Indian Telcos Set for Data-Driven Digital Transformation

By Invitation Russell Skingsley

Russell Skingsley

The Indian economy has been in the limelight for many reasons recently. Based on the data from October 2016, Forbes reported that for the first time in more than 100 years, economic growth in India had surpassed that of the UK. Now of course such an outcome is influenced by the negative impact of Brexit on the UK but it also highlights how much India is powering forward. With the demonetization drive heralding a new era in the Indian economy, expectations are high on the country’s ability to turn the challenges into opportunities. The prospects around a cashless economy in India and the massive opportunity it brings to different industry sectors have ignited a series of discussions and business initiatives targeting India.

Telecom, the economic growth catalyst

By providing the communications network, the telecom industry acts as the backbone of an economy, and service providers (SPs) play a central role in facilitating the economic transformation. By acting as a facilitator of services like e-commerce, teleworking, e-learning, e-health, e-governance and more, telecom has acted as a catalyst of the economic growth of the country. Services like mobile banking (m-banking) and mobile money have created revolutions across payment channels, with telecom providers also directly benefitting from these services. For example, TRAI says in May 2016, around 37 lakh mobile banking transaction attempts occurred over USSD channel.

No doubt the telecom sector, which contributes to around 2% of India’s GDP, will be a major beneficiary of the digital transformation that the Government of India has embarked on. With data becoming the new currency, Service Providers (SPs) focus in the coming days will be on how to leverage the power of data to improve customer experience and identify new opportunities in the market.

Digital transformation, altering the DNA of Indian telecom

As per the latest report from TRAI, adjusted gross revenue (AGR) of the telecom sector for the quarter ending June 2016 stands at Rs 53,383 crore, growing at 10.34 percent over the previous quarter. While the revenue figures illustrate a robust market scenario, the performance benchmark report shows there is a large gap in service provisioning and meeting Quality of Service (QoS) requirements. Service Providers in India lag behind in delivering services quickly or addressing customer complaints (Ref: Table 4.7 of TRAI report). This is a huge opportunity for telecom players to capitalize on and accelerate their digital transformation journey and address issues related to QoS.

While telecom companies in key markets like the US have already implemented strategies to digitize their key processes and monetize data resources, telecom companies in India are now looking to digitally transform. However, Digital Transformation doesn’t come easy. Telecom operators in APAC are executing digital transformation projects, 85% are still conducting them as stand-alone initiatives without alignment to a broader technology roadmap or business strategy, says a survey conducted by IDC. Like any major business initiative, digital transformation requires changes in process, people, skills, and technology. The only way to realize the benefits of digital transformation is to better access, integrate, and analyze your data to create insights that empower digital transformation. Telecom operators must shift their thinking from focusing on the traditional IT stack to enabling digital transformation through data. In fact, McKinsey says a telecom service provider in Asia was able to reduce the number of customer calls by a million a month by providing online “self-care” through services such as Twitter and Facebook.

In short, the transformation demands changing the DNA of the operators to create a new operational model with customer positioned at the centre and acquire the skills to accelerate their journey to become new-age service providers. Going forward, telecom service providers’ focus should be to bring digital transformation at the core to:

• Improve customer experience and build loyalty
• Devise new business models and generate revenues
• Bring operational transformation for better opex savings

The evolving customers and their data

Almost all industries have realized the need to analyze customer data across multiple channels, which are primarily governed by telecom networks, to improve customer experience, reduce churn and devise entirely new revenue streams; however, SPs in India have not been able to similarly use them for their own operational improvements or monetization innovations.

With customer data analytics, operators could identify customer behaviour at various touch points, identify loopholes in business models and devise strategies to build customer loyalty. Call drop analysis, for example, is one of the best ways to identify pitfalls in service delivery and network coverage. By digging deeper into network, service and device data, service providers could identify opportunities in network optimization and capex savings. Data gathered from sales and marketing activities, including those from billing and payment records, could be used to identify customer behaviour and manage churn.

In addition, SPs could utilize the data to build new enterprise business models by partnering with different industries and government organizations. Telecom companies, which own the largest chunk of customer data in the world, could help other organizations use the data constructively for various activities. Government agencies, for example, could tap the data supplied by SPs to improve decision making. Location based information has largely been used to tap customers without violating their privacy. Globally, SPs have already started building new business models around data. Verizon’s Precision Market Insights and Telefonica Dynamic Insights are two trendsetters, with other leaders likely to follow suit in the coming months.

