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Benefiting from the Digital Economy: Part III - Digital Services and role of Big Data for CSPs

David Sliter.jpg

In this final in-depth discussion of our Digital Economy series, David Sliter, VP and GM of HP's Communications and Media Solutions business looks at Digital services that are succeeding today and discusses the relevance of Big Data to this discussion.

 Dave is interviewed by Richard Arthur, HP.

 

 

Note:  this is the final article in a series of blogs addressing the Digital economy and its impact on Communications Service Providers and the telecom industry.  The first blog is also posted in the HP Telecom IQ blog  here. The second is here.

 

 

 

 

 

Dave, last time we identified key digital services such as Media and Content, ICT services including Cloud, Financial and M2M services, to name a few.   Which ones are actually succeeding today?

 

As I highlighted in the last interview, there is no single “killer app” succeeding everywhere.  A CSP’s success will depend on their own strengths, abilities and local market conditions, as well as their ability to change. 

 

Some of the key areas are:  IPTV or “Telco TV”, Mobile Money, and Information and Communication Technology (ICT) services.

 

TelcoTV is a mixed picture with US Operators taking audience numbers and satisfaction ratings from the cable operators while in other geographies IPTV is not taking off at all.     Broadband TV says in key markets growth actually slowed in main markest, with some, like Spain and Italy, showing a decline.   It seems TelcoTV is very market and service provider specific.

 

CSPs in Africa are moving quickly into Mobile money and mobile banking solutions, taking advantage of a relatively high mobile penetration, coupled with a large “unbanked” population.

 

CSPs in Japan are able to take advantage of Japan’s market particularities to sell content and ICT services.   While in Korea CSPs have strong youth brands which they use to drive gaming, social media and content offers to their subscribers.

 

In Western Europe and North America opportunities are typically more fragmented due to the strengths of “Over the Top” players such as Facebook for social contact, Google for applications, and Amazon for cloud computing.  

 

 

What are CSPs expectations for Digital Services today?

 

Some CSPs are very transparent about what they are doing and have announced financial targets in these new services.    NTT DoCoMo, for example, just announced an intention to take $11B of revenue in non-core services by 2015,  with the lion’s share evenly split across financial services, media and content and commerce. This represents about 25% of current revenue.

 

Telefonica Digital, a Telefonica business, expects to create Euro 5B (about $6.8B at today’s rates) by 2015, against a revenue of 62B euro (2012) for the entire business.  Telefonica digital is targeting pretty much all of the Digital services areas we identified above.

 

I personally think CSPs need to quickly and aggressively into these new markets – as these two are doing.  You only have to look at the music industry to see how quickly the playing field can change when the barriers to entry drop and business models are turned on their heads.

 

 

You referred to CSPs ability to change as being important?

 

Yes many CSPs lack the necessary client-oriented culture – too used to treating customers as subscribers and telephone numbers.  Successful CSPs in IT services have a specific long-term IT services strategy, successful vertical projects, project-oriented management and specific IT skills. Clearly defined business units (BUs) in areas like IT services and now in other digital services markets such as vertical solutions or in finance and payment, have their own business unit, division or spin-off, organization and potentially culture.     

 

As discussed earlier the corporate structure to take will vary for each set of services and for each CSP dependent on local market conditions.  For example, it will be difficult for Verizon to be a cool youth brand, whereas SK telecom seems to manage it.

 

So for each set of services CSPs will need to decide (and some already have) how best to structure for success with those services.    Cloud and IT services may fit well into the CSP’s Business/enterprise business unit.  M2M on the other hand may be better suited to a separate smaller unit with more agility, freedom to partner, and not tied to the CSPs network.  Consumer services competing with OTT players such as Facebook may be better suited to a separate brand and separate corporate entity.

 

 

How is Big Data relevant to the Digital Services discussion?

 

Big Data is receiving a lot of hype right now with the potential of there being a “trough of disillusionment” (borrowing from the Gartner Hype Cycle) on big data.  So we have to be careful not to exaggerate the potential.  However big data as a service in its own right and as part of financial, commerce, online video and other services will also be very important.

