As somebody who read history at university before venturing into telecoms, I can’t help but get excited by the “Fourth Industrial Revolution” and looking at the opportunities and challenges for telcos. Klaus Schwab the Founder and Executive Chairman of the World Economic Forum has written and spoken extensively on the topic and states that “it can be characterized by a fusion of technologies that is blurring the lines between the physical, digital and biological spheres”.
The First Industrial Revolution was characterized by the use of steam and water and mechanical production which created rapid urbanization. The second was driven by the use of electricity to mass produce things. The third was powered by computers and the advancements of IT and technology and the use of automation production.
The Fourth Industrial Revolution thus builds on the latter and will be driven by the Internet of Everything (IoE) and artificial intelligence (AI). It of course relies on connectivity and billions of devices and people being connected.
Creation and customer focus
We all know that service providers need to digitally transform to be able to offer the next generation of services for their customers, and in the back end, have efficient, automated networks allowing multiple partners and players to come together to create platform-based business models and services.
Ericsson and Arthur D. Little estimate that the 5G ecosystem represents a $582 billion opportunity for CSPs whilst the World Economic Forum states that the telecom industry has the potential to make an additional $1.2 trillion in revenue from the opportunities enabled by digitization.
Exactly what new services will drive this revenue and by how much, is still very much open to interpretation and it will no doubt be a mix of products and services such as healthcare, content and media, autonomous vehicles, smart homes etc.
The majority of these new services require partnerships and will be based on a platform business model where the customer is not aware of who is providing which part of the service and to be quite frankly honest, wont care. All as they will care about is the customer experience and the end-to-end delivery of their service that they have paid for. This is where the opportunity for the telco comes and we need to think beyond data!
It’s not ALL about the data
Whilst there is currently a lot of hype around data and it is currently maintaining and/or driving operator revenues in lieu of declining voice, SMS and roaming revenues, it will soon follow the same suit and become nothing more than a commodity just as electricity.
Whilst there will undoubtedly be different charging methods, one thing is for sure, data will continue to become cheaper and we will need to use more of it, as everything that can be, will be connected. If telcos don’t want to become a commodity of the Fourth Industrial Revolution such as electricity companies became of the second, they must carve out for themselves a special role that they only can uniquely fill, and that is in the role of the customer experience.
Telcos can, in the digital economy, uniquely place themselves at the heart of the Fourth Industrial Revolution by owning the customer and by delivering a truly personalizsed and unique customer experience. As stated earlier, customers don’t and wont care about the complexities of delivering end to end services and over who delivers what part. What they will care about is having an integrated customer experience and ultimately one provider who not only provides all their connectivity but also their services.
Operators could thus be synonymous with delivering digital services and use the customer experience as a key differentiator. Revenue would be generated not only by data consumption but through service revenue sharing and upselling. Customer experience is no longer just about retention and reducing churn, it is about ensuring telcos stay relevant and are at the heart of digital service delivery and the digital economy. What will really matter to operators in the future is owning the customer relationship and providing personalized digital services.