IoT, closing the gap between fact and fantasy

IoT is another emerging opportunity for operators in India looking to cash in on data. Globally, SPs have already stepped into multiple industry segments to help accelerate IoT adoption. Verizon Telematics, for example, provides connectivity and telematics capabilities to some of the world’s top manufacturers to help manage large vehicle fleets more efficiently.

While the growth of IoT in India will depend on the availability of ubiquitous connectivity, there is a huge market opportunity that lies ahead for SPs. Initiatives such as Digital India and 100 Smart Cities have given a great impetus to it. By extracting the vast amount of data flowing across IoT networks, SPs can support a wide spectrum of services like smart cities, healthcare, financial services, insurance, and more.

However, to be competitive in data collaboration efforts, SPs need to acquire technologies that enable them to deliver data insight in real time. The data centre, the information hub for SPs, is at the centre of this transition, so the evolution of the service provider network needs to be done with the aim of marrying analytics and network coverage. In all likelihood this implies building more data centre like capability to the edge of the service provider network.

Technology trends in telecom data-centric innovations

Opportunities surrounding the data are large, and so are the challenges. The data lying in disparate applications needs to be extracted, governed, complied and accessed. In fact, recent IDC research indicates that 53 percent of organizations in APAC region consider big data and analytics (BDA) important, and so have either adopted or plan to adopt it in the near future. However, IDC also reveals that one in three organizations in the region find it difficult to build business case or measure ROI while leveraging BDA solutions. Fortunately, with the help of big data analytics technologies, SPs can address these challenges and build custom business cases around data.

The following are the emerging trends around data analytics:

• Centralized data hub for better governance of data: Hitachi whitepaper suggests that to monetize data internally or externally, SPs need to invest in digital platforms that deliver comprehensive data management and analytics capabilities. Organizations need to correlate and merge data from different channels and ensure its governance and accessibility. A centralized data hub gains relevance in this context as it allows them to ingest data from different sources, store and scale it beyond the capabilities of traditional storage and provide search and governance across different channels including public cloud, private cloud and mobile devices.
• Storage moving from Capex to Opex: With digital transformation becoming a strategic focus, there is less focus on “technology”; instead they buy optimized outcomes where the vendor shares the associated risks. This Storage-as-Service model allows them to move away from the traditional building block approach to a fully flexible services model. Here, the client and vendor work together to devise custom solutions to meet the changing business requirements, giving ample opportunities for experimenting new technologies and fresh strategies.
• One platform for all data: The unified computing approach is gaining wider popularity among SPs thanks to the ability of the platform to handle data from multiple physical servers from different vendors. The concept brings the latest advancements in Block, File and Object Storage under a single umbrella on a capacity-based model to simplify data management and accelerate service delivery. This fully managed services model also helps service providers unlock the potential of their existing technology investments.
• Integration of OT with IT to build IoT data repository

With IoT emerging as a new business opportunity for Indian operators, a lot of work needs to be done to unlock the value of data captured from connected devices. Critical elements need to be brought together to create a complete IoT platform that can integrate operational technology (OT) data (data from sensors) with data from core processes to gain a complete understanding of the events. As IoT data volume increases, there will be increased investment from SPs in analytic platforms to support the dynamic IoT requirements. A flexible IoT core platform that can accommodate and integrate the diverse array of emerging data platforms such as Hadoop, Spark, and NoSQL will be the best alternative to traditional IoT platforms that are purpose built based on specific usage cases.

• Open-source technologies to broaden IoT ecosystem

Hitachi Insight Group has shown that the demand for flexible and future-proof IoT platforms has also brought new open source technologies to the front of IoT analytics. In addition to the cost benefits, the open-source platforms help SPs build a flexible and modular model that can future-proof the IoT network and build an active partner ecosystem. The open framework and the flexible IoT core can support a vast array of data types and help build different business cases.

In summary, the ability to influence and enhance customer experience will give a competitive advantage to telecom providers in India. With the help of disruptive digital technologies, SPs can build a service-oriented architecture, which yields them long-term benefits by fostering growth and earning customer loyalty. Other organisations have been able to exploit the data carried by Telcos to the betterment of their businesses. There is no reason why Telco’s themselves should not be able to see the same or even superior benefits as they carry an aggregate of this data. This data represents a potential gold mine once corralled and analysed. Digital transformation offers the opportunity for telcos to finally monetize their networks in a way that over the top businesses have been doing for years, an exciting prospect for a sector that represents the backbone of Indian business growth.

The author of this article, Russell Skingsley, is CTO, Solutions and Products Group Leader and Head of Presales for Asia Pacific at Hitachi Data Systems