Leveraging Outsourcing for Building New Revenue Streams
We see tomorrow’s telecom players building businesses around not just media and app development (which are the obvious areas to explore), but moving into industries such as energy and utilities, healthcare and insurance.
AT&T is an example of a telecom company forging ahead with such plans. AT&T has begun to expand into the machine-to-machine space within all major industriesii. The AT&T of tomorrow could, potentially, be well-positioned to deliver support for connected devices at home. It could develop apps that monitor appliances and systems. It could charge for app downloads and substantially augmenting its revenue stream. At some point the apps and services could contribute more to the business than its voice and data services currently do.
It is apparent that telecom companies need to move into new cross-vertical spaces (e.g.: health monitoring devices and telecom), they need to be at the intersection of technologies (e.g.: cloud and mobile) and they need to be at the point where convergence is taking place (e.g.: media and telecom).
Telecom companies must think hard about how they can leverage the growing power of not just their own networks but of smartphones as well. Can they become health monitors or 24X7 banking kiosks or assist automobile drivers in improving their driving efficiency, lowering fuel bills and reducing vehicle wear and tear? These are not traditional areas for telecom players. But these are services that leverage their infrastructure – and consumers are willing to pay for them.
Telecom companies don’t have too much time to debate their next move. Every day, a new WhatsApp or a WeChat arrives on the horizon, clouding the future. Besides, costs are increasing with investments in enhanced network technologies such as 4G / LTE. Unfortunately, customers are reluctant to pay a premium for these technologies. This means the likelihood of a proportional increase in revenue from network upgrades is slim.
In addition to the cost of networks is the issue of customer retention. The churn in the telecom business is a cause for concern. Telecom executives are distressed that they are unable to come up with a reliable solution to eroding customer loyalty. The answer lies buried across customer contact channels. An analytics driven Omni-Channel Customer Service platform will dig into customer interactions and immediately throw up ways to reduce complaints and improve retention.
Actionable analytics integrated deeply in to the product platform is the key to offering more value. Creating innovative services and products and optimizing costs via experienced outsourcing partners is the solution.
Looking into the Future
Telecom companies are facing a number of challenges. Technology is evolving rapidly, perhaps too quickly to be able to make accurate and reliable decisions. Customer expectations are changing and today’s customers have more choices than before, resulting in unprecedented churn. And finally, new players are challenging the traditional business of telecom players, dividing the revenue pie as well as affecting customer loyalty. These trends appear detrimental to the telecom business. However, hidden amidst the challenges are very real opportunities to improve revenue streams, and deliver greater value to customers, thereby mitigating business risk. Addressing these challenges and opportunities is not without cost. However, smarter businesses have also stumbled across effective outsourcing practices that let them grow without affecting current business.
- BT continues to challenge BSkyB for sports rights by acquiring ESPN channels, February 25, 2013: http://www.independent.co.uk/sport/football/news-and-comment/bt-continues-to-challenge-bskyb-for-sports-rights-by-acquiring-espn-channels-8510622.html
- Wipro is the global technology partner for AT&T’s M2M development services and systems integration
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