How telecommunication companies utilize data analytics

For just a decade, the telco sector is nothing like what it was like. Telecommunication companies faced transforming changes and data is the centerpiece. First, mobile telecom companies shifted their focus from voice vendors to data carriers. Fixed services became obsolete and experience downfall. Competition became more fierce than ever because a market maturity means a limited amount of end users even though IoT are percepted as a potential booster. So, such situation should be examined more as an opportunity than like a dangerous threat.

Telco sector is facing crucial challenges. Where is the key?

Data, data and then again – data. The transformation of voice vendors into data carriers means telecommunication companies generate a significant amount of data. At A4E we believe that sufficient amount of rough data is a gold mine and telco sector is already keen to benefit. The specifics of their business domain is resulting in big data flows in real time. Trust us, it can’t get any better! It is so because of the simple fact that data is the achievement key to following three main goals.

Telecom business growth powered by big data

Telecom professionals know that the prepaid customers generate 60 to 70% lower average revenue per user (ARPU) than post-paid. Knowing the consumption patterns of a particular prepaid user, you can easily segment it into a cluster followed by lucrative postpaid offer creation with high probability of successful upselling for this particular group.

The above-mentioned scenario is a valid option for markets close to saturation. On the developing markets like some countries in Asia and Africa, there is still significant percentage of prepaid users. This is because of cultural and geographical specifics, infrastructure and the lack of retail locations. On top of this, there is a huge market gap for micro-financing that reach its customers via telco infrastructure as over-the-top (OTT) services. Through the deployment of data science to mobile financial services, there is the potential to boost the value of the prepaid mobile market by more than $70 billion, increasing ARPU by 10-15% and reducing churn by 50%, says recent research conducted by Juvo.

telecommunications data analytics

The consumer behavior of unidentified users like the prepaid customers is full of data points revealing a lot of information, which can be used by the micro financing vendors for defining whether a particular lender will cover its micro credit. The regulatory frame often does not allow telecommunication companies to reveal the customer identity and on some markets, it is unknown because prepaid customers are not obliged to share their IDs. Data footprint of a particular user is enough to determine if it is a woman or a man, just by the interrelation between incoming and outgoing calls.

Boosting telecommunication business efficiency

Taking advantage of existing data available within the organization is not possible but compulsory. Combined with market-driven insights to gain cost reduction while keeping desired quality by working more intelligently. Predictive analytics is capable of defining which customer groups are not going to renew their contracts by defining the key factors for such a decision. The churn impact of such big data work is significant and is acting as an immediate efficiency booster.

Marketing costs are striking part of any telecommunication business. By applying data analytics to marketing campaigns to define the most successful promotional activity for driving sales, telco businesses can reduce media expenses while increasing revenues at the same time. Investing in infrastructure and cloud solutions to manage an enormous amount of data is transforming into an advantage by lower operational cost per TB that give its fair share to the improved efficiency in telecommunication companies.

Customer behavior insights

The customers` data footprint is enabling telecommunication businesses to engage users more personally than ever, yet more effective. Improved customers journeys, tailor-made content, event-driven communication, sophisticated recommendation systems, etc. are driven by data mining and data analytics. Boosting engagement means increased loyalty resulting in reduced churn rate. Gamifying the interaction between business and customer is boosting both loyalty and engagement. Applying a game mechanics is encouraging subscribers to progress through reward levels to unlock benefits.

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