Telcos’ Big Data Initiatives Show Promise but Operators Have Yet to Strike It Rich

Telcos’ Big Data Initiatives Show Promise but Operators Have Yet to Strike It Rich

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With big data and analytics, telecom operators would seem to have hit on just what they need most: a promising new revenue stream. Telcos, after all, are sitting on a mother lode of location and usage data, setting the stage for lucrative business models. But a new report by ETIS—The Community for Telecom Professionals and The Boston Consulting Group (BCG) reveals that monetization has so far been minimal. The report, titled Drilling for Digital Gold, looks at the IT costs and spending patterns of telcos participating in the 2016 telco IT benchmarking study (TeBIT).

This year’s TeBIT study finds that while telcos are making significant investments in big data and developing sophisticated analytics, their efforts are not generating substantial revenue. Even the most successful TeBIT participant still saw less than 0.05% of its revenue generated directly by data and analytics external monetization initiatives.

Why haven’t telcos been able to strike gold? The survey suggests that operators may be too conservative when deciding what information to collect and how to use the data they do capture. Privacy is a concern, but at the same time, telcos have not fully developed the organizational structures that a successful data and analytics business requires. Nor have they identified the optimal approach to monetization. Current business models are varied, with no silver bullet emerging.

Success will require greater collaboration between the business side and IT—and the maintenance of consumers’ trust. Telcos need to zero in on the most promising business models, capture the relevant data, and use that data in ways that allay privacy concerns but also get the word out that telcos can be key players in big data and analytics.

These and other key insights from TeBIT 2016 will be presented on October 14 by Thomas Krüger, an associate director at BCG, in conjunction with the benchmark’s official release at the ETIS Community Gathering. This year’s event, themed “Delivering the Digital Transformation Promise,” is hosted by Croatian Telekom at the Esplanade Zagreb Hotel and brings together 165 participants, 70 % of which are telcos, all willing to share best practices on key information and communication technology (ICT) issues and trends facing the telecom industry.

In addition to the benchmark results, this year’s TeBIT report features three interviews with telco executives, providing an inside look at—and insights into—specific IT and big data and analytics strategies. Indeed, that spirit of information sharing is the hallmark of the TeBIT studies. By openly sharing data in order to encourage discussion and exchange of knowledge, telcos can both gauge their own performance and help steer the industry forward.

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