Let us hope that Moody’s credit agency has factored in the AsiaInfo survey insights. The agency recently announced that telecoms revenues are stable, will grow at between one and two percent and the light at the end of the tunnel may not be an oncoming train.
They seem to base the upgrade on the increased use of traffic data. Whether they have thought through the challenges for operators in using customer data, time will tell.
The AsiaInfo survey, conducted over the summer, brought to light several issues that are currently being discussed in the industry. But this puts a harder focus on some of the challenges.
Foremost among them is how far behind operators believe themselves to be when compared to the Large Internet Players (LIPs). The consensus is that they are two years behind, and probably more if you consider that the LIPs are not going to stand still while operators catch up.
The biggest barrier to them catching up, in their view, is regulation. Clearly this is just one issue, the other obvious one being the legacy that operators are carrying. These together present a daunting task, given that – for the moment – LIPs are not hamstrung by a raft of rules. And the regulator, even after hearing pleas from operators, is not about to lighten his position. Vice President for the Digital Single Market, Andrus Ansip has made his position clear, when he said that “relaxing competition rules is not the answer and industry consolidation is not necessarily the answer either.” Without economies of scale and no let up in regulatory restrictions, it seems the only thing to do is innovate, somehow.
And catch up or carve out a value added niche they must do. LIPs run businesses based exclusively on digital assets – data. Now operators must do the same. And they can. And the LIPs know it. As one LIP interviewed in the survey says, “operators have the potential to do what we do. Although there are some legal and technical challenges, the largest constraint is the current mindset.”
Along with the challenges of sharing customer data better, across the still standing silos, there is indeed a cultural problem. The culture within operators, particularly large ones is to look after the network, protect (and sweat) assets and not to take unnecessary risks.
For this fundamental reason, persuading teams within operators to use customer data, particularly traffic data, will be difficult. New services and exciting products need to go through hoops. Operators have ethics committees (not to mention ‘innovation committees) and what the LIPs might launch without question, would be stopped by an ethics committee. LIPs have a ‘launch and test’ mindset, operators do not, and anything that comes anywhere the area of ‘spooky’ marketing – of seeming to know too much about the customer – will not be allowed.
Sadly, the Moody’s report will not help the cause of those of us in the industry who can see that operators will struggle. Instead of adding another voice to the few that are saying they should take risks, be far more proactive with customer data and the customer experience, this will sit on the other side of the fulcrum. It will encourage risk averse thinking among operators.
Yet, maybe, just maybe, the reverse is true. Maybe Moody’s has actually considered, reviewed and deeply thought through the challenge for operators, the partnerships they must make and the massive changes they require. And concluded that they are up to the task. Let us hope so.
Guest Blogger: Alex Leslie