The digital economy and the digital native are making it imperative for Communication Service Providers (CSPs) to rethink their role. All that the customer of today cares about is a seamless, digital experience with no delays at any touch point of the journey. The choice is not about being digital first, but about being solely digital.
As CSPs gear up to combine speed of delivery with adoption of cellular technology to remain relevant, their key goal over the next few years will be to reduce dependency on voice and on plain vanilla data connectivity/ messaging for revenues. Voice and messaging, core to a CSP up until now, are being squeezed out by innovative native digital services providers like WhatsApp, Skype, Viber, WeChat and Telegram.
Voice and messaging revenues are expected to fall by around 50% by 2025. Digital services are going to be the new growth engine. Analysts support this forecast. According to a leading analyst, digital services revenues are expected to grow from the current about 5% to over 40% in the near-term. It is unlikely that CSPs would want to be caught unawares by the implication of these trends.
Tuning in to new service expectations
While many operators have started planning to meet the challenges of the digital economy, there are some key issues to be managed in the near term.
CSPs would want to first identify the services that customers find valuable and are willing to pay for. This means understanding customer expectations, which can be broken into two categories. First, technology with a simple interface; and second, a smooth, seamless experience across channels (see Figure 1: Digital Customer Expectations).
A customer, for instance, may want a bright, real-life experience on their screen. For a telepresence application, this would mean images that are flicker free. The multiple components from different providers that make up the service would have to be seamlessly connected. And the service would have to be so simple as to make a user manual redundant. Customers also expect the interaction to be in self-help mode, based on an understanding of each of their preferences and privacy requirements.
Achieving these customer-focused goals is possible when the CSP completes the transformation to a full stack digital telco by broadly addressing three layers:
- Connectivity: It must quickly shift to LTE, 4G, FTTx and be prepared for tomorrow’s ultra-high-speed 5G. Costs must be minimized and operations run like a factory based on lean processes
- Service Enablement: A robust framework that makes services scalable and efficient while ensuring the organization remains agile forms the critical middle layer
- Digital Service Portfolio: Customization and differentiation in the front with services around communication and collaboration, M2M and IoT applications, security, Cloud, entertainment and educational content, mobile finance and healthcare applications, Big Data/ Analytics and Enterprise Mobility Management are some of the indicative areas for CSPs to focus their attention on.
In essence, a CSP will have to adapt to a multi-speed model where the front is agile and responsive as it delivers ever-changing and highly customized services while the back is efficient and robust.
Other than keeping a finger on the pulse of the customer, CSPs need to focus on some key areas. These are communication and collaboration services such as video conferencing, unified communications; Machine2Machine/IoT communication including home automation, connected cars; security services; entertainment, news and educational content for consumers who want movies or audio books; mobile finance applications and services; Big Data and Analytics to create targeted advertising and contextual engagement; Cloud and Hosting services for small and medium businesses; and Enterprise Mobility Management.
Donning the hat of a DSP
To become a Digital Service Provider (DSP), CSPs have to start from the customer experience management and move downwards to the network and compute infrastructure. The customer experience becomes the reference for all the lifecycle stages of the customer (discovery, buying, provisioning, paying, changing etc.) across channels such as Web, mobile app, store or contact center. That’s why many Mobile Virtual Network Operators and native digital players have ensured that they focus and differentiate in the customer experience layer.
Underneath this, the DSP will need to maintain connectivity services with digital services such as IoT, vertical applications, collaboration, security, hosting, mobile banking, healthcare, education, smart home, smart enterprises etc. This is done along with APIs that enable products and services to be consumed by the customers. Since many of these services will be offered in collaboration with partners, it is important that a robust digital market place and a partner management system exist.
To create a smooth transition to a DSP, CTOs and CIOs must, therefore, shop for a competent technology provider – one with proven domain and customer-first design capabilities.
‘Cause’ and effect
There is no silver bullet for the transformation to a digital service provider. Over several engagements with CSPs, we have developed a calibrated approach to enable the transformation from a CSP to a DSP. We call this the CAUSE (collaborative, adaptive, ubiquitous, spontaneous and elastic) framework. The framework keeps the CSP to DSP transformation customer focused and relevant.
Typically, a DSP may not be able to predict every service that will become necessary in the future. The DSP must, therefore, aim to be collaborative, putting in place platforms that seamlessly integrate partners and communities, creating the ability to launch any service at any time.
The time to market becomes a critical factor for success. Therefore, DSPs have to be adaptive and use a high level of automation for service creation and management.
The secondary challenge that DSPs face is being ubiquitous. Their services must be accessible to every customer from anywhere, at any time and over any device (tablet, smartphone, laptop, desktop, wearable). By implication, a DSP must aim for an omni-channel experience based on customer preference.
As customers gain access to services across a growing number of channels, the DSP will need to focus on becoming spontaneous. In other words, analytics-driven real-time decision making will determine reaction and response to customer needs. The implication of this is in terms of the DSP being forced to embrace Next Generation Operations and Business Support Systems (OSS/ BSS) to meet the demands of its customers. For example, customers will not be willing to wait for a billing cycle to end before being presented their bill. They will want to check their account independently, any time. They may even want metering and billing information posted to them directly and immediately after select types of service consumption — for example, after watching a live sport event or participating in a content-rich webinar.
With the long tail of services the network is required to support, concerns will center on how the network performs. An elastic infrastructure is mandatory to provide on-demand scalability and cost efficiency for the long tail.
The need to go digital and recast businesses around services is urgent. Much depends on the technology partner to bring in the troops and fight the battle all the way to victory.