ShortCut: Big Data - Bigger Business?

SHORT CUT BIG DATA, BIGGER BUSINESS? Data is the fuel of the future for telco companies What routes do people take in the city to get to work every day and to big events such as soccer matches? Is there a link between heating consumption at home and the use of other electronic devices? Or, in practical terms, is it worthwhile for the garbage collectors to pick up a particular garbage can today on their assigned garbage collection route? The answers to such questions has become the fuel for entire business models. Data and, in particular, the intelligent way in which it is connected to valuable information is the basis for future-oriented concepts such as smart cities or smart homes. A promising beginning In the realm of big data, analyzing customer data for internal purposes is just the beginning. It is, however, a very promising beginning. As an example, by using predictive analytics, a company is able to predict which customers are considering terminating their contracts and for which customers a different data package or specific add-on product could be attractive – virtually a “must” to safeguard the existing core business via cross-selling, up-selling and churn management. Added value by connecting data Data and the intelligent way in which it is connected to information is becoming the fuel for entire business models. Telcos hold a key position in this arena – an opportunity they should seize without delay. Do away with the word “actually” Telecommunications companies (telcos) actually hold a key position in this arena: their customer structure provides them with access to a large amount of data. However, the key word here is “actually”, because to date big data is hardly ever included in telcos’ plans for the future. Ideas and pilot projects for truly new business models based on big data are still rare. The goetzpartners study “The Digital Challenge” shows that only two out of five telcos already monetize their data externally. Yet telcos urgently need approaches to big data to manage the pressure from new players on the market – such as Google, Amazon or Facebook – and to compensate for declining revenues of up to 30 percent over the past 10 years in the traditional consumer business. If telcos overlook big data as a basis for new business models, they are handing the market over to others and simply giving away revenue and future growth potential. Going a step further, big data may also be the basis for entirely new streams of revenue. As an information supplier, telcos are a provider of data to their partners. Based on movement data obtained from mobile communications customers, cities and municipalities are able to control the flow of traffic, and radio stations can broadcast more accurate information on traffic jams. Telcos do not even need to build a separate infrastructure to capture this type of data. DR. ALEXANDER HENSCHEL Managing Director, goetzpartners 3 STAGES OF BIG DATA FOR TELCOS low REVENUE POTENTIAL high close 1 COLLECTOR Customer data for cross-selling, up-selling, and churn management 2 RETAILER Aggregated movement data, e.g. for traffic analysis PROXIMITY TO CORE BUSINESS 3 NETWORKER Analyzed data on user behavior, e.g. for smart city or IoT projects with partners far