Exploring the Telecom Metamorphosis

by Jeff Wiener on June 12, 2015

Of late many have compared the evolution of telcos from traditional network providers to actual digital service providers as more than a rebirth of an industry, but as an outright metamorphosis; the slow caterpillar (traditional telcos) breaking forth from the chrysalis, now changed into a dynamic butterfly (digital service provider). But the unfortunate thing is that outside that chrysalis predators–in the form of powerful tech companies–are already lurking, meaning the attempted transformation of the telecom industry, should it even succeed, may indeed be short-lived.

As Disruptive Views guest blogger Katie Matthews writes, telecom operators “are striving to become digitally mature, leveraging the infrastructure and data that has been building for years to make new and emerging digital services. Meanwhile, the large Internet players – the Googles, Facebooks, Alibabas, etc – continue to flex their muscles, and strengthen their already-powerful position in the digital ecosystem.”

The problem, as I noted last week, is that telcos are having difficulty finding what now sets them apart from their competition in the digital space. As Matthews writes, the emerging butterfly now finds itself surrounded by spider webs…and “the webs are multiplying.”

To understand the precarious position of traditional telcos one needs to look no further than Google’s emergence as a wireless operator, as the company’s Project Fi is a significant encroachment on traditional telecom territory. While operators have long been used to monopolizing network access, Google’s entry into the industry threatens to shake telcos to their very foundations, leaving the telecom industry wondering where to go next.

As I wrote last week, telecom operators need to find how to monetize the resources they have, and what they have—what emerging competitors from the tech industry still lack—is a comprehensive understanding of their customers. But why hasn’t the telecom industry exploited its wealth of customer data yet? Simply put, the problem for telcos is that they’re still thinking like telcos, and  telcos are still so engrained in the traditional telecom culture that they, for the most part, don’t know how to monetize their resources…at least not in a way that enriches the customer experience.

You see, deploying big data means more than simply selling comprehensive customer portfolios to interested third party marketers—such a strategy would likely result in a full blown customer revolt. For the evolving telecom industry it means using big data to offer better services to its customers, finding ways to make people’s online experiences more personalized and streamlined.

As Telesperience writer Theresa Cottam, said in a recent blog post about data-as-a-service: “There are many benefits to the customer of better use of data – not least that it could be used to provide a more delightful connected experience by stopping annoying irrelevant advertising or offers from bothering customers, while giving them more of what they want.”

As I close my exploration of the changing telecom ecosystem let me say this: From what we’ve seen so far it’s abundantly clear that telcos have already been beaten at their own game; tech companies like Google have already usurped their role as wireless providers. Once those tech companies actually build their own wireless networks, well telcos will be out on the street, unless of course the telecom industry can successfully manage this metamorphosis and learn, as quickly as possible, how to compete in this new digital age. To do that, telcos will have to learn how to leverage their “big data analytics capabilities to start monetizing their customer insights,” to create value-added services that will provide a better experience for end users.

But as Matthews writes, “only so much time can be spent in the chrysalis…the spiders are coming!”

Previous post:

Next post: