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Predictions

Hans Delleman (Holland) - Survival of the Fittest for Dutch Telecom Providers

If the law of the jungle suggests that only the strongest survive, then perhaps this is a maxim that telecom providers would do well to heed. Although the tremendous growth in the amount of data in recent years - caused primarily by the increase in the number of mobile devices - seems to suggest a period of prosperity for telecom providers, the reality is, unfortunately, very different indeed. The proliferation of free applications that directly compete with the services of telco providers, such as Skype and WhatsApp, mean that providers are facing an increasing loss of revenue as a direct result. Perhaps, however, providers need to learn how new technologies can help them to survive in the telecoms jungle, by allowing them to adapt and maintain revenues.

To handle the increase of data traffic, telecom companies understand the importance of investing in infrastructure. Today, more and more people own a smartphone - with the average data usage of a smartphone being at least sixty times larger than older mobile phones. This means that the amount of data per user is set to significantly increase. As a result, the need to further invest in the network has never been greater, although it's also clear that providers are missing out on income for text messaging and minutes, due to the arrival of free apps that compete with these services.

Recently, Dutch telecom providers tried to prevent this by taking measures such as increasing the prices of their services and limiting the broadband usage of some internet accounts. While telecom providers also wanted to be able to charge mobile services and block specific applications, the government's decision to make net neutrality a law prevented internet service providers from being given priority, and meant that they were unable to block services or charge extra for specific apps.

The Netherlands is the first European country to include net neutrality in the law, and while it's a shame for Dutch telecom providers who now need to find another way to increase their revenue, it seems that if they want to keep their heads above water, they must tackle the problem from inside, rather than continuing in their search for external solutions. By using intelligent IT systems, telecom providers can optimise their own business and find a constructive solution to increasing revenue. Systems which enable situation-based promotions mean that providers can help enterprises to personalise promotions and offerings in real-time so can meet the needs of customers and increase the response rate.

At present, it's clear that any providers are still fairly inflexible when it comes to their service offerings, which means that they are far more likely to miss out on opportunities and income as a result. By deploying intelligent IT systems which monitor relevant events, such as the behaviour of customers, location information and preferences in real-time, service providers can personalise and dynamically adapt to user needs. This, in turn, allows providers to offer customers appropriate promotions based on their usage patterns, which, combined with location-based information, means that the offering will meet the needs of that moment for every customer. Not only does this improve customer satisfaction and reduce turnover, it also allows customers to be much more responsive to up selling and cross selling opportunities.

As it stands, providers in the Netherlands seem far too dependent on external factors such as net neutrality, and it seems to me that it's never been more important for providers to use these external obstacles as an opportunity to improve the responsiveness of their business. If they are to survive in the jungle of the telecoms world, providers must begin optimising their own business and leveraging new technologies if they are to build a strong foundation for the future and continue to build their business.

By Hans Delleman, Regional Vice President Central Europe of Progress Software

 

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