Big data monetisation is the fastest-growing challenge facing the telecommunications sector.
This is according to an international survey of leading executives in the sector conducted by Experian. Churn, customer experience and reducing fraud are also among the key issues and challenges facing the sector in the lead up to 2014, says Experian.
The survey was conducted among 80 senior executives from 45 telecommunications companies in 22 countries, including SA.
It emerged that the number of respondents citing big data monetisation as a major challenge for telecoms operators has increased by 150% compared to 2012, making it the biggest riser compared to other challenges.
Some 37% of respondents said end-to-end customer relationship management is their most significant business challenge. This is unchanged from 2012, suggesting the issue remains a tough one to solve.
Meanwhile, 32% of respondents said reducing churn was the most critical factor in improving margins (compared with 26% in 2012).
Selling additional services to existing customers was also identified as important (29% versus 19% in 2012). Winning profitable customers (24% now, compared with 21% in 2012) is also a priority, highlighting the move away from a pure revenue view of the world to incorporate average margin per user and customer lifetime value.
Almost two fifths (37% in 2013 compared with 30% in 2012) of respondents said improving the quality of decision-making throughout the customer life cycle will provide the greatest benefit to their organisation, along with using external data to enhance their understanding of customer value relative to their potential risk.
Some 10% of respondents felt combating fraud posed a growing challenge in the run up to 2014, and 7% said automating a greater proportion of customer decisions and interactions continued to be of importance.
"We agree with the findings of the survey," said Antonio Valasquez, corporate risk director at Telefonica. "Our experience tells us that concerns around reducing churn, improving customer experience and developing cross-sell opportunities are very closely interrelated.
"The pressures of market saturation, combined with the drive to reach new customers and improve profitability, means telcos have to rethink substantial elements of their strategies. This demands not only self-criticism, courage and effort, but also new and better customer information, analysis and insights."
Michelle Beetar, MD at Experian SA, says: "One of the key areas highlighted was end-to-end customer relationship management - from originations right through to collections. Collection of overdue accounts and recovery of unpaid debts, in particular, is a key focus for local telecoms companies."
Beetar adds that many South Africans face increased financial stress and continue to rely on credit to meet their general living costs. Deteriorating credit health of South Africans is on the rise with the number of impaired accounts having increased during previous quarters and evidence of increasing default levels on unsecured credit, she notes.
"These trends have resulted in local telecoms companies finding it challenging to collect overdue accounts. It highlights the need for an effective strategy to determine which customers are likely to default in the longer term, which is not only necessary for maintaining long-term profitability, but also for improving customer service and lowering attrition," she concludes.
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