Thursday April 30,2015
Sundar Balasubramanian VP Products
The promise of telco data beyond traditional customer base management use cases has remained largely in fiction. Until now. Faced with declining revenues and increased churn across both developed and developing markets, mobile operators are turning to their customer data for new sources of revenue and cost reduction. In this blog, we summarise the various opportunities we are either working on or foresee in the near-term horizon.
We will look at it from the prism of the parties who benefit from the telco data. These range from vendors of Value Added Services (VAS), advertisers, and let's not forget, telcos.
VAS: A recurring problem for many subscribers at some stage of their lifecycle is lack of credit when it is time for renewing their VAS subscriptions. Having worked hard to acquire customers to a VAS product, a telco could lose them when it's time for renewal.
Typical strategy to handle this has been to allow a grace period pre-determined for each the product. This one-size-fits-all approach misses a trick. Based on historical behaviour and predicted propensity to recharge, telcos can offer personalised grace periods. Provide customers who have higher credit worthiness with longer grace periods and they will reward you with their loyalty.
Advertisers: Much of mobile advertising today happens based on a limited set of targeting variables such as handset type or OS. Telcos in most geographies have credible information about the explicit demographic profile of their customers and, with some additional work, implicit behavioural information such as interests and brand preferences. This is gold mine for an advertiser.
We can put this information to good use in two ways for advertisers as part of their acquisition campaigns. Advertisers could anonymously push their promotions to a well-defined target in the operator's customer base with the aim of converting the impressions to visits to the advertiser's site or app. We can also plug such anonymised audience clusters into a mobile advertising network to enrich ad requests in real-time for targeted advertising in exchange for a higher CPM.
Telco: Many of the use cases listed above can be flipped around and applied by a telco for several revenue generation or cost reduction opportunities. Similar to personalised grace periods, operators can use recharge propensity to offer advance credit or airtime to select customers. Over time, customers enhance their credit worthiness by repaying the credit over successive recharges. This turns into an incentive to stay with an operator. Further, operators looking to reduce their offline distribution costs could incentivise customers to recharge online by offering instant credit exclusively online.
With telcos turning into quasi or full-fledged banks, data they hold on credit worthiness becomes even more critical. Customers leave behavioural fingerprints over a period of time. These include recharge frequency, typical balance at the time of recharge or subscription renewals, number of called and calling parties, calling patterns, browsing history, and the list goes on. Many of these signals can be telling in terms of a customer's credit worthiness.
Telcos can use credit scores for handset leases or subsidies, microloans into a telco money or wallet account, and traditional financial products.
Coming back to why these opportunities have not progressed as fast as one would have hoped, there are two key barriers:
1. Privacy: Most of these use cases expose operator data outside of their network. In some cases, operators will be sharing information about an individual customer with a third party. In other cases, data is anonymised such that the third party is never in possession of Personally Identifiable Information (PII). Either way, this will require explicit consent from the customer either to the telco or the third party. Regulation across various geographies is unclear which has forced telcos to take it one step at a time and push the boundaries gradually.
From our experience, customers are more willing to consent to let you share their data with third parties if you are transparent with customers how their data will be used and what they can gain in return – what we call the “Value Exchange”.
2. Technology: Processing large volumes of telco data requires technology that can scale and flexibly support new use cases over time. This is now feasible with "schema on read" databases and Big Data technologies that support different types of data sources and real-time or near real-time updates to analytical models.
As these two barriers are being lowered, we are witnessing emerging opportunities. They are not limited to the use cases we have touched upon in this blog. Our work with operators around the world and key players in the advertising and other ecosystems such as eCommerce indicates there is more where this came from.
Telco data monetisation is finally moving out of the realm of fiction.Share this