Industry Solutions > Communications, Media & Entertainment

Analytics in Next-Generation Telecom Services Competing in Adjacent Markets with Data-driven Analytics

By Sundara Raman Communications Industry Consultant Teradata Australia Pty Ltd. Analytics in Next-Generation Telecom Services

Table of Contents

Overview 2 Overview Introduction 3 Recent advances in the information, telecommunication, and What are Next-Generation Services? 4 Internet technologies have been causing greater disruptions to the What is Next-Generation Analytics? 5 Communications, Media, and Entertainment industries compared How the Landscape Will Change 6

The “Right” Business Model 7 with the slow and evolutionary changes of the past. For example, it

Analytics for Next-Generation Services 12 took the telephone 35 years to reach 25 percent market penetration

The Teradata Solution and Benefits 16 in the U.S., the PC 18 years, the mobile phone 15 years, and the

Conclusion 17 Internet seven years.1 Yet within six years of its launch in February About the Author 17 2004, facebook.com has more than 500 million users2 who share information, pictures, and video content with “point and shoot” digital cameras integrated with mobile phones.

As the video content and quality on the Internet grew in popularity, the growth of broadband networks to support it has expanded dramatically. In Japan, Korea, the U.S. and several other countries,3 fixed-line broadband penetration has reached close to 100 percent.4 And mobile penetration itself is in excess of the population of several countries. Mobile Internet penetration is dramatically increasing driven by 3G network upgrades to 3.5G/4G, smart phones, netbook/notebook dongles, and affordable prices which have exerted downward pressure on bundled triple-play fixed-line networks.5

1 “The Wireless Internet and Mobile Commerce: The Second Internet Revolution,” Commonwealth Associates (October, 2000). 2 “Operators must ‘tune’ networks to cope with cloud services uptake – BT,” Total Telecom (October 28, 2010). 3 “Monthly IPTV Bulletin,” MRG, Inc. (October 2006). 4 “Asia tops in broadband speed, quality,” Telecomasia.net (October 18, 2010). 5 “European monthly broadband prices down €5 during 1H,” Total Telecom (August 25, 2010).

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Business models are changing more Despite disruptions in the industry and Introduction rapidly than consumers’ readiness to rapid advances in technologies, services, In the 1960s and 1970s, the telecommuni- cope with the technological change. and business models, the communication cations service providers used celluloid The traditional theatrical “movie release service providers (CSPs) are still using photographic equipment to capture the windows” are collapsing, and this is paving traditional metrics to measure their per- images of analogue subscriber meters at the the way for multi-fold increase in revenues formance with very little analytics per- telephone exchange as part of their billing for DVD sales/rental, pay-per-view and formed behind such measures. With the function. Today, the digital camera that is video-on-demand.6 CSPs now facing competition from an inherent part of the mobile phone is adjacent markets, they need to rethink The traditional service provider market used for an entirely different purpose – how they measure and demonstrate value is being rapidly disrupted – Cable TV customers use the mobile phone camera to both within their business and to share- providers are offering voice and high- capture events and can communicate them holders.8 According to Thomas Davenport, speed data; Internet service providers instantly with their social network of Distinguished Professor of Information (ISPs) are providing voice over IP (VoIP) families and friends in any part of the Technology and Management at Babson and IP video services; telecom service world in a few simple keystrokes. (See College, and Jeanne Harris,9 Executive providers are expanding their broadband Figure 1.). Mobile phones are also used as a Research Fellow and Director of Research DSL networks to FTTH (Fibre-to-the- payment device for ordering anything from for the Accenture Institute of High Per- home) to offer triple-play services; and a movie ticket to purchasing their favourite formance Business, leading companies are broadcasters are partnering with ISPs to CD or books by simply selecting a conven- doing more than just collecting and storing offer video content to PCs and TV screens ient payment method, such as charging to information in large quantities. They are on demand. This is evident with the IPTV their phone bill. now building their competitive strategies competition from Verizon, AT&T and around data-driven insights that are, in The past 30+ years have seen revolution in PCCW which is now firmly being felt turn, generating impressive business results. information and communications tech- among dominant cable TV and satellite nologies that not only enabled affordable TV companies. Verizon and AT&T added This paper discusses the impact of conver- broadband access to mass consumers but FiOS TV (Fibre Optic Service) and U-verse gence on the future of the communications, have also provided the service providers subscribers, with their gains closely media and entertainment industries and matched by the churn from the seven examines how CSPs may leverage the largest Cable operators (Comcast, Time opportunity to create compelling cus- Telecom Telecom Warner Cable, Charter, Cablevision, tomer experience by developing an Yesterday Today Mediacom, Insight, and CableOne).7 enterprise perspective with a focus on analytics for the next-generation services.

Technological Revolution

6 “OTT Video Services & Forecast,” MRG, Inc. (August, 2009). 7 “Video Services Sector Analysis,” OneTrak report (August 22, 2007). 8 “What do transforming telcos measure,” Ovum (2010). Figure 1. Technological Revolution in Telecommunication, Information and Entertainment. 9 Thomas H. Davenport; Jeanne G. Harris (2007), “Competing on Analytics: The New Science of Winning,” Harvard Business School Press.

