Analytics is the answer for telcos - but what is the question?

25 Jun 2015

There are many problems that face telecoms operators today – network congestion, investment challenges, dissatisfied customers. But probably the one that keeps CEOs awake at night is churn.

Churn is proof positive that if customers think that the service they receive is bad enough, or they can get a “better” deal elsewhere, they are willing to jump ship. The churn rate in the US telecom industry was 1.28% to 2.19% in the third quarter 2014, according to Statista. That may not sound like a problem but take a carrier with 40 million customers and – well, you get the point.

To counter this challenge, operators have tried many approaches over the years. Bundling products and services certainly helps; solving customer queries and complaints right the first time works; even screwing up, solving the problem, apologizing and being human works better than it should. Having a network that does what the operator says it can do should be a given. But putting pushy salesmen into customer service “save teams” and trying to sell deserting customers back into your world is probably the most offensive and least effective way of operating.

Now, though, after many, many presentations, conferences, papers, articles and discussions, it seems that analytics also works – in the real world. Vodafone, the giant that posted revenues of around £40 billion ($63.2 billion) last year, claims it boosted its revenues by between 1-2%, “thanks to real-time anticipatory selling propelled by big data analytics.”

Although it is not clear just how much of their customer base they are addressing with analytics, it seems they are definitely using the technique to offer prepaid customers conducive deals when their balance drops below a certain point.

This ties in with a survey conducted by the TM Forum last year that showed that the emphasis for real time functionality today is to help customers avoid bill shock, through balance management services. The survey also showed that in two years’ time the emphasis will shift to supporting OTT collaboration, dynamic pricing and innovations in areas such as zero rating certain apps.


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