Smarter communications through analytics
As the world becomes more interconnected, digitized and globalized, telecommunication infrastructure is taking on an unprecedented level of importance. The mobile infrastructure, in particular – networks, devices, services and applications – is growing fast. As of 2010, in developed countries, mobile subscribers outnumber fixed ones by more than two to one; in emerging markets that ratio exceeds five to one.1 Projections call for over 7.1 billion mobile-connected devices by 2015 – approximately equal to the world’s population in that year.2 No connected technology dominates the end-user segment like mobile. It is, in a very real sense, part of the foundation of a new, smarter planet.
These staggering numbers bring with them great opportunity and many companies are working to capitalize on it. Nevertheless, there are significant challenges. Revenues are not keeping pace with the cost of providing services. In 2010, global mobile data traffic tripled, while revenues increased by only 2%. If the current direction continues, the mobile segment in North America will experience negative cash flow as soon as 2013.
Communications service providers (CSPs) are well aware of the importance of the surge in traffic. Some 71% of industry CEOs say the information explosion will have the second-largest impact on their organizations in the next five years.5 To compensate, many are following the lead of their wire-line brethren, who have been aggressively lowering costs over the last decade. As important as these efforts may be, the way forward lies in maximizing the value of customers by tapping a significant, largely unused asset – information.
As research suggests, investments in data integration and analytics that maximize the value of each customer are worthwhile and create potential for financial gain. To quantify the value of those investments, an illustrative $8 billion communications provider was modeled. Results from this effort are presented throughout this paper. By deploying the right capabilities, it may be possible to achieve over $240 million per year in increased revenue and operational savings by year four with a payback period of less than 18 months.