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with additional revenue opportunities networks, and content and the there is general understanding that next- ranging from simple voice services to complexities involved in delivering generation services encompass seamless complex content and mobile commerce communication and entertainment communication and media consumption services. However, use of traditional services. experience for the customer through metrics, such as Average Revenue Per User > The need for advancing the concept of leveraging high-speed broadband networks, (ARPU), Minutes of Use (MOU), Count subscriber to integrated view of the smart devices, and media rich content of Customers, and Churn (i.e., adds, customer across networks and devices. irrespective of whether the communication disconnects, transfers, migrations) seem to network is fixed, wireless, or mobile. > Better analytics and enterprise intelli- be the norm with little emphasis on mHealth, mCommerce, machine-to- gence will lead to context-aware and sophisticated customer experience meas- machine, and ‘service in the cloud’ are all personalised customer experience that ures across fixed-mobile networks aspects of the value-added services for the can deliver powerful and lasting com- conformant with the transformation that next generation that CSPs are launching in petitive advantages. is taking place simultaneously in fixed, various markets. mobile, broadband, and media entertain- What are Next-Generation As a result of attractiveness of the content ment services. Services? provided by the ISPs and enabled by the We will examine these key aspects: While it took some time to reach consensus freedom of the Internet, customer behav- > Dramatic changes in the landscape over about the definition for value added services iour is expected to transcend a network the next few years with ever-increasing (VAS), there seems to be no single defini- controlled by the CSP (i.e., Managed availability of next-generation devices, tion for next-generation services. However, Network) to the ‘unmanaged’ Internet (also

Telecom Today Telecom Tomorrow Bundled Services Converged Services

Name: Mobile Customer Account No.: 61-800-800-800 Billing Period: 1 Oct – 31 Oct 2002 Television Time Charge Date hh:mm:ss Event Description Amount Mon. 7 Oct 2002 10:22:30 Data usage: 3.65Mb Sent; 12.5Mb Received $9.25 Wed. 9 Oct 2002 15:13:00 Diet Coke: 2 Bottles ($1.25 each) $2.50 Wed. 9 Oct 2002 21:52:10 Movie Ticket for 4: Receipt#ZX64362A $26.65 Seamless Personal Fri. 11 Oct 2002 8:25:15 Weather Report: Ski condition $1.50 Customer Computer Sun. 13 Oct 2002 11:15:00 Data usage: 1.20Mb Sent; 8.0Mb Received $7.40 Experience Thu. 17 Oct 2002 12:05:15 MMS Photo Messages $3.35 Sun. 20 Oct 2002 14:10:45 Share trading fee: Ref#SP858780 $22.10 Sun. 20 Oct 2002 20:22:25 Simpsons Logo download $2.20 Tues. 22 Oct 2002 7:09:35 Music album Singles $7.99 Fri. 25 Oct 2002 15:19:05 Friends and family voice chat (2h14m) $2.75 Mobile

Digital goods purchase Commerce Data usage Voice usage

Figure 2. From Bundled Billing to Converged Customer Service Experience.

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known as over-the-top). Such a customer behaviour can be described by the concepts OPERATIONAL INTELLIGENCE of time shifting (Prime Time vs. My Time), ACTIVATING Align MAKE it happen! place shifting (“I decide where I want to OPERATIONALIZING WHAT IS happening now? watch.”) and media mobility or device STRATEGIC INTELLIGENCE shifting, (“I decide how I want to move and PREDICTING WHAT WILL share media between different devices.”). happen? ANALYZING Automated WHY Linkages did it happen? As a consequence of the changes in cus- REPORTING Link to WHAT Operational Accelerate happened? tomer behaviour, customers are more likely Systems Predictive Models to churn. CSPs can, however, retain and Batch Ad Hoc, Ad Hoc grow their customers by investing in next- BI Tools Analysis Batch Continuous Update/Short Queries generation technologies and rich media Reports Event Based Triggering content partnerships. CSPs can also provide Data Sophistication seamless customer experience across fixed Figure 3. Teradata Active Enterprise Intelligence™ Strategy for Next-Generation Analytics. and mobile networks by means of analytics on customer behaviour to provide relevant content and services that are perceived as and proactively manage service experience One of the top CSPs in India, Bharti Airtel, valuable to them. and customer retention across the enter- remains firmly focused on identifying prise rather than the specific product and opportunities to roll out value-added What is Next-Generation services in isolation. services as it is very difficult to have a Analytics? sustained competitive advantage on price. The CTO of Pacnet, a telecom and Internet China Unicom is looking to machine-to- It is natural for product managers of CSPs provider, asks, “Do you know who your machine for a new source of subscribers, as to be interested in how well their new customers will be five years from now? mobile penetration reaches saturation point products and services are performing after What are the bread-and-butter products in some of China’s cities.12 launch. This is often measured by looking versus cutting-edge products? Who will you at “What happened?,” while it is useful for partner with?”10 The consulting firm, Ovum, has identified them to know customer take up rates and ten core metrics that will enable the Telenor, which has operations in Europe revenue per product and services, it will transforming telco to demonstrate that it and Asia, believes ARPU is not the most also be useful to know why the service take is on the right path in the face of com- important measure of performance when up has been poor or why it went well. This petition.13 Ovum believes innovation, it comes to navigating intensely competitive can be determined using analytical meas- customer experience, and efficiency are markets.11 You need to look at the price ures. Even more important is the desire and key dimensions of the metrics for next- per minute, and weigh it against the cost ability to predict “What will happen,” so generation telcos. that they can predict customer behaviour per minute.

