Jon Ford, Regional Head of Partnership Distribution, Chubb
With the advent of 5G in sight, telecommunication companies (Telcos) should have their gears in full throttle. With factors like speed and network reliability likely to be ubiquitous, telcos should consider orchestrating an ecosystem of partners that can together create high value for the customer.
Chubb Asia Pacific’s Regional Head of Partnership Distribution, Jon Ford, shares his views on the telco landscape and how partnerships will be the key for telcos moving forward.
In your opinion, how has the telco landscape evolved over the years? We would like to know your perspective.
The telco industry is on a cusp of another exciting phase. When 5G networks become pervasive, what customers will be doing on a mobile device will be far different. Customer focused enterprises like us have huge opportunities ahead of us to take advantage of this new evolutionary cycle. Along with a faster network, we also have rich consumer data sets meaning we can deliver targeted, personalized value added services to our customers.
Launching several push-based Value Added Services (VAS) has been a strategy adopted by telcos for several years either to help acquire or retain customers, to differentiate offerings or as a source of new ancillary revenue. These services are largely push-based products and services loosely affiliated with a core product offering of the telcos. The evolution of VAS is now at a very exciting juncture. Telcos are launching VAS offerings that are tightly integrated with a core product or service such as cyber monitoring and detection services across all devices with remediation services delivered by technical experts funded by an insurance offering. This is a single VAS offering leveraging real-time monitoring capabilities alongside real-time remediation services. This changes the game completely in the VAS space.
What, according to you, are some of the challenges plaguing the telco sector today and how can they be effectively mitigated?
Telcos have always had to deal with margin pressures – stiff competition in usually regulated markets, along with difficulties in controlling their capital expenditure (capex). According to GSMA Intelligence’s 2019 report on ‘Investing in 5G’, telcos will invest up to $1 trillion in 5G networks between 2018 and 2025.
When 5G networks become pervasive, what customers will be doing on a mobile device will be far different
This capex accounts for 17% of operator mobile revenue. Technology in this space evolves quickly and most operators find their planning is driven more by technology rather than business objectives.
VoIP (Voice over IP) technology, combined with the Internet of Things will change mobile communications. Siemens issued a report recently that stated there will be around 26 billion Internet of things objects that will replace the mobile phone by 2020. VoIP enabled phone numbers will be able to connect with other devices easily. New disruptive threats loom and telcos need to take heed.
Security concerns are heightened with increased connectivity. Telcos will be called on to be good gatekeepers of their customers’ data and experiences. In formulating their digital transformation strategies moving forward, data security will need to be front and center. As they say, it is not ‘if’ you will get hacked, it is a matter of ‘when’. How telcos respond to cyber incidents will be critical in mitigating the impact of such threats.
Telcos need to keep ahead of innovations in fintech, mobile payments, location-based data services and more. These developments are going to lead to more industry convergence, so they would want to start forming meaningful partnerships now to create an ecosystem.
Which are a few technological trends influencing telcos today? What are some of the best practices businesses should adopt to steer ahead of competitors?
Data is king and the telco industry is not alone in wanting to capitalize on its data assets. Most telcos are looking for ways to compliantly monetize their data. Some are building their own marketplaces to keep their customers within their ecosystems. Again, we go back to the important idea of forming an ecosystem of services that can meet all the customers’ needs.
Chubb has been using data analytics in partnership with telcos with the same intent of improving customer engagement by personalizing product offerings. Now, it is all about using the data to enhance your ability to deliver the right products to the right people at the right place and time. For instance, working with a telco, Chubb can offer the appropriate travel insurance policy for travelers at the point when they turn on their roaming service on their phones. These can be real-time insurance products delivered for immediate consumption by customers.
Telematics and the use of real-time data analytics are also enabling telcos to deliver unique propositions to the market.
Blockchain, another trending technology, can be the conduit of new opportunities for them as well. For one, blockchain technology could potentially resolve their high infrastructure expenditure by building an infrastructure sharing economy with other service providers. Telcos could also use blockchain technology for data protection and fraud prevention.
Do you have any suggestions for industry veterans or budding entrepreneurs from the Telco space?
While there will always be margin pressures and new competitor entrant threats, telcos are still in a strong position to build world-class customer experiences and retail capabilities well beyond traditional core services.
Partnering with leading VAS providers and investing in deep integrated customer journeys with these partners will pay off in the long run.
Companies should develop robust pull versus push VAS offerings that make a deep impact on the customer (either consumers or Small & Mid-sized Enterprises) and that will set them from the competition and enhance customer loyalty at sustainable margins.