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Will ‘Big Data’ = Big Business for Telefónica?

by Nitesh Patel | Oct 12, 2012

Mobile operators like to talk about the wealth of information they have about the users on their networks. Brian Smith, director of Product Development at Sprint termed this data as "crude oil" in an m-commerce webinar I co-presented.

Operators have access to demographic and behavioural data of postpaid customers, including gender, age, and address for the former. For the latter operators know the location of customers each time their phone interacts with the network, call records for which numbers and locations they call or text, and how actively the user engages in data services. Prior to the rise of smartphones and OS controlled browsers, operators also had a clear view of which mobile sites most of its users were accessing.

Much of this customer information has been used by astute operators to understand customers and to provide appropriate levels of service. It has also helped smarter operators to target relevant products and services to specific user segments. Collecting the data has never been a problem. The main challenge remains aggregating, refining and analysing relevant data from separate silos across its business so that the information is useful.

On 9th October 2012 Telefónica announced the launch of a new division, Telefónica Dynamic Insights, which aims to sell anonymous data about its customer base to third parties. “Smart Steps” is intended to be the division’s initial product. It is aimed at retailers and will provide “heat maps” of its users on a real time basis through the day. Leveraging GFK’s retailer relationships clearly makes sense as the division reaches out to new customer segments.

It’s refreshing to see Telefónica moving forward with ambitions to become more than a smarter pipe, particularly as operators need to expand revenue streams in order to mitigate the decline of the core communications businesses. However, even if the crude oil can be refined some key questions need to be answered before the real value provided by the Dynamic Insights division can be assessed:

 

  • Who will be the main customers for that information? Retailers are the clear target for Smart Step, but what other data sets will emerge, and how long is the tail for this type of analysis? In future I suspect we will see products built around profiles of customers, the types of devices users own, the services they use and users’ data usage patterns, among others.
  • How attractive is customer data from a single operator to potential buyers? On 11th October Telefónica acknowledged the need to extend its operator billing efforts to other operators by announcing Telenor would make its billing APIs available to BlueVia. Customer analytics clearly needs to also open up beyond the single carrier in a country, even if it does have a global footprint.
  • Competition and fragmentation risks? Competing operators ma y follow with similar products and partner with other providers of consumer information, such as Experian and Springboard, leading to fragmentation and complexity for buyers.
  • Is operator location accuracy sufficient to provide true value to those customers? Momentum is clearly growing behind improved data granularity and indoor location, as highlighted by the formation of the Accurate Mobile Indoor Positioning Industry in August 2012. Initiative such as the Zonal Presence Service, created by the Small Cell Forum, and supported by Aepona starts to become more relevant for operators to address the accuracy gap.

 

 

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