10 “Don’t wait for NGN,” Network Strategies 2010, TelecomAsia (October, 2010). 11 “Telenor, Bharti share secrets of success in India,” Total Telecom (November 18, 2010). 12 “China Unicom looks to machines for new subscribers,” Total Telecom (November, 19 2010). 13 “What do transforming telcos measure?,” Ovum (June, 2010).

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Reporting, analysing and predicting are phone as a multifunction device. We is the logical next step, and we are seeing usually broad activities, taking place over expect our technology to provide commu- the introduction of a variety of portable an extended period of time, with the goal nication at a distance as conveniently as user devices such as smart phones and being improvement of the long-term we communicate face-to-face. At the same small portable computers that have performance of the enterprise. Opera- time, the media and entertainment wireless (i.e., 3G and WiFi) connectivity. tionalising and activating represent a industry is on the threshold of a revolu- Furthermore, connectivity and conver- CSP’s ability to conduct ‘Operational tion with implications that reach to the gence of services across fixed-line, wireless, Intelligence’ based on an active data core foundation of their traditional and broadband networks is blurring the warehouse – the ability to see what’s business model. distinction in service delivery and shifting happening right now, and react to it in a Fixed-line and Wireless attention towards quality of service and smarter, faster way. These tend to involve Communications customer experience. “smaller” decisions than much of the Role Reversal strategic analysis, but these decisions are Device Proliferation It’s interesting to consider the develop- made almost continuously across the Challenges ment of telecommunications technologies organisation – and have the ability to drive Wireless architectures are often quite over the past century and to note that real value in a short period of time. complex. Device limitations and network fixed-line connection has been the norm constraints add another layer of difficulty. Aligning and applying Strategic Intelli- for communications for most of that time Form factor complexities, new communi- gence must be the first goal of a program in telegraph and telephone services, cation, and client/server protocols, and to activate intelligence in an organization whereas, for broadcast information (for device nuances become even more chal- (See Figure 3.). It’s about taking all those example, television and radio), wireless lenging as manufacturers rollout all types deep insights and forward-looking goals transmission has been the usual method. of new fixed and portable devices with and applying them to the operational In the past few years, this arrangement has connectivity to the Internet (e.g., TV; set systems so everyone – people, processes, been dramatically altered. Both television top boxes; game consoles; smart phones; and systems are all aligned. In the wake of and radio are frequently delivered to the and tablet computers). next-generation services, the next goal, home by hard wire (for example, coaxial

“accelerate” will be achieved when the cable and now through Digital Subscriber The landscape will further change over the enterprise can not only align everyone but Line [DSL]/Fibre-To-The-Home [FTTH] next few years in the following ways: make the systems as fast as required to broadband networks) whereas voice, data, make a business impact at the right time. and entertainment communications are Always on networks rapidly shifting towards wireless delivery. > Data services will drive large volumes How the Landscape Will of transactions. Anytime, Anywhere Change > Always On networks will require always Connectivity the Norm available applications and services; Today, our desire for immediate satisfac- With the rapid expansion of mobile phone otherwise it has no meaning. tion in conveying our message is growing usage, we have become accustomed to the exponentially. Instant gratification and idea of any time, anywhere connectivity. > Personalisation and identification are moment sharing plays a key role in Expansion of this idea to include the full an essential part of data services. inspiring use and adoption of a mobile range of information and content services

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Enhanced device features and functions > Colour, video, and enhanced Video Consumption Full-length movies/TV shows News Short clips

100 Movie trailers Other navigation. TV clips Music videos Movie trailers Other > Superior performance. Sports highlights UGC TV clips > External device interfaces (e.g., barcode Live sports Music videos Movie trailers 80 TV clips Sports highlights scanners, camera, medical instru- Local news Music videos ments). UGC

National news Live sports > Mobile phone as a payment device. Sports highlights 60 Local news Family/children

All IP (Internet protocol) networks Reality TV National news UGC > Open standards compliance. Family/children 40 Reality TV Full movies Explosion of Multimedia Local news

Content Catalogue Full movies National news There is an evolution taking place in the 20

