Who can consumers really trust with their data?

Colm Mulholland/Openet
28 Jan 2019

Over the past decade in Asia Pacific, attention has turned to digital companies like Facebook on a global level, HOOQ on a regional level, and Malaysian player iflix on a national level as the ‘darlings’ of contextual marketing. And it’s no wonder why. These companies understand that to keep their audiences engaged, they must offer something that users find worthy of their time and money.

Asia Pacific is leading the way in changing consumer behaviour, especially when it comes to mobile. Smartphone penetration is at one of the highest levels in the world, and with so much choice consumers have been found to reward brands that meet them in their moments of need.

In such as competitive market, it is clear to see why OTTs take a data-first approach: continuously delivering personalized digital experiences and services based on user behaviours and patterns. And consumers have, largely, been satisfied with this approach – until recently.

The unfolding Facebook/Cambridge Analytica scandal took a surprising toll on consumer trust around the globe earlier this year, and thrust digital companies and their use of personal data firmly into the limelight. This has had lasting effects on trust in OTT players and digital services in Asia and around the world, as we found in a study with Sapio Research, “Who do Consumers Trust Most – Mobile Operators or OTTs”.

Sapio surveyed 1500 consumers in Brazil, the Philippines, UK and the US on their views on trust of mobile operators and digital service companies. From the number of survey respondents who indicated that they had deleted social media accounts in protest following the scandal, we estimate the incident caused more than 640k accounts to be deleted in the Philippines alone. Rather than happily using freemium services in return for data, we also found that 82% consumers in the Philippines would now prefer to pay for digital services if it meant that they had better control over their data.

With consumer trust so damaged in Asia Pacific, the question is, who can they really trust to protect their digital data?

Trust me, I am an operator

As it turns out, for over half of consumers in the Philippines trust in mobile operators now triumphs the once darlings of the industry. In fact, almost two thirds (69%) of Asian consumers trust their operators more than the Facebooks and iFlix’s of the world. A large factor for this trust is down to the fact that operators have always historically protected their customers’ data.

This could be a real turning point for mobile operators, who over the past decade have endured a rocky relationship with their subscribers. Across major Southeast Asian markets, the average revenue per user has been stagnant or falling since 2006 with operators struggling to attract and maintain customers with increasingly competitive offerings.

Operators have traditionally protected subscriber data, while also collecting vast amounts of information – safely guarded - to understand the behaviors of each individual customer. Whether that be the amount of calls and texts they send, or even what TV series they stream from their device while they are on the move, it is all collected in the name of improving their customer experience.

Now if we look back at the relationship between OTTs and their customers, while they have offered innovative digital experiences to their users, it has often come at the cost of the individual’s data privacy. In fact, 86% surveyed now believe that making revenue by selling personal data to third parties is unacceptable – quite a change for a business model that has been relatively accepted in recent years.

This faltering consumer trust has created a window of opportunity for mobile operators around Asia, as a direct result of their traditional role as the gatekeeper to their customer’s data – all the while OTTs have been intent on its monetization.

So you have their trust – now what?

What has been seen as a tortoise and a hare race, is starting to pay off for the underdog. This new-found trust has kept the operators in the race and over time, has led them to this new position that will, ultimately, provide an opportunity to prosper.

But while looking to emulate some aspects of OTTs – such as speed and agility - they must also ensure that data transparency remains a top priority. The trick is to not only strive to meet the demands of consumers for digital services, but also learn from the mistakes of social media and digital service giants alike.

Yet it is clear to see that operators cannot simply create new services at the rapid speed like some OTTs. They are burdened by expensive infrastructure, legacy technology and rigid business models. Therefore, if operators are to evolve to capitalize on these new opportunities, they need to take a fresh look at business support systems (BSS).

First, they need to begin to think about Digital Business Platforms rather than ‘old fashioned’ BSS stack. To do this, they must first evaluate their commercial and delivery models in order to meet the growing needs of their customers’ as they move to digital.

To meet these demands, operators need new commercial and delivery models that can respond quickly to short-term goals and initiatives and adopt the same level of flexibility as used by their competition. With this in mind, by moving platform-based systems, operators can challenge – the once untouchable - OTTs and adopt a “digital first, customer first” approach.

Instead of betting everything on high-priced, big risk transformation projects, there are more pragmatic ways to go about a BSS refresh. In fact, setting up a separate digital BSS platform can allow operators to launch new services in as little as 14 weeks while still allowing for long-term transformation projects to continue in parallel. By harnessing a modular, API-driven approach, operators will boost their service delivery and begin to match the agility of large webscale companies like HOOQ and iFlix.

There is no time like the present

It’s pretty straight forward. Success will come to the operators who build on their customers’ expectations to provide a range of new digital services. In the past, operators have traditionally been cautious to change their ‘old fashioned’ ways of operating, but in order to capitalize on new opportunities and new revenue streams – change is vital.

Nevertheless, operators must keep the protection of individuals’ personal data as a top priority. And for this, if they want to continue to triumph, the right digital BSS stack is essential.

With trust slowly fading away from OTTs and the move towards data transparency, there is no time like the present for operators to consider new approaches to their traditional business, commercial and delivery models.

Colm Mulholland is vice president of solution consulting APAC at Openet

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