Evolution is afoot in the communications industry. Traditional mobile voice and messaging revenues are shrinking, while more lucrative opportunities in digital voice, content and applications delivery are exploding. Communications service providers (CSPs), including mobile, multiple system operators (MSOs), over-the-top (OTT) and media providers, are facing rapid disruption with significant revenue and margin pressures.
As Verizon’s $4.8 billion acquisition of Yahoo demonstrates, CSPs are looking for new opportunities to grow. Writing a check is easy. The real trick is adapting systems, processes and culture to take advantage of the new digital world. As many are finding out, there’s a steep learning curve.
Here are three ways smart CSPs are moving from what they are very good at – traditional, high-volume phone and internet connectivity – into the new era of digital services:
Moving from hardware to cloud solutions helps accelerate infrastructure upgrades. For example, deploying cable subscriber set-top boxes requires home visits by techs that are annoying to customers and expensive for providers. And, unlike modern digital services that are tethered directly to the consumer, the set-top box perpetuates the outdated notion of tethering to a physical address instead of to an account.
One example of a company moving with digital dexterity is Charter Communications with its Worldbox cloud-based TV service. Instead of using set-top boxes, Worldbox does most of its computing in the cloud, so new features can be rolled out in real time. This eliminates installations and allows rapid deployment, faster time-to-revenue and happier customers.
Companies like Amazon and Netflix have mastered the art of using mountains of consumption data to gain unique insights into customer usage trends, behavior patterns and preferences. Leveraging this data, they can elevate customer service, provide highly personalized incentives and adjust product catalogs.
In contrast, CSPs typically keep usage data in a few separate silos. Finance data goes to finance, billing data to billing, and so forth. While they may realize that this data is extremely valuable, CSPs have historically been unable to efficiently and effectively analyze it. Often, customer support will need to access a separate system to understand a caller’s usage history.
To overcome this, new monetization platforms bring together data and allow CSPs to glean insights hidden in other parts of the organization. And, analytics tools enable them to consider all the aspects of customer data in order to better serve their clients and capitalize on cross-sell and upsell opportunities at every revenue moment — which ultimately builds customer loyalty while growing incremental profits.
Perhaps the biggest challenge is reliance on outdated business and operation systems. Typical CSP BSS/OSS infrastructures simply don’t support today’s constantly changing needs or customers that “want it all and want it now.” Moreover, the age of machine-to-machine connectivity and IoT, with the imperative to leverage the firehose of data flying out of millions of connected devices, necessitates that CSPs be nimble and adaptable. Existing legacy systems can take months to implement a simple change and simply can’t accommodate this requirement.
Ripping and replacing these systems could cost hundreds of millions of dollars and pose extreme risks to their existing businesses. But doing nothing will relegate them to the slow lane until they grind to a halt.
Enter the cloud.
Specifically, a net-new cloud-based “agility layer” on top of that infrastructure behemoth. This layer can be the starting point for quickly creating and managing the critical OSS/BSS functions demanded by newer DSP products and services, such as recurring billing, packaging, bundling, subscription management and customer care, while peacefully coexisting with legacy systems, which should get only the resources required to stay operational.
Customers and internal teams like cloud-based solutions because they offload general functionality so that people can concentrate on core strategy and tactics. Line-of-business leads at telecoms like being able to quickly test, deliver and iterate their packaging, pricing and promotions without IT support. In the end, marketers are more focused and get products to customers more quickly. Buyers get greater choice. The net result is a win for both sides of the equation.
Ultimately, it amounts to good business.
Sean Rollings, VP of product marketing of Aria Systems, is a seasoned product and corporate marketing executive in the high technology, software and consumer products industries.