TV business. In the digital era, the value of TV shows Full movies integrating TV and Internet content is TV shows TV shows clear, but the form and functionality seem 0 TV Online Mobile to vary wildly. Over-the-top (OTT) is the Current viewing contents on the phone are limited to user generated contents term used to deliver video content over the and shorter clips, while most of contents viewed on TV are now available online. open Internet that is a ‘wide open, wild- Source: Bain consumer survey, ComScore (Jan, 2007) west’ business and technology concept that Figure 4. Video Viewing Trends by Device. is catching on very quickly and generally bypasses the traditional CSP from the Google-owned video site YouTube has customers directly access services they value chain perspective. paved the way for the launch of live desire. In many cases, customers get these The Apple® App Store has captured the streaming as a new chapter in its video rich services for free. attention of the world’s technology media service offering essentially competing with and for some has set the ideal template for PayTV and IPTV providers and wireless The “Right Business” the way in which wireless applications and services providers who have traditionally Model content should be offered. App Store end offered this service for a fee.15 Compelling In this changing landscape one critical users set up a direct billing relationship service experiences across TV, Web, and question remains for CSPs, “How will we with Apple and can make purchases from mobile screens align with the industry derive revenue and continue to grow the store over-the-air, by WiFi or by side- trend in multimedia consumption (See revenue from next-generation services?” loading from a desktop computer thus Figure 4.). It is evident that multimedia Clearly, the winners in next-generation bypassing the wireless CSPs that had been and entertainment content infrastructure services will be those companies that listen the gatekeeper for authorising third-party has become as critical as voice networks, to dynamic market requirements and access to their wireless subscribers.14 but the CSPs are being bypassed as

14 “A billion can be such a small number,” Telecom Asia (July 17, 2009).

15 “YouTube tests live streaming,” Telecomasia.net (September 14, 2010).

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adapt their businesses and technical infrastructure to meet these evolving Base On-Demand Revenue Incremental Revenue customer demands. Each individual service unlikely to be profitable stand alone The dilemma facing CSPs is this: Without Combination of services increases overall On-Demand revenue over 50% the use of a crystal ball they need to know which business model will win. They must Some services lend themselves to be combined (e.g. promos, advertising, recommendations) make infrastructure investments today that will directly impact their ability to com- Delaying service introduction will lead to lost revenue pete tomorrow. Often the CSP’s business Key: Baseline On-Demand Advertising Subscriber Group Services Loyalty Point Program Promotions Recommendations Additonal Touch Points Link to Physical Goods model tends to be steered by the con- Coupons Prepaid Vouchers Alternate Content Branding straints and limitations of infrastructure. Figure 5. CSP Revenue Growth Examples. The good news is that CSPs have the capability to combine different services on the largest group of consumers with the how CSPs can enable others to build a demand that will create highly profitable largest selection of compelling content and market for them – one with a level of rich- incremental revenues. (See Figure 5.). applications. This requires a flexible, open ness and diversity that they could never have There are several keys to making infra- technology foundation that can work with created by themselves – by proactively structure decisions that will put a CSP in any device and can be accessed by any providing the partners with all the tools the best position to win: third-party content partner. that they need to do the job. This will allow customers to vote with their feet to > Deploy a flexible, open architecture Today’s CSPs must prepare for the unknown. determine which services, applications that brings as many users together with Not many would have predicted people and content do and do not succeed. as many content providers as possible. would pay for ring tones, but those > Create value where you – and only operators who had the flexibility to react Create Value Where You Can you – can. earned quick profits, not to mention the CSPs will never be the dumb pipe of the > Share your wallet with your con- incremental customers as new consumers Internet as long as they can provide and tent/application partners. signed up for the value added services. charge for value-added services that they – Preparing for the unknown, however, and only they – can provide. Critical > Effectively manage service activities. is becoming increasingly difficult as the information, such as presence (“Is the user > Enable an integrated view of the plausible range of services grows expo- I want to reach currently on the network?”), customer. nentially with the introduction of high identification (“Is the user who he says > Provide multi-modal access. bandwidth, packet-based networks and she/he is?”), and location (“Where is the the seemingly daily evolution of devices. user?”), is required for many compelling Open Architecture That Predicting the next ‘killer’ application is applications, which only the CSPs can Connects Customers with difficult, but preparing for it is not. Failing provide as they have the ability to control Content Providers to do so will result in niche applications the network and customer experience (See Without a doubt, public data services is a serving discrete market segments, an unwise Figure 6.). This enables the CSPs to volume business that requires connecting strategy in a volume business. The key is maximise the total available applications

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and content that can be delivered to the their knowledge of the customer, they can current expertise of marketing handset consumer as well as allow them to mone- provide risk mitigation for third parties and price plans, and billing of subscription tise their information assets (i.e., location, while personalising relevant content for services, to becoming trusted intermedi- presence, identification) by delivering that their customers. Additionally, as the CSP’s aries who process and bill transactions of information to the application. service delivery platform (SDP) is the both low and high value on behalf of common interface for all of the serviceable merchants and content providers. For example, automated messaging devices, the operator can provide content notification applications, such as stock The term billing is self explanatory and optimisation services that would reduce alerts that are time sensitive and mission obvious. However, the telecommunica- development costs for the content providers critical, would be more useful if it was tions industry has gone through (and is and lead to lower operating costs for the known whether the person had their still going through) paradigm shifts in operator as content is cached and opti- phone turned on. If not, the application the process of building the appropriate mised at the edge of the network. will most likely choose an alternative business models to charge the user for channel, such as a telephone call to the Share Your Wallet with Partners services and to collect payments. What user’s land line. This information is Being able to charge for services is obvious was a simple process of billing the user valuable to content providers, and the CSPs as it is critical to an operator’s success, has become more complex by the need for with the right infrastructure can provide and the SDP should provide features to CSPs to purchase services from content and charge for this information. In addi- ensure value is extracted wherever possible. providers and merchants and complete tion, CSPs can provide other value-added However, it requires the service providers disbursement and settlement. “How do I services to the content providers. With to make a significant transition from their