 

It’s important to remember that the data by itself doesn’t provide value; transforming that data into insight and knowledge provides the value.  Insight allows the business or organization to take action.  That business action typically falls into one of the following categories for the CSP:

 

1)      Targeted Product and Marketing offers:  proposing new CSP services, options and upgrades based on knowledge of the customer.    Personalized application stores and ads that are inserted by the CSP.

 

2)      New business models such offering anonymous customer data to partners thereby personalizing ads or other content.

 

3)      Network Optimization:  tune network resources to optimize customer experience

 

4)      Customer Experience Assurance:   personalize customer support; focus the operations department on prioritizing the customer experience. 

 

5)      Revenue Protection: Monitoring revenue streams, covering both revenue assurance and fraud prevention across business lines.

 

 

 

Why CSPs and Big Data?

 

We think CSPs have the ability to extract big value from big data, after all they have been doing it with call detail records for years.   They have become adept at high volume data processing in billing mediation, fraud management and in data retention and lawful intercept– which are, by the way, all areas which we at HP work extensively in.

However big data skills and use are fragmented in CSPs.   The marketing department may see value in mining customer data, but does not have the skills to gather and analyze cross-departmental data.  We recommend an overall enterprise architectural approach to big data.  Not necessarily implementing a big bang solution, but rather having an overall enterprise view and governance with each department contributing or working on big data for their needs.

 

Then there is the question of what data to gather.

 

From a CSP perspective in order for big data analytics to be successful, it needs to encompass all the touch points that people use for communication and be integrated with historical amd context information about the user, their social media communication and the applications and services that they access on a daily basis.  Why is this important? Because that’s the only way telcos can enhance the user experience and differentiate themselves from their competition.  This more true than ever as traditional differentiation in pricing strategies, telephony bundles and handset subsidies become less of a differentiator.

 

So what is required is not just vanilla flavored analytics but rather "personalized real-time analytical information" across various mobile client devices, mobile applications and the technologies they are connected to, be it WiFi, LTE, HSPA+ and so on. In this manner, users will get relevant information based on their context (interests, location, device type, network type, customer type, preferences etc.).

 

Once personalized real-time analytical information is attained, it can be integrated with location and eventually to the advertising platform itself.   We then have a new market opportunity which is personalized real-time targeted mobile advertising. Our “Smart Shopper” proof of concept we are currently engaged in brings hardware (including wi-fi, and networking) as well as software and services to take advantage of this opportunity in a retail setting. 

 

So to conclude, big data analytics is not just about processing both structured and unstructured data in the CSP, but rather how CSP’s use that strategic information for revenue and profit. Big data presents both its own opportunity for new revenue generation, and an opportunity to enrich both traditional and digital services.

 

 

Note:   this is the final article in a series of blogs addressing the Digital economy and its impact on Communications Service Providers and the telecom industry.  The first blog is also posted in the HP Telecom IQ blog  here.  The second is here.

 

