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The top 5 challenges for CSPs in the current game changing market

By July 1, 2015 No Comments

However in the past year it could be argued that the challenges facing CSPs are game changing. The advent of all things digital is opening the door not only for new opportunities but also for many new challenges that CSPs will need to face head on and have solutions for. Below is my take on five of the main topics that CSPs need to deal with.

1.    Risk of data becoming commoditized

CSPs are in danger of commoditizing data if they just sell data as a product. Every week we see another CSP announce an increase in the quota of their basic bundles and associated price cuts resulting in a negative impact on their revenue lines.

In order to overcome this risk CSPs are developing new revenue sources – from selling more products and services to looking at new business models. Many CSPs are working with content partners and upselling television, entertainment and music services to add value to their subscribers.

BSS needs to enable CSPs to rapidly develop, launch and monetize new offers – this is often not possible with service heavy legacy systems. BSS needs to be all real-time with a centralized offer catalog that can enable fast time to market for many, many more offers.

 

2.    Cost vs Quality – is WiFi a friend or a foe

Many cost sensitive customers don’t even bother switching on mobile data relying solely on public and free WiFi for their mobile data services. In order to compete, CSPs have started to offer micro-service passes that stress the convenience of cellular data at a low cost e.g. one day, 50MB data pass or daily application service passes such as WhatsApp to encourage customers to rely on cellular network for their data needs.

While cost is a key factor for many customers, network quality is deemed as the most important factor when choosing connectivity.

CSPs are combining ANDSF (access network detection and selection function) and policy management to intelligently move customers between networks to achieve the best quality. CSPs can set rules as to what traffic goes to WiFi and what stays on LTE. This could mean video traffic for some types of customers on certain devices gets offloaded, for example.

Google’s Project Fi is a good example as Google rely on WiFi connectivity where possible and only fall back on their partner LTE networks when the quality on the WiFi network falls below an accepted standard.

 

3.    CSPs are not engaging with their main asset, their customer base

Digital service providers such as Facebook and LinkedIn are experts in engaging with their customers with timely and relevant messages. On the whole most CSPs don’t really engage effectively with their customers. Many customers receive a bill once a month and also a phone call when they are approaching the end of their contract to re-lock them into a contract.

BSS needs to be able to drive real-time, relevant customer engagement – from upselling a new service to providing a customer notification on a loyalty offer. CSPs already have the data in their systems – the key is harnessing this data and turning into relevant and timely intelligence to drive customer engagement.

 

4.    Inability to provide real-time contextually aware offers

CSPs traditionally rely on historical data stored in data warehouses to run their marketing campaigns. While CSPs continue to create innovative data services to generate more revenue, they may not be maximizing their revenue potential with these traditional upsell approaches.

In order to significantly improve their offer uptake rates CSPs need to use real-time information (usage, location, device), combined with historical data (billing history, tenure) to present personalized, contextually aware offers to their subscribers. In a recent survey of 87 operators by Openet, respondents indicated that they could increase offer uptake rates by 75% and data revenues by 15% if they could deliver real-time contextual offers.

 

5.    The Need for Agility – Maximising capex and opex savings with the implementation of NFV and SDN

CSPs are striving to become leaner and more agile. They want to turn up services in minutes rather than months. SDN (software defined networking) and NFV (network functions virtualization) are playing a major role in this initiative but CSPs require new thinking on how legacy OSS/BSS systems will need to evolve in order to support NFV.

On its own, NFV is not enough. NFV concepts need to be applied to the OSS/BSS to deliver on its promises such as agility, reduction in total cost of ownership, increased elasticity and greater service availability. This is particularly important for policy and charging functions. There is little point in having a dynamic network if the monetizing, access control, and revenue handling systems are not similarly endowed.