Value Added Services = $ Is the user on the network? Used for time-dependent alerts Presence and targeted marketing

Who is the user? Identification Enhance the ability to provide content without application authentication enables pre-sales marketing Location Enhance user experience through custom home Where is the user? pages and groups Enable location-specific push Subscriber Management and pull of targeted applications Enable application and transaction-specific, pre- and post-pay billing Billing

Source: Sundaia Raman, ITU Forum, Hong Kong (2002)

Figure 6. Value Added Services that only CSP can offer.

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charge for a person-to-person, multi- means to easily adopt and drop content Enable an Integrated media message?” “How do I determine the provider services as well as to enable Customer View characteristics of receiving device and/or content providers to react swiftly by As Internet access diversifies beyond PCs network such that I can alter delivery altering their content offering. For exam- to smart phones, tablets, TV, game con- mode and price scheme according to ple, when uncertain about adoption rate sole, and other Internet-enabled devices, device/network capabilities? In a market of a new game, the CSP may offer the organisations face the challenge of staying where calling-party-pays is the norm, who gaming application as a free trial offer. connected with their customers, suppliers, pays for the value-added push services When the demand for the service and investors through an increasing initiated by the service provider’s push increases, the operator and content number of interfaces and technologies. initiator application? How can the growing provider may introduce a variety of Organisations focused exclusively on a segment of teenage and student users pricing options and payment methods to web-based architecture may find them- participate in device-initiated mCommerce suit the specific market segments. Also, selves cut off from increasingly mobile services if they don’t have credit or debit quality and consistency of content delivery users demanding new ways to receive and card accounts?” over the air interface is very important. interact with information. For instance, when a streaming audio is Flexibility in billing options is critical, and Unique identification and presence of the unsuccessfully delivered to the customer’s no business model has yet proven dominant customer as well as effective customer wireless device, a context-aware workflow in this unpredictable and highly fickle relationship management will therefore, function should recognise this and auto- market space. Additionally, the SDP can be a dominant requirement for successful matically resend the content or refund the provide the operator with the ability to adoption of mobile data services. It is not costs of the content by passing an adjust- offer controlled access to valuable customer simply enough to identify a customer by ment to the payment system. Such features information on permission basis. Many ownership of phone number or device would provide the best possible user application providers will pay for informa- number. For example, a multimedia experience by compensating for problems tion, such as presence, location, and user message (MMS) may be sent to another with content provisioning on devices. authentication, in order for them to mobile phone using a mobile phone By providing an open standards-based provide more compelling applications. number or sent as an attachment to email content provider management infrastruc- using email address. The customer may Manage Service Activities ture and tools, CSPs can create new access her home page from different devices The speed and ease of enabling the services ad hoc by incorporating dynamic such as the desktop PC and/or WAP content provider to provision their workflow processes from a repository of phone. Authentication of the customer in content and applications with flexible prefabricated function modules as well as a device-independent manner will be a content delivery, billing, and settlement by changing existing processes easily to critical design requirement. In some cases, services is key to the ability to get a large reflect customers’ new requirements such delegated authentication and authorisa- number of content providers onboard as free content trials, a flexible pricing tion of service will be required demanding quickly and as a result make the wireless model, and bundled services offerings. coordination of two or more users. For data services successful. Besides this, service providers may be able instance, the demographics of the prepaid to proactively deliver “push” notification market have shown a high proportion of Such a goal requires the CSP to ensure messages to customers on an opt in basis students and young people. This group of that their customers have the appropriate to stimulate transactions.

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The user session can span mulitple devices, giving the user options as to how they want to interact at each step.

Your electricity bill is Yes, pay $250 Why is there an Updated statement due, would you like to PowerCity equipment charge with adjustment. to pay it by Visa? and send full shown on my bill statement on 22nd March? to MyWeb page now. Mail out

Verify Transaction usage and adjustment payment confirmed

Figure 7. Multi-modal Access.

