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As consumers and the services they desire change, network operators need to become digital service providers to keep up.
June 3, 2016
We live in a digital world where we can be online almost whenever we want and anywhere we go. Teens and young adults are even more connected to the always-on lifestyle; they consume digital services and share their experiences in ways older generations never fathomed. For service providers, this means that their customer base is changing dramatically and their traditional services are becoming less relevant.
If you asked a group of children today who provided the broadband to their home or the Wi-Fi to their smartphones and tablets, most, if not all, of them would probably say Google, Apple or Netflix. They would not say AT&T, Verizon or Comcast.
This has been going on for a while. Even back in 2014, Accenture's Digital Consumer Survey found that 35 percent of consumers considered taking broadband services from Google, while 29 percent thought to buy residential voice services from the internet search giant. Many consumers are looking to major internet and device brands—think Apple, Microsoft, Google and Samsung for starters—for services traditionally supplied by fixed and mobile operators, ISPs and cable companies.
The ugly truth for service providers is that consumers value services and applications more than the networks that support them. Consumers trust brand names and want to turn to those same web-scale companies for voice, broadband and messaging services.
Service providers know this and are working to provide greater value to their customers, but are often uncertain of how to go about such a transition.
The Digital Transformation Clock is Ticking
Becoming a digital service provider means turning into something more than walled-garden, regional service companies. Service providers need to use their networks as a platform for third-party partners, focus on service delivery (not just service creation) and support diverse ecosystems.
Customers want personalized information and tailored services; they want a portable microcosm of services around them at all times—a "service halo."
Real digital service providers can provide that kind of service halo, but they first need to work out some core IT infrastructure issues. They need the right customer management and revenue management systems. Their back-office IT systems need to work with partners across multiple business segments, be real time and be capable of supporting contextual, real-time offers and personalized loyalty programs.
It’s worth repeating: The back-office transformation is a critical step that service providers cannot overlook if they want to evolve their businesses. Hundreds of network operators today have revenue management systems that haven’t been upgraded since before the iPhone was invented. Think of how much network traffic, consumer behavior and media consumption has changed in that time. Is the pre-iPhone revenue management system really up to the task of onboarding new partners and supporting new services?
Service providers that want to change must look for strategic partners that offer more than just a single piece of the puzzle. They must find partners that have a full stack of solutions for customer, partner and service management. This evolution is inevitable and service providers must act now so they can change their businesses, become more competitive and unleash new opportunities by offering their networks as a service.