After decades of relying on post-paid and pre-paid relationships with customers as a source of revenue, telecom companies are tapping into the big data gold rush and monetizing rich data assets.
According to Anindya Datta, CEO and founder of Mobilewalla, consumer data held by telecom companies is far less comprehensive than commonly believed. In fact, he says, telecom companies that want to monetise their data are faced with numerous challenges, such as imprecise location data and incomplete subscriber profiles.
"Telco-specific IDs are inadequate for addressing consumers in the digital landscape," said Datta. "These gaps are major impediments to the creation of differentiated, powerful advertising stacks, and prevent telcos from being competitive against search and social media vendors."
According to a McKinsey paper from 2016, telecom companies that have managed to introduce upstream and downstream tracking measures that identify and segments customers have been able to see a 10% growth in profits.
In the APAC region, Singtel acquired Amobee and Turn while Axiata launched in-house ad-tech subsidiaries to win over advertisers and agencies while competing effectively with the search and social duopoly.
"That many telcos have been acquiring ad tech companies and launching in-house advertising subsidiaries are obvious indicators of their strategic intent to launch advertising stacks powered by their data," asserts Datta. He adds that telecom companies need to take a hard look at the data assets and processes they currently have and assess the obstacles that impede them from creating ad platforms that compete with those offered by the large search and social media companies.
At this stage, the most common challenges facing that telecom companies involve data granularity, storage, retrieval, analysis and complying with data privacy regulations. These are issues that need to be addressed for a fully-optimized process of telco data monetization, according to Datta.
As a starting point, telecom companies need to come to terms with the possibility that their customer data does not rival that of Google and Facebook in breadth or depth.
In rectifying the problem, telecom companies can tap the services of a trusted mobile data company to overcome limitations stemming from location data, scant access to consumer behaviour and insufficient subscriber information.
"Although filling the gaps in data is the most important task, infrastructure is also key," reminds Datta. "Telcos need to create an infrastructure where their data assets can be stored, manipulated and processed to produce the right input to the media buyer layer on top. The scale and refresh velocity of this data is such that conventional storage infrastructures and traditional DMPs are not economically viable."
Lastly, as telcos are relatively new players to the digital space, they do not traditionally have the expertise when it comes to building and operating advertising stacks. Even with the right infrastructure and data in place, it is only by getting the right talent on board that telcos can operate and make full use of the tools at their disposal.
Naturally, Datta posits that this is where his firm could step in. Mobilewalla's work in addressing and solving this problem is credited as a key reason why the business has grown dramatically in the past two years, moreso in APAC than North America.
"Our biggest growth is in a region that is not known for being a quick adopter of far-out technology," he said. "We have tremendous success in Malaysia and Indonesia, driven for a large part by telcos, but 50% of our revenue has been driven by this region."
Datta pitches telcos on Mobilewalla's ability to track user journeys across multiple SSP partners and create segments based on the data collected.
"I believe we are the only company in the world that can do this at scale," asserts Datta.