Telcos move from being operators to service providers

Vikram Sharma has been a platinum customer for a Delhi-based telecom operator. In other words, he provides very high annual revenue to the telco, which boasts of one of the largest telecom subscriber bases in the country.

But, he isn’t happy with the telco.

“The operator promised me a certain download speed for the unlimited data package that I have chosen from them. But it is such a pain to use this connectivity. Most of the time, my mobile just hangs up and nobody cares more than just paying lip service in the form of “We are sorry” and “We will ensure a better experience for you,”” says Sharma, who like the millions of aggrieved mobile phone users in the country is awaiting to switch operators once mobile number portability (MNP) is implemented.
Happily for customers like Sharma, telcos are increasingly waking up to the impact of clogged networks on user morale and what MNP can unleash.

“The approach adopted by telcos in the voice-heavy business so far is going to change as data play begins in the 3G world. Some of the top telcos in India, such as Bharti Airtel and BSNL, are already making their networks intelligent to know user preferences and usage patterns,” said Giridhar Java, director - Southeast Asia, InfoVista, a US-based firm that makes software and hardware appliances for better performance management of applications and networks.

According to Java, Bharti Airtel has already procured network monitoring software from Infovista and is looking to upgrade to the latest version that provides features such as intelligence to allocate additional bandwidth capacity automatically when a high priority user is facing a bottleneck, amongst others.

Telecom experts believe Indian telcos will have to build capabilities for delivering to better customer insight when data telecommunication becomes the order of the day.

“Mobile data services demand new capabilities such as customer insight, analytics, product management, network management, pricing, promotion, user experience management and device management that the operators currently do not have and will need to build anew,” Arvind Subramanian, a telecom sector expert at Boston Consulting Group, had said in a recent interview.

Experts say better network and application performance insight can throw up newer revenue opportunity for telcos.

“Today, a bank or any other enterprise uses the broadband connectivity of a telco just as a connectivity pipe and nothing more than that. What if the telco approaches the bank with the offer that we can tell you the pattern of usage of your core banking or ATM by customers in a particular locality, which can help you allocate under-utilised routers in other areas, thereby saving you the cost of buying extra routers to handle that traffic?” asked Java.

A telco could also look at earning revenue from content providers by giving them additional insights on region-specific content usage patterns.

“Content providers are interested in looking at application usage patterns. Telcos such as ours are weighing ways to provide that keeping in mind regulatory specifications such as ‘no divulging of customer information’. But these are early days to say whether they are revenue opportunities for telcos,” said a top executive at a Mumbai-based telco.

As the low-revenue-earning voice business becomes unsustainable, telcos are making their networks intelligent to judge consumer usage patterns and allocate resources accordingly, with some even looking to earn revenue through intelligence.

In view of this, say experts, data usage, which currently contributes about 8% of annual revenues to most telcos, can quickly rise to 20-30% with better service provision.