mobile users often does not have a credit existing investment in network intelligence, takes this one step further. Multi-modal card and in many cases, does not have a customer care and billing capabilities is a access will allow the user to come in bank account to pay for goods and key component to an overall strategy. through one channel, such as voice, and services. In order to overcome this prob- have the responses, services or content Provide Multi-Modal Access lem, some service providers offer a feature delivered back to the user via another User communities are constantly changing called shared wallet in their software suite channel, such as SMS or WAP Push for as devices and networks are evolving that allows peer-to-peer or parent-child example. This flexibility in user interaction rapidly. The market is essentially com- account controls to be established between and access is critical to making next- posed of many user communities grouped digital wallets. Parents can then directly generation services access pervasive, thus around specific devices, channels and pay for their children’s accounts or enable increasing its usage and associated rev- network capabilities; alignment of service teens to have time and value limited enues. It is interesting to note that the design with the unique capabilities of each account access. A CSP, by nature, has a American brokerage firm Charles Schwab service/channel/network combination is great deal of customer information and has noticed an increase in the number of challenging. tools at its disposal including customer stock trades among the retail brokerage account information, billing data, credit From the customer’s perspective, access customers who use both the Internet and history, usage information, and customer must be evolved to be ultimately multi- their mobile phones to receive Schwab device profiles. Next-generation services modal (See Figure 7.). While multi-channel alerts about stock prices. All elements of solutions must be able to draw on these means that the user will be able to access multi-modal service must be tied into the assets and leverage them in a fashion that the services using different devices and overall services management process to enables the service provider to derive a associated means – SMS, WiFi, mobile enable dynamic delivery of service based purposeful revenue stream and increase broadband, voice – multi-modal access on the customer’s profile and lifestyle. profitability. Leveraging a service provider’s

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One of the ways people describe TV versus and media and entertainment companies that the future is data driven. The CSPs computer experiences is with phrases ‘sit must deliver accurate forecasts and recognise that they must change from data back’ and ‘lean backward.’16 For example, planning with a more responsive supply marts, spreadsheets, access files, servers, when watching a movie or show in ‘sit chain and a cost-efficient operation. and legacy systems and consolidate their back’ mode on the TV, the customer may enterprise data into an active enterprise The digital supply chain will impact how like to share the experience with a friend. data warehouse. Information will drive CSPs distribute the content and applica- She may then pause the show and while decision making, based on fact rather than tions and the diverse needs of their sitting in the couch go online in ‘lean anecdote. The current approach to enter- customers, as well as address piracy, and forward’ mode to send a Twitter or prise data warehousing will need to move ensure payment of royalties and residuals Facebook message to a friend with com- towards an operational decision making to all parties. Not only will these changes ments about the show. environment, which means that people require an integrated view of the cus- throughout the organisation who interact tomer, but also an integrated view of the Analytics for Next- directly with consumers and suppliers can business and organisational services and Generation Services be empowered with fact-based decision products offered. making at their fingertips. Application and content are now considered Consider a consumer who is purchasing mission-critical services with demanding Understanding available inventory, cus- pay-per-view (PPV) and a DVD, views service levels for digital asset acquisition, tomer demand, and price elasticity from an trailers online, and downloads screen management and control. Content man- active data warehouse provides a frame- savers, ring tones, and video clips. Under- agement tools are required to keep pace work for optimising profitability. For standing customers’ behaviour will require with the scaling of the on-demand busi- example, an active decision-making a different level of information. ness environment, for video, and other environment will allow the CSP’s product forms of digital entertainment including To respond to these changes, CSPs must managers and third-party content providers music, games, pictures and applications. have accurate, consistent, cross organisa- to access product/service performance on a near-real-time basis. By being able to However, managing ingestion, validation tional, and timely data with appropriate forecast consumer demand and understand and transformation of various digital analytical capabilities providing a 360- price elasticity, they can adjust pricing or assets including video on demand (VoD) degree view of customers to deliver mass promotion appropriately on a per channel and advertising for distribution across TV, personalisation and customisation. or asset basis in near real time. PC, and mobile for compelling customer Customers are overloaded with informa- tion and choices, requiring CSPs to have experiences is a challenge due to the The degree to which prices are adjusted advanced knowledge of their preferences, requirement of multiple formats for the based on such attributes as title, episode, needs, and behaviour. same content while at the same time format, promotion, special edition, ensuring security and protection of the Data-Driven Business Model advertising performance, games, and assets from misuse. In fact, many media With the growing number of delivery channels will be determined by price and entertainment companies have been channels and formats, and a consumer elasticity and the variable cost structure of focused on generating revenues while with access to unlimited content, success- the specific digital asset. The goal is to neglecting the cost of operations. To be ful CSPs are recognising, more than ever, maximise sales at the maximum price successful in a converged market, CSPs possible. This tiered pricing strategy

16 “OTT Video Services & Forecast,” MRG, Inc., (August, 2009).

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Figure 8. Personalization and Customer Experience.

