Smarter market segmentation and services could help telecommunications service providers reverse their declining revenues, says Shlomi Moscovich, VP MEA at Amdocs.
Moscovich says South African operators face the same challenges impacting operators across Africa and the globe. "It's a simple thing - their revenues are being eroded. All of them are struggling to find ways to transform from being a bit pipe, and to give the customer more value," he says.
With consumers becoming accustomed to ample high-speed data as a commodity, and over-the-top players seeing the real returns on data-based applications, operators are finding it increasingly difficult to achieve returns on their network investments, he says.
"The questions they are asking are - how do we maintain ARPU [average revenue per user], what are the next growth engines and what are the next killer solutions we can sell to customers? At the same time, they face the challenge of optimising their current investments in high-speed networks without degrading service and driving customers away as a result."
Moscovich notes that Amdocs works with over 260 top telecommunications operators around the globe, and sees common threads in their approach to overcoming the challenges. "One area that international telcos are slowly starting to address, which South African telcos have generally neglected, is the small and medium enterprise (SME) market," he says.
SMEs are a growing sector, Moscovich says. With the SME class ranging from plumbing firms to lawyers and doctors' practices, he points out that these businesses are not classified as enterprises, but they do have the potential to be high value clients.
"They want to be treated differently - they buy data bundles and cellphones, and have specific requirements like virtual IP switchboard, on-demand video conferencing facilities and cloud storage and apps, for example. This market is uncharted territory for most operators in the world."
Taking a different approach to various market segments can also help operators optimise their network investments, says Moscovich. "One interesting area presenting the potential for network optimisation is the investment now being made in LTE in South Africa," he says.
He notes that with around 50 million mobile subscribers in the country, but a relatively small proportion using LTE at this stage, operators have to opportunity to move high value users to the LTE environment, so freeing up 3G spectrum and moving low-end users off the 2.5G network and up the value chain. This would optimise network use, cut costs, and drive new users to become high volume data customers, he says.
Overcoming the challenges and embracing new market opportunities requires a combination of tools and strategies, says Moscovich. "For example, big data on its own has little value. The operator may have a wealth of information about customers - but the value is realised only when they are able to manage this data in a smart way. They need real-time network insight and big data engines powerful enough to give real time recommendations, and advise on strategies to optimise network use. In addition, they need telecoms-specific knowledge about what to analyse and why, and how to apply the insights to the telecoms sector."
Moscovich will address the upcoming Amdocs Africa Business Summit in Pretoria on the challenges and opportunities facing the local telecoms sector, as well as strategies for growth. For more information about this event, click here.
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