Customer data offers revenue stream for operators

Operators are under-utilising valuable customer information stored on their servers, when instead they could use it to create alternative revenue streams to their traditional voice, SMS and data business.

Dawinderpal Sahota

September 25, 2012

3 Min Read
Customer data offers revenue stream for operators
Report says operators have plenty of new wasy to offset revenue declines caused by OTTs.

Operators are under-utilising valuable customer information stored on their servers, when instead they could use it to create alternative revenue streams to their traditional voice, SMS and data business.

In an Ovum report entitled Dialing into Telco Data, the firm highlighted opportunities where operators could use customer data as a revenue driver. One such opportunity is in providing secure identity and billing. Operators can become “trusted identity brokers” by using their subscriber profile data for online service providers, and offer a trusted gateway for managing and authenticating bills for online purchases.

“A lot of customers are doing online transactions via their phone and it’s not always safe to provide all of your identity data,” said Shagun Bali, Ovum analyst and co-author of the report. “Operators already have customer data stored in a way that is compliant with government regulations, as well as their IP addresses, so they can actually become brokers for that identity.”

She explained that, currently, if a user wants to access Facebook from their phone, they would need to enter their user ID and password, and then to make a purchase, they would need to enter their bank details.

In Argentina, operator MoviStar, a subsidiary of Telefónica is offering a single sign-on service. With one single password, the user can access to online services such as Facebook, Twitter and Flickr. Bali added that the operator is now moving to “zero sign on”, with all a customer’s identities stored on the secure element of the SIM card.

“It’s a good business model, because with services such as m-health, m-commerce all coming into the picture, telcos can come in with a solution and charge third parties for a nominal fee and even their customers for the service.

“If my operator acts as an intermediary, I’d probably have more trust in the services when I log on. If I go through them, it would be in a secure environment, so there’s a lot of scope in that area.”

Another area for operators to use their data to drive revenue is in providing information to retailers for location-based services. Operators are able to identify where their customers are located at any given time, and can even make predictions as to where they will be located later that day. Although regulation dictates that the customer data is made anonymous, this would still be a hugely valuable asset for retailers, according to Ken King, director of telco and media convergence at business analytics software provider SAS.

“The operator has the data to be able to make those predictions that OTT players simply wouldn’t have. If they know where you are now, based on your history, they can I predict where you’re likely to be. So they can make the appropriate offers and target that to you in a way that it gives you a good experience,” he said.

“Consumers are willing to interact with to companies they trust, and there is trade-off. They will allow you to observe them and give you information, provided you’re giving them something in return. That’s the basis of loyalty cards and schemes and that’s what operators need to be able to demonstrate in their offering.”

However, the major challenge that operators face in using their data to generate revenue, is that for many, their customer data is still siloed on legacy systems, due to their past merger and acquisition activity. Therefore, operator IT departments would need to invest in data integration, MDM, and data quality tool and the necessary in-house skills and expertise to use these tools effectively.

“The biggest problem they currently have is data silos; and a lot of operators have started the journey to amend that, explained Bali.

“Secondly they need to have proper data assurance processes in place. Often, their data is duplicated and a lot of times they are in inconsistent formats. Integrating them is a lengthy process, so proper data assurances and a centralised repository is necessary to leverage data to the maximum.”

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