How will the telecom industry adapt to digital mobile consumers?

This guest blog post comes from Satya Ramaswamy, who is global head of digital enterprise at Tata Consultancy Services. It looks at how the telecoms industry is being impacted by the fact that mobile activity is becoming the norm in the digital age.

The new digital mobile consumer is on the rise, but what does this mean for the telecoms industry?

By Satya Ramaswamy

“For many consumers around the world, mobile devices have become one of life’s basic necessities, and this passion shows no signs of abating. Over the last decade, consumers have purchased smartphones and tablet computers at an astonishing rate. The iPhone took only eight quarters to ship more than 20 million units following its launch in 2007. In 2010, that adoption rate was eclipsed by the iPad. Two years after it began shipping, Apple’s tablet passed the 65 million unit mark – an adoption rate three times that of the iPhone.

Digital disruption

Consumers’ love affair with mobile devices is not likely to fade away soon. As devices become ever more powerful and as wireless transmission grows in bandwidth and coverage, the adoption rate is likely to only climb further.

The telecommunications industry recognises the importance of digital and mobile consumers, and is taking a leading stance across consumer-facing industries. In The New Digital Mobile Consumer report, commissioned by Tata Consultancy Services, telecoms companies have identified that 48% of consumer purchases are currently being made through mobile devices, and they predicted this will rise to 60% by 2015.

Indicating the scale of this commitment, last year the telecommunications industry was the sector which most significantly adapted its products and services to meet the needs of digital mobile consumers. The sector is expected to maintain its mobile leadership through 2015. During the period 2012 to 2015, telecoms firms will be the second highest spending of all industries, with the $28.6 million spent per company in 2012 rising to $35 million in 2015. However, other industries expect to close the gap over the next three years. 

Changing the culture of telecoms

Recognising that the digital mobile consumer is a critical audience segment, there are significant decisions to be made within the telecoms sector. The industry clearly knows this and its understanding of these customers will have a significant effect on which firms become leaders and which laggards.

One way that telecoms providers can increase their customer ‘stickiness’ is by providing analytics on the consumer’s telecom usage by leveraging Big Data technologies. This large-scale number crunching can now be boiled down to the individual customer level. We call this trend the enterprisation of the consumer. It is in the early stages, but we see it as a way in which companies can build their relationship with the most valuable consumers.

It seems certain that this trend will evolve rapidly – the data and technology certainly exists. Cultural change within these organisations is more likely to lag behind, but it will follow. Attitudes to customer insight and associated product and service development are going to have to shift. In fact, telecoms providers will need to make big decisions about the technology and process they implement now. As we have seen previously, waiting for a technology to become mainstream before investing in it isn’t an option in such a hugely competitive market.

Harnessing smart technology

With significant levels of consumer purchases made through mobile devices, firms should plan to continue to drive greater functionality to mobile devices. Despite the needs of the digital mobile consumer changing rapidly, telecoms providers can plan ahead.

Trends are clearly emerging. Today’s smartphones and tablets endowed with context sensors such as cameras, GPS technology, compasses, and accelerometers are helping companies transform their connection with consumers into anytime-anywhere contextual interactions. Having the flexibility to create new products and services which reflect these in-demand technologies will be a determining factor in success within the industry.

The most obvious outcome for successful telecoms firms will be a stickier relationship with their customers. In real terms, this means utilising the increased data that digital mobile consumers share to produce services which create brand lock-in. We expect to see firms better understanding their customers’ needs, and so giving greater functionality on mobile devices alongside more targeted products and services. This type of informed and adaptable relationship will make firms highly appealing to existing and prospective customers alike – and ultimately will turn the digital mobile consumer into an exciting revenue stream.”