Goodbye telcos, hello IDSPs

Tore Berg/Accenture
09 Dec 2014

Ten years ago, Facebook was just getting started. Eight years ago, Twitter and Instagram didn’t exist. Five years ago, tablets were a remedy for headaches - not a means of accessing a universe of data.

It’s clear that digital technologies have taken over the world with explosive force. For communication service providers (CSPs), today’s digital world presents an opportunity to shift from disrupted to disrupter. CSPs now have a continuously growing amount of data that holds a wealth of information. With analytics, CSPs can utilize this information to drive better service and new businesses. In 2015, CSPs will challenge themselves to get out in front of the competition by leveraging big data, transforming their operations and producing new solutions as integrated digital service providers (IDSPs).

An IDSP creates digital services for consumers while also enabling third party digital services. Becoming an IDSP will enable operators to offer a new set of services and solutions. For example, AT&T is entering the home security market with its Digital Life service, allowing customers to remotely control everything in the home, from alarms to lights to door locks. For CSPs around the world, including Asia-Pacific, this ability to provide new services and enter new markets will be increasingly important as they face new competition and high customer expectations.

New competition will come from the technology giants of 2014, who will continue evolving into vertically-integrated super platforms encompassing CSP-agnostic devices, communication and entertainment services, direct-to-consumer channels, and extensible cloud platforms that support rapid innovation. This evolution will have a profound effect on CSPs, especially in mature markets, cannibalizing paid services and setting new expectations for pricing, user experience and customer support.

High customer expectations will come from a group of digital consumers who demand the best experience at the best price, anywhere, anytime. Telecommunications service providers in Asia-Pacific have enjoyed astounding growth rates of mobile devices and subscribers over the past few years, fuelled by economic growth and an expanding middle class population. In order to meet new expectations from the growing number of subscribers, CSPs will increasingly be expected to provide services designed "from the ground up" in order to support multiple devices and adjacent businesses. They will also face the challenge of optimizing the experience across networks, reducing complexity and cost for the customer.

Furthermore, CSPs have a data deluge. They have an endless amount of customer data, including internet usage, addresses, applications downloaded and personal information - such as how long it takes someone to commute to work each morning. As analytics engines and the use of data become more clear and effective, there is a growing need for CSPs to use big data for personalization and expanded services. For example, new business models such as mobile health and mobile advertising depend on big data to unleash their full economic potential. Additionally, retaining customer relevance will depend on an operator’s ability to use data to identify users and provide tailored services based on the user’s profile.

To combat these challenges, CSPs in 2015 will leverage their cross-platform, cross-device and cross-service involvement to transform themselves into IDSPs. To tackle big data, CSPs will also increasingly affordable solutions for processing, analyzing and monetizing data in real-time. For CSPs in Asia’s developed telecommunications market, successfully transforming into IDSPs in 2015 holds the promise of a new growth trajectory and earnings more typical of information services companies. For CSPs in Asia’s growth markets, success may mean the difference between creating a viable business case for next-generation network deployments, or falling into irrelevance before the onslaught of innovative disruptors.

Tore Berg, managing director and management consulting lead, Communications, Media & Technology operating group, ASEAN, Accenture

Seven incentives to change your game:

1. Fiddling over net neutrality while business models burn

2. Goodbye telcos, hello IDSPs

3. Cellcos remain their own worst enemy

4. Mobile Money Part 1: Apple Pay will break payments gridlock

5. Mobile Money Part 2: Wireless/digital finance earns additional interest

6. Plenty of room in 2015 unified comms market

7. Getting to grips with the IoT value chain

More coverage of 2015 predictions

This article first appeared on Telecom Asia Vision 2015 Supplement December 2014 edition

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