A new customer service paradigm for Communications Service Providers

By Michael Pawlak, Senior Industry Consultant Communications, SAS

Forgive the overwhelming obviousness of this statement, but it has to be said that Communications Service Providers (CSP’s) are facing a sea change in how they service their customers.

Actually, it’s more than a single sea change, as there are many seismic shifts in the communications industry taking place at the same time. Virtualization, IoT and 5G are some of the transformative changes impacting CSP’s across the globe. Add to this the shifting dynamic of the consumer, as the Millennial’s continue to overtake the Baby Boomers as the largest segment of a CSP’s customer base, and you can start to see that today’s reality for a CSP might look nothing like what tomorrow’s reality will be. And tomorrow is not that far off. This will require a dynamic, adaptable business model that might need to continually change in order to meet customer demand. Consider:

• According to the GSM Association, there were 3.6 billion unique mobile subscribers in 2014—about half the world’s population, compared to less than one in five in 2004. That number is projected to grow by almost three billion more subscribers by 2020, mostly in the developing world, where the economies of a mobile infrastructure make it more attractive than a wired infrastructure. To support this wireless infrastructure, CSP’s will invest $1.4 trillion between now and 2020.
• Machine to machine (M2M) connections are increasing at a frenetic rate. The 5 billion connected devices estimated in 2014 will grow to 27 billion by 2024, according to Machina Research. Estimates of the business value of the opportunity of the “Internet of Things” (IoT) range as high as $14 trillion by 2020. It is anticipated that the CSP of the future won’t be about voice communications, at least not as their primary source of revenue like it is today.
• The mobile economy is driving huge returns for small and medium enterprises—up to twice the revenue and eight times the number of jobs created, according to Forbes magazine. Consumers value their mobile devices at 11 to 45 per cent of their annual income.

THE VALUE OF mobility

There’s a lot at stake for CSPs. The freedom of mobility, the value of connectivity, to both the customer and business, as data consumption is quickly overcoming voice consumption, these are only starting points for the mobile revolution. For a CSP to actually manifest the value of this revolution, they must be able to mine the value of the data that these devices are creating, and that demands a new business model where data is the key lynchpin. Data about their products and services, data about how their customers use these products and services, data about the connected machines that enable these products and services, and data about the infrastructure that supports these connections. An almost insurmountable amount of data is being generated, and analytics makes leveraging this data possible.

Let’s take a look at just a small pool of what this data means in terms of business models for CSPs: Almost every device continuously generates data. Am I roaming? Where am I roaming? If I’m consuming data, where is it being consumed, how is it being consumed, and why? There’s global positioning system (GPS) and other geographical information system (GIS) data to be absorbed. How does it relate to what is being consumed? What does it all mean?

We can only find out if we smash together the data siloes of the network and the customer in order to generate a holistic view of these experiences. This is where the richness of this data starts to take shape, and the value of this data starts to be realized.

THE NETWORK WILL NO LONGER BE THE CORE BUSINESS

The network of the past—and it’s a not so recent past—was the core business value driver for most CSPs. The network was isolated from almost every line of business, and in some cases right down to human resources and finance. These network business units focused on a very clear business model, keep the network up and running at all costs. Are we achieving “five 9s” uptime? Are we meeting our service level agreements (SLAs) for our enterprise customers? Are we helping to reduce customer churn by improving network performance? These were the three main questions that network executives would primarily concern themselves with.

Meanwhile, the customer care side of the business was dealing with different business problems. Why is my coverage inconsistent? Why am I getting poor coverage in a particular area? How come my device works fine in some areas, but not in others? Why am I being billed for services I didn’t know I was using? Why should I stay with this provider? The business units directly supporting the customer were focused on a very different business model, how do I keep the customer happy? This goes much deeper than keeping the network up and running at all costs, and touches on the myriad of questions these business executives concerned themselves with. Everything surrounding the customer’s perception of the products and services they pay for, and the overall values they believe they receive, are what customer business executives concern themselves with.

The epiphany that CSPs are starting to realize is that the network business and the customer business each collect a tremendous amount of data that can not only benefit themselves, but can also benefit each other. This is at the core of the paradigm shift taking place in the industry. But simply recognizing the value of all this data is only the tip of the ice berg. Connecting this data and then making sense of this data is where the real values lie, and this requires analytics.  How would network executives adapt their business decisions with insights about the customer, what they are feeling about the products and services they use and why they view the enterprise the way they do? How would customer executives adapt their business decisions with insights about the network, how it is functioning, when changes are being made and which customers those changes will impact?

So what would happen if these business units could share these insights between each other? A lot of things. By applying analytics to this huge volume of integrated data, business decisions will be completely transformed.

Here’s just a start.

• Planned outages are necessary. Sometimes it’s hardware that needs replacing. Sometimes, it‘s a software upgrade. Sometimes a node is malfunctioning and needs replacing. In any event, knowing the amount of customer traffic that will be impacted, what products and/or services will be impacted, where the impacts will be realized and the value the impacted customers bring to the enterprise can help the customer organization minimize customer disruption. It can also help improve how the impacted customers are communicated with, which can improve a customer’s overall experience, even with a temporary outage, and improve the enterprise brand. Knowing what products and services a planned outage will impact, the number of customers impacted by a planned outage and the value those customers bring to the enterprise can help the network organization better plan these outages. Would it make more sense to plan this outage for a different day? Would it make more sense to plan this outage for a differing time on a different day?
• Infrastructure upgrades need to occur, but when and how they happen are critical to how successful a CSP can be. Where do we need infrastructure upgrades?  What kind of infrastructure upgrades do we need? Are we talking voice or data traffic? Some areas haven’t been upgraded to 3G network capability. Sorry, but 4G is table stakes and 5G is coming down the pike. What does the data say about how and where you allocate your CapEX infrastructure spend?

And possibly the most important impact analytics can have is how can it help your most talented, most insightful, most strategically effective people make better decisions about the direction of the business? Data is important. Analysis of data is critical. The people who make decisions based on analysis of the data are the most valuable asset a company has. Giving them the analytics tools to make the most effective decisions for the company pays off.