The revenue trends have shifted. There is no doubt about it – the data monetization has taken center stage! Not just that, but the way how telecom operators are utilizing their data has undergone a big transition!
Telcos have a veritable pool of customer behaviour data, probably more than any industry. The massive gold mine of data includes Internet usage, location, behavioural and buying patterns, app and OTT consumption, roaming usage, travel patterns, and much more. In addition to customer-related data, Telecom industries harbour network and operational data. Though many major telecom players have already been implementing this data to gain insights about their own organization in order to improve sales and customer experience, boost marketing strategies and optimize network performances, there’s still a lot they can do with the opportunities provided by the vast data pool.
Out of several other lucrative opportunities sourced from data, telcos can now entirely focus on creating new revenue channels by simply monetizing it. Over and over again, technology leaders have said it, “data monetization pays off’’ if done right. However, not many operators have treated data monetization as a revenue channel because they face multiple challenges with regards to finding the right technology partner, getting the right choices from ever-evolving options, and implementing the right operating and governance models to foster the right data monetizing decisions.
So, despite these conundrums, is there the best reason to monetize data? To become more convinced with the idea of why data monetization is essential for telcos, check these key findings.
Key Findings:
As the globe shifts towards the Internet for every mobile service, with carriers forming the central part of the mobile economy, telecom operators must find newer ways to be ahead of the game by adopting data monetization strategies. Here are some of the crucial findings to support the fact about why every telecom operator should think about data monetization as one of their revenue streams.
● According to a study by GSMA, the mobile ecosystem revenue is forecasted to grow to nearly $3 trillion by 2020.
● According to the same study by GSMA, 5G technologies are expected to contribute $2.2 trillion to the global economy between 2024 and 2034. Key sectors such as manufacturing/utilities and professional/financial services will benefit the most.
● As per a research report by Ericsson, the data traffic per smartphone will grow to 10 times than its current volume by 2022.
● As per Research and Markets, the total global revenue being generated by Telecom API will reach a massive $319.6 billion by 2023.
● According to industry analysts, the $500Bn Content / Advertising market is eager to get customer insights to generate higher conversion rates with more contextualized advertising.
Why should telcos approach external partnership models and leverage data to boost profitability?
Telcos’ data monetization journey is not a recent trend; it began in early 2000 with their own strategies to develop business intelligence capabilities to generate insights from raw data. And only in the recent past telcos have built strong external partnerships with third-party enterprises to leverage data for creating innovative offers and services for customers. Data has become more structured with AI, and data quality has improved significantly, leading to refined customer databases now. These customized and refined customer databases can be bought by third party enterprises to create custom-made products and offerings.
For example, the Telecom Marketing teams can easily monetize customer data based on location by partnering with retailers and sending campaigns and promotions in a targeted, real-time, contextual, and relevant manner. In many cases, operators can implement data monetization to develop localized pricing, area-wise offering, individual plans, and much more in real-time service offerings.
Telefonica is one of the major telecom brands engaged in multiple collaborations with big brands such as Heineken, and United Colors of Benetton. In 2017, this operator acquired Statiq-a leading UK geolocation data start-up. Statiq processes plethora of location data signals to identify the places people visit and build consumer profiles. This helps advertisers to better target ads based on a user’s physical location and track whether they visited a retail store after seeing an ad.
Other monetization opportunities include partnering with advertisers and travel industries that use location data to personalize offers when customers are in that geography. Enterprises are also looking at ways to use customer data to incentivize, reward, and promote services to their existing customers. They are looking at ways to manage real-time campaigns without having to grind to get customer intelligence. Besides, these enterprises want to deploy data-led loyalty programs as a part of their marketing strategy targeted towards customer retention. And, if Telcos could take advantage of these requirements by making it convenient for businesses to connect with their customers using data, then it is quite probable that data monetization will essentially become a part of their long-term success story.
But what is stopping these carriers from helping them realize the true potential of data monetization?
Challenges lurking around data monetization
Several telecom players have invested in ‘analytics and AI’ as a part of their core investments. However, the results and benefits have not been fruitful, which is why telcos are still reluctant to do full-fledged monetization with data. Here are some of the challenges that are stopping telcos from harnessing value from data monetization investments.
Data Privacy
External data monetization strategies draw attention to one of the significant risks of data handling, i.e., – privacy breach. Data privacy is a growing cause of concern for many telcos, as well as national security organizations. However, many efforts have been executed by these organizations and telcos to build robust security around data privacy. Owing to the host of regulatory and compliance involved in sharing data, telcos often find themselves in a tight spot as they need to get proper legal consent from users/subscribers and anonymize and encrypt the data before using it.
Simpler and user-friendly tools
While the opportunities lurking around monetization is vast, adopting a suitable and easy product or framework to extract actionable insights is hard. Lack of user-friendly tools and techniques for analyzing data to send targeted and contextualized offers to customers have put telcos into dilemmas of whether to invest in data monetization or not. Despite having a myriad of options to pick from, many of the operators struggle to find a single solution that can do the job of both extracting data and using the insights to run personalized campaigns. Besides, without having a tool that’s easy to use for third party enterprises, data monetization may not prove useful in the longer run. Needless to say, the right solution should enable telcos to partner with B2C entities to send campaigns and promotions in a targeted, real-time, contextual, and relevant manner, without any trouble while onboarding enterprises.
High-Value Identification
No organization can start execution of data monetization strategy without knowing what kind of data can generate value chain opportunities. The data presented to the operators, and beneficial to various businesses, is in raw form, and is not structured the way most telcos want it. And, the most critical factor in data monetization lies in the cleansing of data to understand what value each customer or subscriber brings, and glean insights on customers that have the best value creation potential for the operator and the partnered enterprise.
The first few steps to take
With their divergent data sources, telecoms that welcome data monetization will remain profitable and gain an edge over their competitors in the future. But, before that, here are some of the few steps that they should take before making data monetization as their core strategy. Telcos should aim at ensuring that they are playing a significant role in their customers’ digital lives and capturing value for themselves as well as third-party enterprises throughout the data monetization journey. The litany of challenges and steps associated with the implementation of the right monetization strategy will not end here. Follow PART 2 of this article and learn what it takes to bring data monetization to life across Telco’s growth pillars.
Pelatro’s mViva Data Monetization Solution (DMS) presents an opportunity for the Telecom Marketing teams to monetize customer data by easily signing up and charging the EPs (Enterprise Partners). The solution even enables telcos to partner with B2C entities to send campaigns and promotions in a targeted, real-time, contextual, and relevant manner.
