While mobile operators remain excited about 5G, they still haven’t figured out how to monetize it. Leveraging the vast amount of data they collect about their customers’ behavior, preferences, and location is key. A global poll conducted by Intersec reveals four groups of promising data monetization use cases. This is the first article in a series exploring their potential.
Author: Sébastien Synold, Product Manager, Intersec
Intersec’s poll of nearly 800 people working in the telecommunications industry does not point to one “killer app”, rather it highlights multiple ways to monetize data today and in the future when 5G is more widely deployed, including cloud-native core networks capable of network slicing.
It is not surprising that internal data monetization tops the list of the list, with nearly a third of respondents choosing it as the best opportunity. This well-established set of use cases focuses on collecting customer and network data to personalize services and upsell or cross-sell additional services. This article looks at this use case in depth. Subsequent articles will look at the other three.
What is internal data monetization?
To monetize data CSPs need an analytics platform capable of collecting and extracting terabytes of raw subscriber activity and network events. AI and machine learning algorithms are also necessary to process, label, organize, and segment the data so it can be delivered as highly contextualized datasets that ensure compliance with regulations protecting customers’ privacy. These capabilities can increase revenue and enable cost savings across use cases.
CSPs can monetize data internally by using the platform’s micro-segmentation capabilities to label subscribers with tags based on demographics like age and gender, geographic location (such as where they live and work and the places they’ve visited most), and activity usage (for example, favorite apps and visited websites). The combination of all those tags provides an accurate view on customers’ behavior and interests.
The telco can then analyze the tags to increase customer engagement and sell additional services to subscribers. A CSP could also analyze a customer’s usage of voice and data services along with their purchases and then apply AI to predict how the customer will behave in the future. This combination of analytics and AI can tell the telco whether a customer is about to top-up their account or churn, for example.
Internal monetization in action
True Digital, a multinational technology company headquartered in Thailand, is using Intersec’s micro-segmentation capabilities to improve customer engagement and satisfaction. The company labels subscribers with 400+ tags that are demographic, geographic, behavioral, and interest-based and then uses real-time triggers to decide the best moment to interact with customers.
Similarly, Orange Guinea is leveraging real-time customer data to engage subscribers at the right time and optimize the outcome of each subsequent customer interaction. The company designs marketing actions based on insights, AI-based predictions, and workflow automation.
As a result, Orange Guinea’s marketing teams have been able to refine customer satisfaction scores, optimize adoption of services, and avoid revenue cannibalization. And knowing exactly when to engage with subscribers maximizes response and engagement rates while preventing churn. One targeted campaign improved Orange Guinea’s conversion rate by more than 5%.
Adding geolocation
Another way to monetize data internally is by adding geolocation capabilities. For example, an operator could set up a geofence around an area where 5G is deployed and then send upgrade offers via SMS to 3G and 4G customers as they enter the area.
Geofences can be static – showing when a user enters an airport, for example – or they can be user specific, such as pinpointing when a mobile subscriber is leaving their place of work. It’s important for the telco to be able to differentiate between people who are simply passing through a zone versus those who are staying for a predefined duration of time.
In France, Orange is using geofencing to entice subscribers to upgrade to 4G, leading to increased ARPU (average revenue per user). Orange has also increased its conversion rate through contextual interactions and has seen measurable improvements in customer satisfaction. As an added benefit, the telco has been able to measure the impact of 4G in specific geographic areas.
Monetizing 5G
But monetizing data internally will not be enough to help CSPs offset the high cost of deploying 5G, increase their revenue, and reclaim their leadership position in the communications services value chain. They must also monetize data externally with enterprise customers and partners.
Operators can extend micro-segmentation and location data as a service to their enterprise customers and partners. Telcos can accurately locate any device at any time on their networks, allowing them to provide anonymized and reliable data to third parties for targeted advertising and other uses.
These capabilities are especially important now as third-party cookies are set to be phased out by the end of 2024. And they become increasingly critical with the deployment of 5G.
Indeed, telcos are facing a dilemma: They are spending billions to deploy 5G technology, but they are not realizing a return on their investment. Mobile operators in the US, for example, are spending nearly $50 billion a year to roll out 5G, and McKinsey & Company predict that globally operators will collectively invest another $650 billion by 2025. Yet, most operators’ revenues are flat or declining.
Additional research by McKinsey finds that network operators have lost ground with the introduction of each new generation of mobile technology. “Despite the huge capital investments made by operators to keep pace with successive waves of new technology over the past decade, their core business has become increasingly commoditized and growth has slowed,” McKinsey explains. “Instead, most of the value created in the industry has been captured by so-called edge players – those manufacturing handsets, developing apps, building infrastructure, or providing streaming or other digital services.”
Even so, mobile operators remain optimistic. They believe they will be able to increase revenue – and cut costs – because of the new opportunities to leverage the data they collect to optimize and expand their services by working with enterprise customers and partners in 5G digital ecosystems. In the next article in this series, we’ll look more closely at location-based services and how True and other CSPs are providing data-as-a-service to third parties in a way that delivers insights while respecting customers’ privacy.