whereby maximum dollars are obtained guidelines and processes for data quality, measurement – the whys behind events, along each point in the demand curve which are critical to the success of their not just the whats. based on price sensitivity of the channel customer relationship initiatives. To make this happen, CSPs must shift or the consumer, will depend on efficient Data-Driven Service their discipline from connectivity manage- use of data. This will enable the CSP to Management ment to data-driven service management, allow differentiated pricing for their CSPs must strike a balance between the with data relating to anything from a customers who are willing to pay higher quality of video content, the availability customer device to an application, Web prices to download the most recent sequel of sufficient network bandwidth, the page, content, or message that spans of his/her favourite movie on the same efficiency of video encoding and encryp- across the network. day that it’s released. (See Figure 8.). tion techniques, the viability of final Because customers have many choices for Survival in the world of convergence customer experience, and the delivery of accessing service (e.g., WiFi, WiMax, will require bundling of services and traditional communication services. This Internet, mobile phone, computer, and products, cross selling, and up selling, requires creating an end-to-end integrated TV), connectivity becomes a commodity, requiring a closer relationship with the view of network performance as experi- which is precisely why operators must customer and an understanding of indi- enced by the customer. The CSP must turn their attention to data management, vidual subscriber preferences. augment transmission, access, and core with a focus on: switching functions with customer service The key requirement for the future is to level agreements (SLAs) and customer > Ease of use (clarity, quality, speed, keep the data fresh and to ensure that the lifetime value to the CSP. The improved availability, functionality). pricing models have the most accurate intelligence will empower CSPs to go > Ease of purchase. and current view possible, as well as fast beyond service monitoring and reactive > Ease of access. response time related to decision making service restoration to add proactive service for right pricing. But all of this begins with > Ease of management. assurance. It requires a process to fully getting information into the hands of understand the variables contributing Managing data in this way, and with these decision makers – at all levels in an organi- to network behaviour and experience goals, demands a tool that creates a single, sation. The CSPs are now establishing

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> Quality of Service (QoS) correlated with > Quality of Experience (QoE) high value customer analytics – e.g., > Mean Opinion Score (MOS) fixed-mobile network coverage readiness; dropped calls/sessions; traffic latency; Customer > Depth and Breadth of Choice locality > Personalisation and relevance of content > Behavioural segmentation > Ease of Search and Discovery > Media multi-tasking Interactive > Device analytics > Social currency Multi-Channel Product/ > Lifetime value Network Real-Time > Capped rate plan versus Service > Customer satisfaction Fair Value Accounting Personalised Simplistic

> Peak-period service mix usage analytics > Revenue recognition and liability reporting for optimised network investments > Customer profitability > Rate per minute/session analytics Financial > Fair ‘Cost’ of Access (ad-supported) > G/L posting versus granular consumption > Third-party service and profitability analytics of resources

Figure 9. Examples of Next-Generation Data-Driven Metrics.

integrated view of critical business and provides for an integration point of key what their experiences have been. Driving technical data (See Figure 9.). customer data that gives insights to the higher efficiencies in the back office alone model of handsets (smart device or not) will produce a favourable ROI. Perhaps This tool must also transform the data purchased in which geographic area, most important, however, the ADW into actionable intelligence that delivers where the most profitable customers are facilitates a deep, timely, and consistent new levels of transparency. This is the located, how they use their services, and picture of the entire ecosystem. strategy from which Teradata Corporation’s Active Enterprise Intelligence™ concept emerges (See Figure 10.). As the analytic Third Call Product/ Customers Logistics Executive Finance Marketing Parties Center Services hub for the business operations support systems (B/OSS) and network manage- OPERATIONAL INTELLIGENCE STRATEGIC INTELLIGENCE ment systems, the active data warehouse Workflow and Applications (ADW) integrates all relevant current and Business Intelligence Tools and Applications Active Access Active Events historical data into a single relational model in a single application-neutral Active Enterprise Integration repository. It rationalises inconsistencies in Active Active Active Workload data definitions and data values among Load Management Availability network equipment from various vendors. By eliminating the walls that exist between Teradata Data Warehouse OSS environments, the CSP now has an integrated and concise view of the capabil- ities available in the network. This leads to cost reduction by preventing overbuilding Figure 10. Achieving the Teradata Active Enterprise Intelligence™ Vision Using Teradata Active Data Warehousing Technology. and fully utilising all network assets. It also

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Simplified Control, Multiple automation enables the enterprise to react directly back to the content manage- Benefits to events that occur throughout the ment system. Strategic applications and the data found environment. Gartner first published their > Leverage customer interaction events in the enterprise data warehouse (EDW) definition of the real-time enterprise in from contact centres or third-party provide the technology necessary to October 2002 as: “An enterprise that sites to drive EBM through on-line make long-term decisions for the business. competes by using up-to-date information channels, enhance behavioural analytics. Applications of strategic decision support to progressively remove delays to the > Leverage on-line media consumption include market segmentation, product management and execution of its critical data to feed value and loyalty model- (category) management strategies, business processes.” ling and scoring. profitability analysis, forecasting, and The Teradata Active Enterprise Intelligence™ > Grow revenue through increased sales, many others. vision translates directly into improved loyalty, and product engagement. Tactical or operational decision making is efficiency in several key areas: > Reduce costs in customer care and a key enabler that allows organisations to > Leverage strategic intelligence data to dissatisfaction induced churn. evolve into Real-Time Enterprises. Tactical drive higher completion rate of on-line The benefits ripple out from there (See decision making provides assistance to sales and service transactions – reducing Figure 11.). Quality of customer experi- agents on the front lines of the enterprise costs and increasing the on-line revenue. whose actions reflect the implementation ence improves because a view of the entire > Use web interaction events to drive of a business strategy. Business process ecosystem allows you to integrate service event-based marketing (EBM) activity

Revenue + + + + Business Recording Least/Best Billing Partner Customer Value Validation Cost Routing Integrity Settlement Profitability

Customer Data While the business value Value compounds exponentially... Digital Asset of Partner EDW Data

Billing Data Value EDW Inventory Investment Data

Network Data Evolution to Enterprise View … the EDW investment only grows incrementally

Figure 11. Business Value of Enterprise Data Warehouse.

