With many telcos undergoing a digital transformation journey innovation is a key topic, and while many are innovative, they don't necessarily focus on the best areas to make them money.

Jamie Davies

February 28, 2017

3 Min Read
Telcos are innovative, just not in the areas they need to be – Netscout

With many telcos undergoing a digital transformation journey innovation is a key topic, and while many are innovative, they don’t necessarily focus on the best areas to make them money.

According to Netscout, the telcos are very creative, but that’s not enough anymore. Telcos need to be looking to new areas, for example content or data tracking solutions for advertisers, in order to remain competitive in the digital era, but it’s not really happening. The status quo has been categorically disrupted, and there’s no going back.

“All of the telcos are having to look further and further forward to develop services which will ensure they remain relevant in the future, but they don’t understand the customer today,” said Donna Candelori, Director of Corporate Communications. “They haven’t cracked the formula of how to best serve the customer now, which is creating a huge task when trying to predict the future.”

Entering into new markets is becoming something of a necessity in today’s digital economy. The facts are plain for all to see; ARPUs are not growing, telcos can’t hire new people and profits margins are shrinking at a worrying rate. To stem the flow of loss and recoup past fortunes every telco is undergoing its own transformation project; they need to be mean and lean to compete in the new world.

Part of this transformation journey is based on intelligence, an area in which the telcos are well supplied but lack the skills to capitalize on. If data is the new oil in the digital economy, the telcos are the barons. Despite sitting on mountains of information on millions of individuals, there have been few successes to monetize this data.

This is where the problem lies for Netscout. “For some of the telcos, the idea of data analysis is a foreign concept,” said Director of Marketing Heather Broughton. “The ambition to be more intelligent is there, but moving into a new area is a big step. Visibility into the data is key, but the majority of the telcos don’t current have the in-house skillset to capitalize on it.”

The idea is to create value. Take for example outdoor advertising. In its traditional context advertisers play a bit of a guessing game; its educated estimates to understand what will be most relevant and successful. The telcos however can offer a firm solution in the location data which it holds on customers. The telco knows where you are, possibly where you are going, if you like Starbucks or Pret, and maybe whether you need to go to the doctor. This information is critical in creating the connected economy and the smarter way of life many companies are eager to realize.

But the problems lie in the execution. Data analysis is a buzzword which has circulated the industry for many years without any real victories. Realistically, we are not anywhere nearer understanding what is good information or garbage, and how that insight can be translated to commercial wins. Until these answers are found, the telcos might be in a bit of trouble.

The traditional means of making money in the telco industry are fast becoming extinct, and venturing into new fields is a necessity. It will require a huge change, both in terms of structure and talent, but also a solid idea of where the company is heading. Data is an asset which is in abundance for the telcos, they just need to figure out how to use it.

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