Telcos long way from harnessing full potential of analytics: Cisco

• Much more can be done using analytics, potential still very much untapped
• Complexity in IT infrastructure makes fast rollout of products challenging

CELLULAR service providers, often seen as early adopters of technology, are nowhere close to harnessing the full potential of analytics, according to a senior Cisco Systems Inc executive.
 
Kelly Ahuja (pic), senior vice president of the Service Provider Business, Products and Solutions, at Cisco, said that most telecommunications companies are still at the infancy stage when it comes to figuring out their analytics strategy.
 
“Analytics is a new area for most of the operators because the first thing they are trying to figure out is what their strategy should be,” Ahuja told Digital News Asia (DNA) on the sidelines of the company’s on-going Global Editors Conference in San Jose.
 
“Some of them have set up business units, but what they are really trying to figure out is how they can make money by leveraging on some of the knowledge they have in the network,” he said.
 
For now, telcos using analytics tools are just tapping the tip of the iceberg – most are using such tools to profile their customers so that they can try to cross-sell or up-sell their products, with the aim of growing revenue and reducing churn.
 
“But, there are so many things that can be done and the potential is very much untapped still,” Ahuja argued.
 
One of the things telcos are expected to delve into over the near- to medium-term is real-time network analytics. This will be mainly driven by trends such as machine-to-machine (M2M) and location-based services, social networking, mobile commerce, and more, he said.
 
Using data from such services, telcos will be in a better position to track consumers’ buying patterns.
 
Meanwhile, in a Cisco report released earlier this year, it was revealed that worldwide mobile data traffic will increase nearly 11-fold over the next four years and reach an annual run-rate of 190 exabytes by 2018. An exabyte is equal to one quintillion bytes or one billion gigabytes.
 
The projected increase in mobile traffic is partly due to continued strong growth in the number of mobile Internet connections such as personal devices and M2M connections, which will exceed 10 billion by 2018 and be 1.4 times greater than the world’s population (the United Nations estimates 7.6 billion people by 2018).
 
Using analytics tools, telcos can not only understand their consumer users better, but also better serve their enterprise customers, since they can aggregate data in real-time to support these customers’ business decisions.
 
However, the journey will not be easy as telcos would need to get the right talent for their big data ambitions.
 
“Even in analytics, the telcos are lacking on relying their own internal resources to figure out what to do,” said Ahuja.
 
“This is because … the skills set to do that is very specialised. You need data scientists and mathematicians, among others,” he added.
 
Telcos’ biggest challenge
 
Ahuja said that the biggest challenge for telcos today is rolling out new services more quickly.
 
“Operators are finding this challenging … [because] of the complexity of their IT infrastructure, as they are operating on various types of systems (such as billing, operations, and support).
 
“So, they are looking for a new model of doing IT,” he added.
 
One of the models they are looking at is outsourcing this IT work to vendors. However, Ahuja cautioned that outsourcing IT is not a ‘one-size fits all’ strategy.
 
In fact, in some areas of the business, telcos – which were previously quick to seize on the outsourcing model – are now looking at the ‘insourcing’ model instead.
 
“We are seeing some insourcing happening. Over the years, we saw telcos outsourcing their network operations, with the aim of saving costs,” said Ahuja.
 
“But they are realising that … the network is a core competence; it can be a differentiator. So they want to take back control of their network resources,” he added.
 
Goh Thean Eu reports from the Cisco Global Editors Conference in San Jose at the invitation of Cisco Systems Inc. All editorials are independent.
 
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