Untying the provider Gordian Knot for cost-effective customer experience
The customer is king. However, when it comes to telecommunications, the customer certainly shops around, bargains and looks for the most value for every dollar, euro, yen and rupee. Just look at the hard numbers:
- Global mobile or wireless services revenue is estimated to grow at an anemic annual rate of 2.3 percent until 2019.
- Global fixed line—voice, broadband—revenue is doing worse, estimated to drop at the annual rate of 2 percent until 2019.
Where is all the revenue growth going? For starters, TV and video revenue from over-the-top content (OTT) services around the world is expected to be $51.1 billion in 2020, doubling the $26 billion revenue in 2015. And that reason is not even the biggest source of revenue loss or cannibalization for telecommunications operators. The telecommunications industry is expected to lose a combined total of $386 billion in voice revenue between 2012 and 2018 to Skype, WhatsApp and other OTT providers.
Telecommunications operators are faced with the seemingly impossible task of investing billions of dollars into new technologies such as fiber to the home (FTTH) for fixed-line, 4G LTE and 5G networks for mobile to improve the customer experience. And the fiercely competitive revenue base continues to stagnate and shrink.
The situation reminds me of the story of the Gordian Knot from Greek mythology. Alexander, the great Greek emperor, came upon an oxcart tied to a post in the palace at Gordium, a province of the Persian empire in 333 BCE. The cart was tied with an intricate knot. According to prophecy, whoever untied the Gordian Knot would rule over all of Asia. Many had tried and failed because they couldn’t find the ends of the knot to untie it. When Alexander could not find the ends of the knot to unbind it, according to one version of the story he sliced it in half with a stroke of his sword, which produced the required ends allowing him to successfully untie the knot.
Can telecommunications operators learn from this centuries-old tale to solve their own Gordian Knot of shrinking revenue amid increasing capacity investments required to maintain and improve the customer experience?
Orange, a French multinational telecommunications organization, is deploying IBM Watson cognitive computing capabilities to solve its Gordian Knot. It is leveraging knowledge from prior customer care calls to anticipate future customer needs and deploying IBM Watson Virtual Agent—formerly IBM Watson Engagement Advisor—to enable customers to receive answers for highly common questions through self-service. The solution helps reduce expensive calls with live agents in call centers and stores. As a result, customers are happier because they don’t have to wait for a call center agent, enabling them to get the answers to their queries faster.
Savings from the care costs can drive capacity investments to maintain and improve customer experience. As Orange embarks on a new business venture, Orange Bank, it is well positioned to benefit from cognitive computing to drive the new 100 percent mobile banking service in France.
Smartfren Telecom, based in Indonesia, faced its own version of the Gordian Knot, having the majority of its customer base in a prepaid segment with no contracts in a fiercely competitive and price-sensitive telecommunications service market. With the proliferation of smartphone apps, devices and network—2G, 3G and 4G LTE—technologies, measuring and improving customer experience at the individual subscriber level was highly challenging. Smartfren is deploying IBM Customer and Network Analytics to track and help improve the customer experience from network infrastructure all the way to the subscriber’s device and even individual smartphone apps. Smartfren can prioritize its network investments to maximize the impact to its subscribers, helping improve loyalty and revenue.
Massive networking opportunity
Many of you were on hand at IBM Insight at World of Watson 2016, the big data, analytics and cognitive computing conference attended by thousands. We shared these and other compelling stories from communications service providers around the world.