“The actions taken by the telecom industry have mostly been around cost cutting, both in terms of opex and capex, and that has not resulted in breaking the curve. Too few activities has been centered around revenue growth, such as focused activities in personalization, customer experience, segmentation, targeted offerings that become part of or drive ecosystems. These activities are essential if you want to break the curve; thus, it is time to gear up for growth… I am very surprised that very few, if any, service providers today collect and analyze data, create dynamic targeted offerings based on real-time insights, and do that per segment or individual.”
Lars Sandstrom, here.
I have two completely opposite and conflicting perspectives on the pervading wisdom of personalised services (including segmentation of one and targeted offerings) in the telecoms industry.
Telcos tend to be large organisations. If I invest in a large organisation it’s because the business model is simple, repeatable and has a moat (as Warren Buffett likes to say). Personalisation is contra to two of those three mantras – personalisation makes our OSS/BSS far more complicated and hence less repeatable (unless we build in lots of automations, which BTW, are inherently more complex).
I’m more interested in reliable and enduring profitability than just revenue growth (not that I’m discounting the search for revenue growth of course). The complexity of personalisation leads to significant increases in systems costs. As such, you’d want to be really sure that personalisation is going to give an even larger up-tick in revenues (ie ROI). Seems like a big gamble to me.
For my traditional telco services, I don’t want personalised, dynamic offers that I have to evaluate and make decisions on regularly. I want set and forget (mostly). It’s a bit like my electricity – I don’t want to constantly choose between green electricity, blue electricity, red electricity – I just want my appliances to work when I turn on the switch and not have bill shock at the end of the month / quarter. In telco, it’s not just green / blue / red. We seem to want to create the millions of shades of the rainbow, which is a nightmare for OSS/BSS implementers.
I can see the argument however for personalisation in what I’ll call the over-the-top services (let’s include content and apps as well). Telcos tend to be much better suited to building the platforms that support the whole long tail than selecting individual winners (except perhaps supply of popular content like sport broadcasts, etc).
So, if I’m looking for a cool, challenging project or to sell some products or services (you’ll notice that the quote above is on a supplier’s blog BTW), then I’ll definitely recommend personalisation. But if I want my telco customers to be reliably profitable…
Am I taking a short-term view on this? Is personalisation going to be expected by all end-users in future, leaving providers with no choice but to go down this path??