Mapping out a data monetization strategy beyond connectivity

Sponsored by: Comviva

In this session with TM Forum’s Chief Analyst Mark Newman, Mao Mohapatra, Chief Executive Officer, Comviva explains how communication service providers (CSPs) can leverage their data and build new revenue streams in the business-to-business market.

What do you see as some of the key trends in terms of the services that mobile users are consuming? Well, we can see that data consumption is still increasing massively. In India it has grown more than fourfold. Usage is now more than 10GB per user per month, and I could easily see it increasing to 1GB per day. There is a huge amount of innovation in new services, choices are growing exponentially but there is a limit to how much content anyone can consume. What you really want, to stop your life becoming miserable, is a more efficient way to navigate and to get access to the most relevant content. I was speaking to an operator in South East Asia recently which had divided its customer base into 1500 different segments to try and provide them all with the most relevant services. This kind of customer segmentation is not ultimately sustainable to continue manually; it has to be intuitive and systems driven. Artificial intelligence (AI) and machine learning (ML) will play a huge role in this, allowing communication service providers (CSPs) to segment markets, segment data, and allowing consumers to narrow down the choices that they have to make in the shortest amount of time. It’s all about customer experience and ease of use. And from a telecoms operator perspective, do you still see most growth potential in the consumer market? No, I don’t think so. Consumer average revenue per user (ARPU) is falling and most CSPs are now starting to look at the enterprise market for future growth. But these business-to-business (B2B) opportunities involve using consumer market data. We see big potential for them to monetize their consumer data in the B2B market. In the model that I am talking about, we, Comviva become a customer of the telecom company. We buy customer data from them and we add value to it through the use of AI and machine learning. From this data we know consumers’ working habits, when they get to the office, when they return home, what devices they are using and which channels they are using. This data has huge value to banks, for example, who will pay us for it. We then do a revenue share with the operator. This is a service that we started trialling two years ago but only in the last six months have we made real progress. But data confidentiality plays a crucial role and we must respect the necessary compliance rules. Presumably this business model means you are changing who you sell to within the telecom company and build up new relationships with enterprises that want to buy this data? Yes, that’s right. We have had to transition from selling to the technology function within the CSP to working with the enterprise line of business. We have shifted from partnering with the chief technology officer (CTO) to working with the chief marketing officer (CMO). When it comes to selling this data to enterprises, we tend to work with aggregators because this allows us to reach more potential customers than if we approached them directly. And how quickly do you see this business growing? That’s a really difficult question. Uber took three years to reach 100,000 taxis. But the next phase in their growth took them from 100,000 to three million. In practice, we are finding that we need a large amount of regional customization for this new business opportunity. As such, we are only targeting a few select countries. Our focus is on large markets such as Bangladesh which has 170 million people, Indonesia with 240 million and Egypt with 120 million. This is also a function of regulation. India, for example is very heavily regulated when it comes to the use of consumer data so it would be a difficult market for us. What other opportunities do you see for CSPs in new markets, particularly the B2B market? I see potential for collaboration more broadly between telecoms operators and the digital ecosystem. Applications providers depend on telecom companies for delivering services beyond their mobile networks but operators still have a vital role billing customers, collecting their money, and, with half the world unbanked, providing them with mobile payments services. They have also invested hugely in customer care, customer acquisition, billing and collections. Not every application vendor can build these capabilities and I see huge potential for a marriage between the two with CSPs making some of their core capabilities available to application providers.