How big data is reshaping the telecom industry

By Hamilton Ratshefola, Sales Director, IBM South Africa

Cut throat competitiveness has been with the telecom industry since its inception nearly 140 years ago when Alexander Graham Bell beat Elisha Gray in a race to the U.S. Patent Office to lay claim to inventing the telephone. Fast forward to today and we see a highly complex, competitive telecom environment where voice services have taken a back seat to a growing range of data intensive services such as streaming music, radio and video, high definition video, online gaming and social media.

Transporting all of this data through their networks is resulting in shrinking margins and network congestion for the carriers. But don’t hang up on them yet! Many of the carriers are starting to embrace advanced analytics, finding ways to either annonymize the data or offer opt-in programs enabling them to tap their goldmines of customer information for competitive advantage.

A new IBM study on how telcos are using Big Data highlights this trend: 85 percent of the respondents indicate that the use of information and analytics is creating a competitive advantage for them — a 124 percent increase in the last two years.

According to the study more than half of the telecom respondents reported using internal data as the primary source of big data within their organizations. Traditionally this has meant data extracted from phone calls, transactions, call center interactions and call detail records, like who made the call, who received it and duration of the call. But the proliferation of smartphones opens up a whole new category of transaction records, called XDRs which capture other transactions such as the purchase and download of a song or a video clip, a recharge on a prepaid account, or a mobile payment. Carriers are already using this type of information to improve customer experience, align solutions to customers’ needs and help predict the potential for up-selling or cross selling products and services.

Forty-six percent of the study’s respondents with big data efforts said they extract data from social media sources such as Twitter, Facebook, message boards and other online locations where consumers chat and post opinions. It enables them to quickly detect customer issues and consumer sentiments, and to increase revenues, reduce costs and protect their brand. And 45 percent of the carriers with active big data efforts use location data to do things like support intelligent marketing campaigns, detect fraud and improve network quality. The new trend is not only to understand who the customer is, but to have a more contextual, location-based and real-time view of them.

While telecoms’ extensive use of Big Data in itself may not be surprising, what is intriguing is how they’re increasingly using this competitive advantage to drive new revenue streams in completely different industry areas. For example:

• A major US network operator is combining its customer record data with sentiment analysis. They’re able to determine  what type of people pass by a billboard at a particular time of day, and what products or services they might be most interested in.  The carrier can then sell the information to a digital billboard operator which will be able to more accurately target its billboard ads to the demographics of the actual traffic.
• In Europe we are working with Deutsche Telekom on a collaboration to help build smarter cities. By combining IBM’s expertise from thousands of smarter city engagements with Deutsche Telekom’s global M2M capabilities and advanced network connectivity  we’re able to offer cities solutions designed to help them  improve the quality of life for citizens, who will be able to anticipate traffic delays and bus or train arrivals when travelling, find public parking spots more easily, and gain improved access to a wide array of relevant city information and services.
• On the retail front, telcos are also looking at a number of ways to develop multi-channel marketing campaigns with real-time geo location  and social media analysis. In this case,  a mobile subscriber could opt into a program in which his carrier can let an electronics retailer, for example, know that the subscriber has been expressing interest in a flat screen TV via his social networks.  The electronics retailer could then offer targeted discounts directly to the subscriber, either via his social channels or — using geolocation services — they could text an offer or coupon directly to the subscriber’s mobile phone when he is in the vicinity of the electronics retail store.

In this new landscape the carrier oftentimes isn’t a communications channel anymore, so much as an information broker, a content distributor. The telcos are tapping their treasure trove of data and morphing into whole new industry areas. They’re definitely not your mother’s telephone company anymore.