A telecom provider guide to data-driven transformation
The unique challenges of 2020, created by the Covid-19 health crisis, elevated the importance of telecom services around the globe. Most telecom operators adapted to the task remarkably well, thanks in large part to the digital transformation journeys they’ve been on for the past several years.
At the heart of operational excellence and digital transformation in the telecom space is data, or more specifically, data-driven decision-making for better business performance. And although many operators have been sluggish to implement data analytics on a large scale in the past, events in 2020 gave them new energy.
Recently, CCS Insight worked with data platform provider Splunk to produce a practical guide to help decision-makers within operators seize opportunities afforded by data analytics and build operational excellence into their businesses. The report highlights major demand trends, challenges, solutions and paths to implementation, and we hope it will steer operators to become the data-driven businesses they need to be in the post-Covid-19 economy.
Below I look at some of the highlights and recommendations. You can download the full report here. I’ll also be running a webinar on 17 February with Splunk and guests Edge Gravity and Lumen Technologies, covering The Future of Data-Driven Transformation in Telecoms — you can book your place here.
The Need: What’s Driving Data Analytics?
Several forces are creating a need for modern data platforms within the telecom operator environment in 2021.
Industry disruption. New, cutting-edge technologies such as 5G, mobile edge computing, the Internet of things, software-defined networking and network function virtualization are reshaping the industry and competitive landscape, opening the door to new entrants to rock the telecom market.
By 2025, 5G connections will reach a staggering 3.6 billion globally, up from 250 million today, according to our market forecast (see chart below).
But operators aren’t alone in reaching for this opportunity. Recent investments in 5G networks by the likes of Microsoft, Amazon and Google Cloud suggest that cloud providers could become potential rivals in the future. In fact, CCS Insight predicts that a major cloud player will move to address the full continuum of 5G mobile network solutions by 2025, indicating the change to come in this market.
Cloud and agility. To fend off stiffer competition and disruption, operators are rapidly turning to cloud platforms to make their operations more agile and flexible. The pandemic has fuelled quick adoption of cloud services in telecom organizations owing to rapid changes in customer demand and the need for resilience. It has also prompted them to embrace cloud-native and agile development practices in order to improve the digital experience of customers and operate more nimbly in a remote world.
New revenue streams. Operators are also under pressure to find new sources of revenue as the costs of updating their infrastructure continue to soar. According to 69% of telecom executives surveyed by Telecoms.com in 2019, operators must be prepared to offer many more new services in the coming years beyond the current voice, messaging and data packages.
One emerging opportunity is in monetization of operators’ customer data. Vodafone, for example, launched a location intelligence service in Spain, Italy and the UK, providing companies with data insights based on the anonymized movement and demographics of users on its network. Amid falling revenue from traditional services, this is a good example which highlights some of the new sources of innovation in data that are now translating to tangible revenue.
Higher net promoter scores. Perhaps most importantly, data has become vital for operators to put the continuous improvement of the end-to-end customer experience — regardless of domain, network or service environment — at the heart of their business strategies. Some are now publicly reporting an improvement in net promoter scores as a critical business metric. At the same time, though, many are still grappling with service levels overall, as industry benchmarks remain lower than in peer industries such as technology.
Altogether, these forces are pushing data analytics rapidly up the priority list for operators in 2021. However, three critical challenges are making successful implementation a difficult target to hit.
The silo problem. Despite sitting on a mountain of data, most operators struggle to make sense of it because of their operational silos. This operational reality, which reflects the immense scale of these companies, often results in fragmented data and an inability to get practical insights that span the breadth of their operations.
Network transformation. The lack of fluency in large-scale data analytics makes it harder for operators to grab opportunities stemming from their future networks. A leading theme of 2020 was network transformation, with both core and radio access networks for 5G seeing a lot of activity and fundamental change.
As 5G matures, networks will become increasingly “cloudified”, enabling data processing, analytics and artificial intelligence to move closer to the source of data or to the network edge. This architectural shift in networking will be the key to unlocking new services and technologies like edge computing, multi-access edge computing and autonomous vehicles. Operators that fail to implement large-scale data analytics now will struggle to address these shifts and opportunities later.
The old and new. Operators have the added burden of maintaining legacy networks and back-end infrastructure. According to Telecoms.com, 89% of telecom executives believe that providers will continue to invest in 4G as it will be essential for years after the dawn of standalone 5G networks. Data analytics strategies must therefore span the old and new, a trend we refer to as the data continuum. This poses a challenge to converting data in legacy and future business areas, owing to a lack of in-house data talent and unsupportive business processes.
The Solution: Modern Data Platforms at Scale
To overcome these challenges and advance their data and digital transformation strategies, telecom operators must deploy a scalable data analytics architecture across the breadth of their operations.
There are five characteristics that operators should consider when selecting a data analytics platform as part of their data transformation strategies. Collectively, they form a key aspect of data architecture, engineering and data science in the future operator landscape.
- A single platform and unified data source, operating at scale. This includes data collection and ingestion, preparing data for analysis and reporting.
- An easy-to-use analytics environment for business and technical teams. It must span the entire telecommunication environment, regardless of operational or business domain, and be suited to on-premises IT, hybrid and public cloud environments.
- Delivers 360-degree visibility of the customer. A good solution should offer digital performance and experience monitoring, and easily enable new revenue-generation opportunities for data analytics.
- Improves company-wide data governance. Strategies must include, by design, improvements to data security, privacy and compliance within the platform.
- Functionality for the future. This approach must also include a viable road map for future areas including improved scalability and search features, toolkits for machine learning and stream processing, among others.
In 2021, operators must act to address the main data hurdles in their organizations if they want to stay relevant and achieve operational excellence. Here are our top three recommendations for executives.
- Break down the silos. Gain executive buy-in by focussing on business problems that can be solved with better data. Pursue uses that can be solved quickly in specific areas, but then remove silos by replicating success throughout the business, and have the means to share data easily and efficiently with the entire organization.
- Get the platform right. It’s vital that operators have a foundational data analytics platform that can scale across business operations to provide a holistic view of the customer, service, future, and legacy network environment. Specialist providers such as Splunk can also help in future areas such as machine learning, streaming data and automation requirements.
- The customer is king. CCS Insight believes the most successful operators have been those that place the end-to-end customer experience and improving net promoter scores at the heart of these efforts. In this respect, observability is a vital aspect of operational excellence in telecoms.
Check out the report for more insight, including several case studies from leading telecom operators and guidance on the journey to successful implementation.
And don’t forget to register for the webinar on 17 February. I look forward to seeing you there!
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