Opinion: It’s sink or swim for CSPs and AI-driven personalisation is the lifeboat

By Dan Faulkner, SVP, Communications Service Provider Business at Nuance Communications

The telecoms industry is going through its greatest disruption since the introduction of the mobile phone.

Communication Service Providers (CSPs) traditional revenue streams are in decline, and an increasingly stagnant regulatory environment threatens the market’s innovation.

With global digital platforms – including Google, Apple, Facebook, and Amazon (GAFA) – now also entering the telecoms market with their innovative business models, unrivalled brand recognition and extensive customer base, CSPs need to react or face being displaced.

By monetising customer data and selling advertising space, GAFA are able to provide many services for free.

It’s certainly tough to compete with free, but there is still an opportunity for agile, innovative CSPs to stay competitive.

The smart home market

The Internet of Things (IoT) is rapidly changing the connected ecosystem.

By 2021, Ovum predicts that smart home households will grow more than fivefold from 90 million in 2016 to 463 million – incorporating a vast range of connected devices, from smart meters, connected-lighting, smart appliances and more.

The market of this new ecosystem is up for grabs – Google Home, Amazon Echo, and Samsung Smarthings are all racing to become an indispensable part of your home.

And while certainly, these providers have the brand reputation, and product and technology capabilities to carry themselves into many living rooms, we believe that CSPs has the potential to become the front and centre of the connected home ecosystem.

CSPs are in an unrivalled position to provide network connection services to the smart home connected devices.

This will give them the unique advantage to provide content and other services directly to the smart home end customers.

Utilising the IoT, CSPs must first defend their core service business, which is a network service provider, then solve customers’ connectivity and security issues and then upsell them through AI driven technologies as this market is still new for both customers and CSPs

Right place at the right time

With the rise in the number of devices that individuals own, organisations sell to the masses across an ever-expanding number of channels.

However, en-mass doesn’t necessarily means more sales – instead, customers are increasingly looking to a more personalised service or product offering.    

Research from Marketo found that more than 78 percent of consumers will only engage with offers that have been personalised based on their previous engagements with the brand is CSPs have a huge revenue potential by offering customised services across different channels.

For example, CSPs could use behavioural data and AI to identify and target subscribers that previously downloaded content around Star Wars to offer a reduced-price offer to watch Rouge One on video-on-demand, or to recommend a subscription to a fan-Vlog sharing clips and upcoming Star Wars trailers, which in turn increases the time on the device and the data consumed.

All of this creates more revenue for the CSP.

Beyond creating additional revenue streams, incorporating AI to provide personalised offers also enables CSPs to improve brand reputation, customer satisfaction and loyalty.

Because, when you get it wrong – an offer is just spam.

For example, offering a customer with a prepaid subscription (which includes a certain amount of high-speed data), who has used up their data before the end of the month, a small amount of data package (that reflects their personal usage and will get them through those final days) at a decent price is a useful offer.

A week later, it has no use and is spam.

Upselling to the individual

Those CSPs that want to use subscriber intelligence to create new revenue streams should look at customised offerings for CSP customers.

One personalised offer that CSPs can offer is for a one-off data pack once a customer exceeds their limit.

For instance, when a prepaid customer is running low on credit, a CSP could offer incentives to top up: for example, approaching them to let them know that their data will run out soon, and offering free data for the rest of the day with a £2 top up.

As well as providing a useful offer, this also helps providers avoid churn.

Content is another important way that CSPs can upsell.

Whether it’s Star Wars or clean eating, CSPs can offer subscriptions to content that not only upsells new products to the customer, but helps the customer consume existing data packages faster.  

By encouraging them to use their data, when running low the customer may appreciate a personalised data package that is tailored to their usage, or may want to upgrade the data allowance for their account.

As per the individual customer profile, incorporating real-time AI, machine learning and behavioural data analysis tools, CSPs can generate new revenue streams in existing and new IoT markets.

As the traditional telecom revenue from voice falls, alongside with stiff competition from new entrants, CSPs need to focus on creating innovative and customised solutions.

We believe that CSPs are best positioned to lead and create new market opportunities through AI and other technologies support.

 

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