opportunities, it’s no doubt that the tech giant will yield unprecedented success. In 2018 Amazon will make a move to disrupt the mobile market. It already touches almost every sector from fast-moving consumer goods, retail, health and more. And, 73% of consumers (UK and US) would buy mobile services from digital-first brands such as Amazon.   

With the right strategies in place, Amazon could become the aggregator of a consumer’s digital spend by offering personalization and spend management features all in one place. The truth is those traditional players that fail to innovate will fail. 

4. Gaming Goldmine For Telcos   

Gaming is big business. The perfect combination of augmented reality (AR), growth in mobile gaming, expanding popularity of esports and an insatiable hunger for new content makes the gaming industry the next goldmine for telcos corporations. The average gamer, for instance, spends 6.5+ hours per week playing. Add in the potential for new AR experiences that will come into the market, and the time spent ‘in-app’ will only increase. 

Beyond loyalty, telcos will be attracted to gaming by its revenue potential. The games business generates in excess of $100 billion. As the popularity of games grows, so does their potential for new revenue with mobile gaming, alone, expected to grow to almost $52 billion by 2019. Just as with deals for film and tv libraries, telcos will see the revenue potential made possible through deals and/or outright ownership of game developers and publishers.

Whether through game license fees themselves, or the data required to supply those game experiences, there is big opportunity and telcos are primed to take advantage of it. 

5.  Telcos and IoT: The Billion Dollar Opportunity   

Throughout 2017, we’ve seen the introduction of differentiated value added IoT services that change the economics of traditional industries such as energy, healthcare, waste management and agriculture.  As AI and real-time decision-making capabilities enhance retail, manufacturing and other various high-value producing industries, we will see a marked inflection on the uptake of IoT deployments and related services offered by CSPs. However, 2018 will be the year IoT demand and supply converge into big dollars for telcos.

According to a recent enterprise IoT survey by a leading research firm, patterns are emerging in vendor selection as enterprises navigate the complex landscape for IoT deployments.  Enterprises consistently rank telcos as their vendor of choice for engagement on IoT deployments. Globally, enterprises consistently rank CSPs 1 or 2, beating the likes of Cisco, IBM and Microsoft.    

The importance of wireless connectivity, access to global networks and data storage, along with a track record of processing billions of transactions daily, give telcos a leg up on the competition for selling IoT services.  The combination of these native capabilities, coupled with the vertical expertise built through recent acquisitions telcos have made and the gaining of acceptance of X-as-a Service business models, creates unique and lucrative propositions that only leading telcos can offer to enterprises looking to digitize legacy industries.     

Jennifer Kyriakakis, Founder of MATRIXX Software 

Image Credit: Toria / Shutterstock