For years telcos have been sitting on a wealth of user data. Where market penetration of connected devices, from smartphones to tablets, has reached saturation point, telcos have developed a billing relationship and a profile for most of the population including family groups and businesses. Anyone under the age of 30 has grown up in a mobile connected world with a service provider, over familiar from blanket public exposure through media advertising and sports sponsorship – the telco’s presence is rarely far away. This degree of familiarity could be expected to offer a high level of trust in telcos that in turn ought to provide plentiful opportunities for offering targeted and relevant value-added services, leading to business growth away from traditional revenue sources. To date, this has rarely been the case. However, the role of telcos is changing, due principally to the commoditization of services and the arrival of the over-the-top (OTT) players, who are able to offer VoIP services as well as a myriad of applications that today may only require the telco for Internet connectivity. As a result, more attention is now being paid to boost customer loyalty, to reduce churn and to target new services more effectively than in the past through experience-based marketing.

The operator’s data sources are as diverse as billing and payments, the CRM database, core network sessions, self-care applications, text messages and trouble tickets. This raw information can then be translated with good analytics into operational optimization and enrichment, both for the individual user as well as the network as a whole. The most transparent business opportunities are driven by insights based on user behaviour which when connected to business processes can drive actions. When automated and real-time, decision-making becomes quicker and more efficient.

Real-time data from network events and elsewhere can be analysed to assess symptoms and causes of issues, which when shared with a customer-facing team can dramatically reduce the time required to resolve calls and to repair faults. Real-time analytics of network traffic can also be used to predict and prevent cell congestion when there is a high concentration of users at, say, a football match or a concert. Likewise telcos can track the movement of vehicles and offer a premium service for avoiding traffic snarl-ups.

In some cases, the societal benefits are tangible as in the case when Telefonica used mobile data to measure the spread of a swine flu epidemic in Mexico, enabling the government to reduce virus propagation by 10%. Or when, after a massive earthquake in Mexico, Telefonica researchers captured mobile data records that, once anonymized and aggregated, allowed visualizations of the density of calls in the different parts of the city to be built, immediately depicting the areas most affected by the earthquake.

However, users are becoming increasingly aware of what data all companies store about them, and the telcos are no exception. It is only a matter of time before telcos are required to seek customer consent before selling their data insights to third parties.

This article has originally appeared in the KuppingerCole Analysts' View newsletter.

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