Infonetics: Countering the OTT onslaught with subscriber data

Shira Levine

Shira Levine, Infonetics Research

We may all be sick of the phrase "dumb pipe"--as in, "how do operators avoid becoming one?"--but that doesn't mean the question has necessarily been resolved.

If anything, operators are more concerned than ever about how to remain relevant as the over-the-top (OTT) players continue to broaden their scope. 

A few years ago, the holy grail seemed to be the concept of API exposure, in which the operator makes network assets such as location, messaging and presence information available to third-party developers; the idea was that these assets were unique to operators, enabling them to charge third-party developers for access to those APIs while offering subscribers richer, more innovative services.

The problem with that strategy? Smartphones are getting smarter, which is gradually eroding the value of many of those assets. Application developers can now gain information on location, presence, contacts, device specifics, etc. from the smartphone itself, and in many cases they prefer to work directly with the device app stores rather than with the operators, despite telco initiatives like OneAPI that aim to enable a more developer-friendly environment.

As a result, we've seen a groundswell of interest among operators in identifying new assets that they can expose and potentially monetize in order to differentiate themselves and prove their relevance--and that's where subscriber data comes in.

Operators have been talking longingly about better leveraging subscriber data for years now, but concerns around privacy and regulatory restrictions, as well as the challenges around consolidating their multiple "silos" of subscriber data, have kept most of them from really developing a strategy around subscriber data brokering.

However, today big data is big news, and operators are increasingly recognizing that they're sitting on a virtual gold mine in the form of subscriber information.

A few of them have begun testing the waters when it comes to brokering subscriber data. Both Telefónica and Verizon, for example, have launched initiatives to sell aggregate and anonymized subscriber data to third parties, and AT&T recently indicated it had similar plans. We believe that as these projects gain traction, and other operators are able to gauge how these early movers have managed to navigate challenges such as privacy concerns and whether they've generated enough revenue to justify the initiatives, we'll see more such leveraging of subscriber data.

In a recent survey that Infonetics conducted in conjunction with TM Forum on operators' subscriber intelligence strategies, 44 percent of respondents--the majority of which were mobile operators--indicated that they plan to make subscriber information available to third parties, with content providers, mobile marketers and advertisers the most likely entities, and we expect that number to increase over the next few years.

As that occurs, we're anticipating a more sophisticated approach to subscriber data beyond selling access for mobile advertising. Identity management, for example, represents an alternative way for operators to broker subscriber data by assuming the role of identity provider for third parties such as over-the-top providers or app developers, enabling them to authenticate users based on the operators' identity data. The GSMA recently jumped on that bandwagon by introducing the OneAPI Exchange, a single platform that is standardized across multiple operators and provides a standardized API for identity management.

I also believe operators have a real opportunity to leverage subscriber data to support innovative B2B2C services. One of my favorite examples of how subscriber information can be brokered to third parties to create a better customer experiences is from several years ago, when my family took a weekend trip to Sesame Place, an amusement park in Pennsylvania targeted at the under-four set. As my husband and toddler and I drove around looking for a reasonably close parking spot, spent close to half an hour trying to hunt down my sister and her kids in the park ("turn left at the Elmo" wasn't the most helpful of directions) and tried desperately to find a kid-friendly restaurant without a long wait for dinner, I couldn't help but think that subscriber information from my operator--basic location information combined with information on my contacts, my preferences and perhaps my browsing history--could have enabled the venue to improve my visit, thus encouraging me to spend more money at the overpriced gift shop and return the following year.

Another potentially interesting way for operators to capitalize on subscriber data is in the machine-to-machine (M2M) space, where customers may actually pay for their data to be used. A compelling presentation that I saw recently discussed services that incorporate "user context," or data collected from non-human subscribers that is then aggregated and analyzed, such as a health assistance service for seniors that leverages input from various devices in the home to determine whether a subscriber is in any type of medical distress. The operator could insert itself into this opportunity by exposing any relevant "context enablers" to third parties, by storing, analyzing and sharing data gathered from devices and/or by providing some M2M services directly to its customers.

The catch to all of this became painfully apparent last month, when it came to light that Verizon had been sharing subscriber metadata with the National Security Agency. Privacy concerns remain alive and well among consumers, and if an operator wants to assume the role of subscriber data broker, it must be able to assure its customers that it can respect and protect their private information. Operators need to a) implement opt-in controls that allow subscribers to manage how and when their information is shared, and b) provide subscribers with truly compelling and specific reasons to opt in, rather than simply promising a better experience. My loyalty card from my local supermarket may mean that the store can then leverage my purchase information in aggregate to better design their aisles and displays, but that's not why I scan it every week at the register--I want the discounts and the personalized coupons.

The NSA debacle notwithstanding, operators have a strong trust relationship with their customers; the most recent Edelman Trust Barometer found that 62 percent of consumers say they trust their telecommunications service provider a great deal. The combination of that trust with the trove of subscriber data that resides within the network and IT systems may well be the holy grail when it comes to adding value to the pipe.

Shira Levine is Directing Analyst for Service Enablement and Subscriber Intelligence at Infonetics Research. Drawing on 20 years as a telecommunications analyst, professional journalist and marketing executive, Shira is one of the most widely recognized experts in the fast-changing OSS, billing and service delivery platform space. Twitter: @shiralevine

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