This is certainly an exciting step for the tech company, but do Japanese operators have reason to worry? The answer is: probably not.
According to a survey conducted late last year, the majority of consumers would rather have digital services provided by their operator, rather than by a digital services provider or OTT (e.g. Facebook or Google).
Unsurprising? Not so much. The Cambridge Analytica Facebook scandal has left a sour taste in the mouths of global consumers. As a result, the majority now trust their operator more than they would a digital services provider or OTT.
For operators therefore, when it comes to creating and launching digital services, there’s no time like the present. Although companies like Rakuten will continue to threaten to claim operator revenue, operators need not fear. If they can embrace the right technologies and tools to emulate the flexibility and agility of digital service providers, they’ll be able to deliver the right services quickly, cost-effectively and seamlessly. Combine this agility with a digital-first mindset and a loyal and trusting subscriber base, and operators will soon off their inferiority complexes and start competing properly with the OTTs.
A changing tide
For some years, operators have been concerned with declining revenue, low ARPU and legacy systems that hinder any real hope of becoming respected digital players. For years, they have been bashed by other industries and the technology media for their outdated ways of doing business, inability to keep up with subscriber demands and shockingly poor Net Promoter Scores (NPS). But fortunately, the tide is changing.
OTT digital service providers are being plagued by consumer data security and privacy concerns. As a direct result, consumers are more conscious of how their data is used, how it is being collected and stored and – perhaps most importantly – how it is being monetized. And herein lies the operator opportunity. Unlike OTTs and digital players, they have never been accused of data misuse – in fact, they have been accused of being far too cautious with the data they own and not using it in a way that could create new revenue opportunities.
This consumer perception places the humble operator on a pedestal – albeit a small one, but a pedestal all the same. They are in the best position to become the trusted, safe alternative for subscribers wanting to move away from using OTT-owned services. What’s more, they are the familiar alternative – everyone who owns a mobile device, has some sort of relationship with their operator.
So, what do operators need to do if they are to capitalize on this shifting consumer sentiment?
Out with the old, in with the new
While digital transformation efforts have been underway for some time, legacy technology and their resulting limited ways of working continue to hamper operators. They need to be able to change to emulate the agility and flexibility of the digital players. This requires a rethink – operators know they can no longer rely on monolithic systems that take months to upgrade, are costly to maintain and do not give operators the ability to deliver the all-important, differentiating digital services that their customers are craving.
Legacy stacks need to be replaced for agile, platform and microservices-based solutions that give operators the edge they need to offer compelling additional services. These new-age solutions will give operators the ability to deploy new services in near real-time, and allow them to scale services up or down based on subscriber demands, needs and trends. It will also give them the openness and interoperability they need to form important industry partnerships to offer more services beyond the realm of mobile.
Winning in a 5G world
5G will enable an array of new use cases and services for operators, beyond what we believe to be possible today. In a few years’ time, consumers will be able to enjoy ultra-HD video, cloud-based gaming, and even benefit from increasingly connected environments with the proliferation of smart city ecosystems. Operators have an important role to play in a 5G world, beyond mere connectivity, but only if they can embrace the right technologies and approaches. If they don’t, they’ll soon see digital players, OTTs and industry newcomers steal their breakfast, lunch and dinner.
For once, the ball is in the operator’s court, but now the onus is on them to adequately serve the 5G opportunity.
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