As the pandemic unfolded, it found the telecommunications sector already grappling with a decade of disruptive influences, impacting profitability and necessitating a redefinition of interaction models in light of the digital innovation introduced by firms like Uber and Netflix.
The sector witnessed accelerated shifts in consumer behaviors, leapfrogging an estimated 3-10 years, which in turn saw tech enterprises such as AWS and OTT platforms command a larger share of the telecom arena, thereby compressing the space for traditional telecom services.
Advancements in Artificial Intelligence (AI), Big Data, and the Internet of Things (IoT) precipitated a transformation in service delivery and value proposition paradigms. Additionally, the competitive landscape experienced a shift in focus towards technology-centric domains such as software-defined networking, Software as a Service (SaaS), and Over-the-Top (OTT) services, brought on by competition from both traditional and novel market entrants.
Telecom companies found themselves at a crossroads, with the onus to evolve into media entities or tech enterprises. Many grappled with this transition and stumbled, yet there have been instances of telecom firms successfully diversifying their service portfolio and metamorphosing into holistic digital service providers.
In an era of increased connectivity and global integration, telecom firms have been compelled to confront the inadequacies of their traditional business models. Their pace in deploying innovative solutions across both media and telecommunications did not match the rapid evolution of market dynamics and consumer expectations.
New Competitive Advantages: User Experience
In a notable shift, telco’s historical competitive advantage anchored on network coverage and speed has pivoted towards the centrality of user experience, deployment agility, and innovative network services. Tech breakthroughs such as telecom analytics, virtualization, cloud technologies, open-network structures, service orchestration, API exposure, automation, and AI hold promise to bolster operational efficiency and unveil new revenue opportunities, a necessity in the face of declining ROI.
However, the journey is fraught with challenges. Technological advancements, while beneficial, simultaneously empower big tech entities and digital disruptors to vie for market share with telcos. Thus, when telcos enhance their offerings, they inadvertently amplify the competitive strength of sectors like OTT, Media, and Technology.
The question arises: what could act as a game-changer, spurring revenue growth in the sector? The answer lies in leveraging data and harnessing the power of Telecom Analytics. While factors like network sharing, network slicing, virtual networks, and open networks play significant roles, the real driver of change will be the Quality of experience by a customer.
Reliable and consistent network performance is paramount for telecom customers. This implies services that function when needed and with consistent speed, latency, and reliability. Interestingly, network performance, not price or customer service, or extras, is responsible for 40% of customer retention or churn.
Regrettably, many telcos remain focused on generating aggregate network metrics such as average speed, marketing claims, or Average Revenue Per User (ARPU), limiting their ability to look beyond short-term revenues and overarching metrics. Without specific data, telcos are unable to envisage the bigger picture and effect meaningful change. Hence, the focus should be on shifting from a traditional metrics-driven approach to one that emphasizes specific data and customer experience.
Quality of Experience (QoE): A Determinant of Customer Perception
Quality of Experience (QoE) in the network is determined by several factors, including coverage, connection speed, data throughput, latency, reliability, and consistency. Any compromise on these factors can mar a customer’s perception of the service provider. Consequently, telecom operators work assiduously to ensure superior network QoE, which directly contributes to customer satisfaction, loyalty, and a positive user experience.
Therefore, instead of focusing solely on network-level metrics, telecom companies should monitor QoE at the user level. This shift in focus allows operators to glean insights into real customer experiences and make impactful adjustments. Telecom operators should revisit their investment strategies, place customer needs at the core, and focus on improving the QoE through means like network slicing or prioritizing certain applications.
Introduction to Telecom Analytics
Telecom analytics is a specialized discipline involving a suite of data intelligence procedures tailored to the needs of Telcos. Telecom analytics draws from various data sources, including network data, Business Support Systems (BSS), Operations Support Systems (OSS), and other internal and external IT applications, to derive actionable business insights.
With the enhancement of artificial intelligence and machine learning (AI/ML), the field of telecom analytics is evolving from mere reactive measures to proactive strategies and predictive capabilities. You can also study how AI Analytics is impacting the entire field of Data Analytics.
Telecom analytics enables operators to balance network resources effectively. This ensures the optimization of network performance, a critical element of QoE. By predicting traffic patterns, telecom operators can allocate resources where they are needed most, preventing service degradation and maintaining consistent service quality.
Finally, with AI/ML capabilities, telecom analytics can automate many processes, from network optimization to personalized customer communication. This not only improves operational efficiency but also ensures a seamless and personalized customer experience, a key component of superior QoE.
The Road Ahead for a Teleco
It’s not a mad rush to acquire more and more customers, when it comes to QoE, the telco should turn to the best of the customers. Identify the best customer, charge a premium for the services, and get higher customer advocacy, cost advantage, and competitive advantage.
Rather than engaging in an all-out scramble to attract vast quantities of new customers, telcos should pivot their focus toward their high-value customer segments when addressing Quality of Experience (QoE). The objective is to identify and cater to their top-tier customers, charging a premium for high-quality services, which can in turn drive higher customer advocacy and create cost and competitive advantages.
Leveraging telecom analytics strategically can amplify QoE, which directly bolsters customer retention and facilitates charging a price premium. know more about How SCIKIQ is transforming Data analytics for Telecom. Customers experiencing high QoE are less prone to migrate to competitors, thereby mitigating churn. Furthermore, superior service quality and bespoke experiences can justify a price premium, thereby augmenting revenue. Therefore, the strategy of enhancing QoE via sophisticated application of telecom analytics emerges as a potent catalyst for growth in the fiercely competitive telecom sector.
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