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Tech Trends Give CSPs Potential Growth Opportunities

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Monte HongBy Monte Hong

“Never make predictions, especially about the future." So said Casey Stengel, a New York Yankees manager and renowned baseball player; however, that sage advice hasn’t stopped many from contemplating what’s next on the horizon.

In particular, business leaders in the communications industry probably wish they had a crystal ball. Who could predict that providers would weather a global economic crisis, only to face new challenges? Those new challenges now transcend the more obvious ones – such as mobility – and strike at the heart of their organizations’ ability to recognize and quickly exploit opportunities and drive growth by hitching their star to some of the more promising technology trends.

As it stands now, many of the challenges communications providers faced in 2012 will continue into this year. For example, it is anticipated that average revenue per user will continue to decline, with nontraditional competitors on the rise. Inexpensive or even free text messaging, and low-cost voice/data bundles are still popular with consumers, and the proliferation of all sorts of devices – from phones, to gaming consoles, to health monitors – will continue to tax providers’ network capacity and management of existing capacity. In fact, Mobile Web Watch 2012 research shows that mobile devices are becoming the primary medium for accessing the Internet – and its related services – across all age groups, in both mature and emerging markets.

Simultaneously, providers’ enterprise customers are still switching to communications that shift traditional voice traffic to data networks, and adopting fixed mobile convergence technologies to create a seamless mobile experience. Some providers are responding with machine-to-machine communications, such as in-vehicle connectivity, or telematics, to generate new revenue. In fact, in 2012, U.S. wireless operators inked major deals with automotive giants that can potentially reach into other verticals, such as health, asset tracking and home automation. Other industries – retail and health care – are poised to network their products in vast ways over the next decade.

Tech Trends That Are Here to Stay

There are some key “game changing" technology trends that are poised to impact the communications industry – context-based services, big data, social media, hosted services, and security – that will impact the industry over the next three to four years. As a result, providers should:

Keep an eye on context-based services. Imagine this scenario: A provider identifies roaming subscribers, and offers them special promotions on travel, accommodations, and other helpful services in the city where they’ve just arrived. To be players in this arena, providers should gather and use specific contextual information – shopping environment, location, social context, usage patterns, shopping preferences – and embrace new sources such as geographical location, time of day, and information from social platforms, while balancing convenience with privacy laws and customers’ privacy expectations.

Embrace and manage big data. As customers interact via voice, email, instant messaging and social platforms, and new devices proliferate, data demands continue to grow. Providers already have started to harmonize network operations across technology and service functions. For example, for a “triple play" customer with voice, video and data service, the rating portion of the billing application needs different rules to combine different data types to properly bill subscribers. Kenya’s Safaricom’s mobile banking operation, M-Pesa, integrates services such as remote money transfer, cash deposits and withdrawals, and billing services for utilities. Clearly, “industrialized" data management will be required, and data governance teams will be needed to sort out the data sprawl, create new architectures, data policies, interfaces, validation and management.

Use social media to connect with customers. Social platforms are driving consumers to websites where they expect 24/7 access to information and community. Monetizing social media may be in its early stages, but providers should look to offer a broader range of services on social platforms, including grievance management, service status, self-guided help, or customer feedbacks, using social media to promote new services and build brand strength.

Be a good host. “Platform as a service" (PaaS), commonly called hosted communications, will continue to expand, giving providers a much-needed opportunity to shift the emphasis from cost-cutting to business innovation. For example, some providers are offering M2M capabilities to help companies manage their infrastructure from a hosted environment. One European provider enables businesses to monitor, track, and manage their enterprise devices in 50 countries. 

Orchestrate security resources, responses. As providers expand their relationships with content providers and partners, they face potential security threats that range from identity theft to SMS message hijacking. Adopting data-platform approaches and orchestration that involves gathering the right resources – and quickly – when they’re needed will be paramount to preventing and addressing security issues.

Some Final Thoughts

Providers and their CIOs should already be internalizing key technology trends such as these so they can start framing discussions about the technologies and – more importantly – the impact they’ll have on the business and the new initiatives they can drive.

Monte Hong leads Accenture’s global Communications industry practice within Accenture’s Communications, Media & Technology (CMT) operating group. In this role, he oversees the development of Accenture’s strategies and capabilities for serving the wireline, wireless and cable segments, including most of the world’s largest service providers.

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