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creation with assurance and management > The Teradata Active Enterprise Intelli- Teradata Media and Entertainment and to proactively address customer gence™ strategy addresses traditional LDM alone addresses more than forty behaviour. These improvements – along data needs, as well as real-time data areas, including intellectual property with the way your integrated data can needs with three basic characteristics management, content, title, title level, inform marketing efforts and lead to that have become the Teradata trade- item level, and merchandising. The precisely tailored and expertly delivered mark of excellence: performance, Teradata LDM encompasses studios, new services – dramatically improve availability, and data freshness. As data broadcasting companies, on-line the customer experience. This means volumes grow, extracting and analysing businesses, cable, gaming, and publish- increased revenue through improved can either be a challenge or a simplified ing industries with the ability to address attraction and retention of your most solution allowing your organisation to current and emerging requirements. valuable customers. focus on strategic decision making > Teradata has developed supply chain rather than analysis and reporting. and demand planning, forecasting, and The Teradata Solution and > The Teradata Communications and analytics solutions specfically to address Benefits Media and Entertainment Logical Data digital and traditional supply chains. Teradata, through its extensive expertise Model (LDM), which is field-based, and experience, has developed solutions self-documented, and customised to > Teradata’s price optimisation and specifically for the communications, media the needs of CSPs and studios, is revenue assurance capabilities ensure and entertainment industries: unmatched in the marketplace. The that your organisation is prepared to

Key Business MEDIA AND ENTERTAINMENT INDUSTRY Processes

Digital Media Digital Media IP Rights Title Metadata Title Metadata Channel Management Monetization Management Transformation Profitability

SKU Store SKU-Store Demand/Supply Demand Category Channel Analytics Replenishment Management Planning Management Management Optimization Allocations

Customer Social Media Online Content Online Insight and Monitoring Targeting Advertising Management Targeting

Royalty Integrated Asset and Finance and IP Rights Calculation Performance Financial Liability Title Profitability Performance Management Analysis Optimization Analytics Expense Rationalization

Data Master Data Enterprise Data Management Management Architecture Maturity

Figure 12. Teradata’s Experience and Expertise in Media and Communications Business Processes.

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Teradata.com

address the variable pricing strategies, Conclusion About the Author as well as prevent your organisation Digitisation and convergence are being Sundara Raman is a Communications from revenue losses with your new driven by new revenue opportunities. An Industry Consultant at Teradata. He partnerships being forced by the increased number of distribution channels has more than 20 years experience in the convergence in the marketplace. and the proliferation of devices are forcing telecommunications industry that spans > The Audience Insight Factory provides CSPs to reevaluate their business models wireline, wireless, broadband and Pay TV the capability to aggregate historical to keep pace with consumers’ media choices sectors. He has worked for telecom service and real-time consumer data from and the additional data generated. These providers, consulting companies, telecom across multiple channels into a single changes are requiring CSPs to recognise that equipment providers and software solution source enabling the real-time serving future success will depend on developing firms. He has been responsible for product of relevant ads and content to cus- business and technology environments management, solution marketing, pre- tomers. This will result in significant that will more efficiently and effectively sales and IT strategy and architecture bottom-line impacts such as increase address operations, digital asset supply development in the areas of telecom in high value ad inventory, increase and demand chains, promotions, pricing, Business Support Systems (BSS), Service ad yield, and the ability to deliver new and forecasting capabilities. Delivery Platform (SDP), Fibre-to-the- products and services. Home (FTTH), Mobile TV, mobile The more successful and forward-thinking commerce, IPTV, and analytics. Sundara CSPs have already begun this transformative > Teradata’s Global Corporate Governance has lived and worked in Asia, Australia, journey and are in the midst of reorgan- process has been implemented at some New Zealand, and the Middle East. ising their businesses, actively planning the of the largest CSPs and studios and has Sundara has an MBA degree from Massey incorporation of active intelligence, and assisted in their global transformation University, New Zealand. projects by ensuring that IT planning have begun their courtship with the ultimate and business planning are in concert user and consumer. Teradata has partnered with a common set of goals and objec- with many of these communication, media tives resulting in higher ROI and profits. and entertainment companies in consoli- dating data marts, integrating B/OSS systems, service delivery platforms (SDP), optimis- ing pricing, and integrating enterprise-wide operations that is resulting in significant decreases in costs and increases in savings.

Raising Intelligence is a trademark, and Teradata and the Teradata logo are registered trademarks of Teradata Corporation and/or its affiliates in the U.S. and worldwide. Apple is a trademark of Apple Inc., registered in the U.S. and other countries. Teradata continually improves products as new technologies and components become available. Teradata, therefore, reserves the right to change specifications without prior notice. All features, functions, and operations described herein may not be marketed in all parts of the world. Consult your Teradata representative or Teradata.com for more information. Copyright © 2011 by Teradata Corporation All Rights Reserved. Produced in U.S.A.

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