Telcos ignore big data at their peril

Well-executed big data analytics projects require flexible business structures
Telcos must embrace big data to unlock new revenue streams.
Telcos must embrace big data to unlock new revenue streams.

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Telecom operators that ignore big data do so at their peril, according to UK-based research firm, Ovum.

Operators can benefit from big data analytics in numerous ways, including predicting and reducing churn, promoting loyalty, upselling and cross-selling offers, and personalising services. But despite this, many operators have failed to capitalize on these benefits because of a traditional stumbling block – telco organisational and data structures, according to Ovum.

In new research investigating how telcos can monetise customer data, Ovum reveals that a well-executed big data analytics project requires flexible business structures and logical processes, not siloed structures with artificial constraints (i.e. internal politics) that have been defined by the network domains.

In order to succeed, telcos also need to become more data-centric and take lessons from the leaner and more agile data analytics models that are currently being pursued by over-the-top operators.

Only once this issue has been resolved will telcos be able to effectively monetise the increased volume, variety, velocity, and value of the network, subscriber, and business data that they collect as part of their businesses.

“The proliferation of smart devices and services has led to a considerable increase in the number of customer–telco interactions. This is happening through multiple channels, which is forcing telcos to sharpen their focus,” Clare McCarthy, head of Ovum’s telco operations practice, said. “As a result, mining a greater volume and variety of data, and doing so in realtime, is becoming a powerful competitive advantage for telcos.”

However, according to the research, many telcos still lack the necessary data management and analytics skills in-house to make their data work for them. As data scientists are in high demand and short supply, this area is ripe for vendor support, either with pre-integrated solutions or hosted services.

Telcos are generally turning to one of four sources for their big data analytics needs: their existing OSS/BSS providers, trusted IT vendors, telco analytics specialists, or incumbent network equipment providers. Each carries its own particular competencies and strengths in vying for a share of a big data analytics market that Ovum forecasts will be worth US$7.7bn in 2018.

“Transforming ingrained operating models and business processes is a difficult task for telcos, and many are not entirely sure what they are transforming towards. Therefore, choosing a business intelligence and analytics solution and partner will be one of the most important strategic decisions that they face in the next year,” McCarthy said.

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