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About the Author
Richard Arthur has enjoyed the last two decades of the wild ride that has been the communications industry since deregulation. He is curre...
About the Author(s)
  • Alain Decartes has over three decades experience working in the Telecommunication and IT Sector. Here he has had roles in a variety of sectors including the Value Added Service, Cloud Services and Apps Store market worldwide. He has strong skills in international sales, marketing and business development. Alain is HP Software’s worldwide Industry Solution Marketing Lead for the Communications, Media and Entertainment (CME) industry and sub-segments. In the past, Alain has held senior roles with Unisys, Comverse and Prodata Belgium. He is a popular speaker, moderator or chair at worldwide industry conferences. Alain has been a Board member at the International Association for Enhanced Voice Services. He has also won a number of Industry accolades including The Messaging Industry Association Special Recognition Award. Alain received a Civil Engineer in Telecommunications degree from the Faculté Polytechnique de Mons in Belgium.
  • Sigge Andreasson is Worldwide Solutions Marketing Manager for OSS Transformation, CMS at HP. Sigge has more than 25 years of experience in the telecom and software industries, and has held a number of different positions during his career with HP, spanning telecom engineering, pre-sales and marketing. Sigge holds a Master of Science degree in Electrical Engineering from Chalmers University of Technology, Sweden.
  • Julia Mason-Ochinero is WW CME Marketing Lead, HP Enterprise Marketing. In this role, Julia is responsible for driving dialog with CSPs on how they can transition to sustainable, profitable business models and enter into co-opetition with over-the-top (OTT) content providers who are changing this industry’s landscape. She joined HP in 2010 from Accel Partners (where she worked as a consultant.) Prior to Accel, Julia held marketing leadership positions with companies including Adobe, Nuance, OpenWave, Novell, Nuance Communications and RealNetworks. She began her career in Chicago working with organizations including AT Kearney, Andersen Consulting and Ameritech. She currently resides in Silicon Valley.
  • Marco has over 15 years’ experience working on strategy and innovation projects for major clients in the Telecom and Media Industries. He helps clients to improve their business performance through the adoption of strategically-driven technology solutions.
  • Marie-Sophie Masselot is bringing her thought leadership in business transformation in the telecom arena, thanks to her latest role as the marketing lead for the HP Solution Consulting Services practice worldwide. She is coming with a technical background as computer sciences engineer, having held different positions from software development through supply chain or sales support in telecom companies.
  • Michel Ferachoglou has over 20 years in IT and Communications, holding senior Product Management, Business Development, and Marketing positions with HP, as well as held various people management, strategic and business planning roles. Today, Michel is leading the NFV marketing program for CMS, along with a number of cross-portfolio activities within HP CMS Solution Enablement team.
  • Marie-Paule Odini is a seasoned HP executive, bring over 25 years of telecom experience. She has deep expertise in both the networking and IT environments, bridging voice and data. Marie-Paule is the HP CTO for Europe, responsible for the Communication and Media Solution organization, focused on customer innovation and emerging trends. She leads the technology discussions for M2M, Analytics and Cloud. She seats on ETSI and other standard bodies. She is a frequent industry speaker and editor in professional magazines, blogs on HP Telecom IQ and tweets on CMS twitter account. Marie-Paule’s prior responsibilities include managing HP’s worldwide VoIP program, HP’s wireless LAN program, and HP’s Service Delivery program. Since joining HP in 1987, she has held positions in technical consulting, sales development and marketing in Europe and in the Americas. Those roles have focused on strategic and operational responsibility for Networking, IT and operations. Marie-Paule holds a master’s degree in Electrical Engineering from Utah State University and business education from INSEAD, Paris. Prior to joining HP, Marie-Paule spent five years with France-Telecom/Orange research and development labs, defining architecture and value-added services launch for corporate customers. She also worked with standard bodies and industry forums at that time. She enjoys skiing and outdoors in general.
  • Oded Ringer overlooks HP's worldwide marketing strategy for Actionable Customer Intelligence (ACI) solutions. With many years in the Telecom industry, at companies like Alcatel-Lucent and TTI-Telecom, Oded focuses on Go-To-Market strategies bringing together Products, Business, Operations, Sales and Marketing.
  • Richard Arthur has enjoyed the last two decades of the wild ride that has been the communications industry since deregulation. He is currently leading the Services and Solutions Marketing team in HP’s Communication and Media Solutions business unit. This role embraces transformative telecom solutions including telecom cloud services, outsourcing, solution lifecycle services, OSS/BSS and network platforms. Richard is also managing the CloudSystem Service Provider Program in HP.
  • Grace has initiated and implemented in last decade the first support contracts for large Telecom operators like France Telecom, Vodafone, BT...Today she is in charge of developping support services which are maturing with a shift from reactive break/fix models to more-proactive and enhanced offerings that add business value.


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