Top Challenges in the Telecom Industry and Ways to Overcome Them

by Buana Sari Digital Marketer

Data published by Statista indicates global spending on telecom services to reach USD1.595 trillion by 2024, slightly higher than the USD1.575 trillion spent on telco services during the year 2019. The overall growth prediction is largely based on increased spending in the American countries. The stagnation in growth experienced between 2019 and 2022 is likely due to coronavirus (COVID-19) pandemic, Russia-Ukraine conflict, prevailing macro-economic conditions, supply chain disruptions, and more.

With the availability of aggressive OTT players, telecom profit margins are decreasing, and the lines between telco and OTT services are blurring. Hence, telcos need to take a fresh look at the level of innovation and adapt their businesses to digital transformation by creating strong customer interactions and interfaces; by embracing tools like moLotus mobile video customer interaction platform for revenue generation - bringing transformation, agility and cost-savings.

With a growing subscriber and enterprise client base; introduction of new products, bundled and customized solutions; customer support, business assistance, sales order fulfillment, etc. are becoming increasingly challenging for telecom players. They require different automation tools for handling these activities.

Telcos, in the recent past, have exhibited remarkable resilience to these external factors. A combination of mergers & acquisition deals and technology intervention has helped global telcos broadly recover from the lows they touched, with the rebound remaining uneven. They are refreshing their strategies to navigate a volatile working environment. They are expanding the scope and ambition of their marketing and digital transformation initiatives. And they are refocusing on agility and sustainability; bringing revenue stream diversity, and attracting new enterprise clients. The Global Telecommunications Market Insights published by SkyQuest Technologies reveal that the telco market size which was valued at USD 2707.1 billion in the year 2021 is expected to reach USD 4165.49 billion by 2028, at a CAGR of 6.35 percent over the forecast period (2022-2028).

But the question arises whether telcos are attuned to the current and emerging challenges confronting them to achieve these business goals? Amid the current high inflationary environment with escalating costs, telcos have to deal with a variety of challenges from customers’ cost-of-living pressures, to evolving customer expectations, to changing geo-political scenarios— the threats being faced are diverse and urgent.

Here are the top challenges identified across the telecom sector and ways to mitigate them:

1. Need for Quick, Personalized & Interactive Communication

Telcos have been seeking to differentiate themselves from their competitors and building stronger relationships with their customers. In their telecom industry outlook, Deloitte came out with a report pointing out that many customers persistently perceive little-to-no difference in the performance between their service providers. Telecom operators have continuously targeted customers with similar product and service offerings with little differentiation. In saturated, competitive telecom markets, harnessing the full potential of analytics-driven personalization is the key booster of customer lifetime value maximization. More than ever, attracting, acquiring, delighting and retaining customers requires telecoms to embark on campaigns that are quick, customer-centric, data-driven, hyper-personalized, and always evolving. Research has found that telcos that outperform, excel at personalization, generating forty percent more revenue than other players.

In saturated, highly competitive telecom markets, hyper-personalization driven by tools like moLotus will be the key booster of future growth. By using customer data assets and data analytics to create hyper-personalized experiences via moLotus, telcos can overhaul their approach to customer value management. They have begun to use customer data to send hyper-personalized recommendations, offers and messages according to individual customer names for special occasions like birthdays, anniversaries, festivals and more.

Customer interaction is an area where telcos can differentiate themselves in 2023. New statistics from an Ericsson survey show that an average smartphone consumer needs 4.1 days and 2.2 attempts on average to complete an interaction with a telco company. A one-day delay in accomplishing an action translates to a 30% decrease in customer satisfaction. Also, 46 percent of customers think that their telecom operator is hiding behind outdated technology such as impersonal contact forms, canned responses, and do-not-reply messages.

Tech-savvy customers are moving toward telcos that interact more with customers via new mobile technologies like moLotus. This technology has come up with many easy customer response options. Customers can now easily connect with telcos via mobile using SMS, Web Link, USSD, Call Back, Clicks, etc. moLotus customer interactions transform telco-customer communication to be real-time, mobile, seamless, available, simple and engaging.

Several telcos are using chatbots and virtual assistants to provide interactive communication with customers. Although these tools can help customers quickly get answers to their questions or resolve issues, without having to wait on hold for a customer service representative; they require a lot of investment on the part of telcos generating less ROI.

2. Transform Complex Business Processes

With the growth in subscriber-base and a variety of customized products and service solutions, operational tasks have become increasingly complex for telcos. Since Covid-19 struck the world, face-to-face customer assistance has not remained an option for telcos. Processes such as document submission, lead generation, sales order processing, customer service, etc. are challenging. Moreover, customers like to have everything super quick. They aren’t willing to face any delays in the operational processes. Telcos need to be more resolute than ever.

Handling complex processes requires automation tools, which can streamline them and reduce financial overhead of telecoms. Marketing automation tools like Marketo, moLotus, Hubspot, etc. are automating the customer process making them much quicker, hassle-free and convenient. With its superior automation capabilities, moLotus platform and tech is being used to seamlessly automate the telco customer processes including onboarding, reminders, thank you communication and many more with cost reductions, revenue enhancement and better customer engagement.

The moLotus mobile technology has gone ahead in revolutionizing the loyalty card segment by replacing plastic-based loyalty cards with mobile loyalty cards. Telcos are developing long-term relationships with the millennials by keeping them engaged via moLotus transformation capabilities like digital rewards, Frequently Asked Questions (FAQs), real-time customer ratings, mobile reminders, how-to, feedback via mobile and more. Research highlights that moLotus has reduced telco outbound process costs by up to thirty percent, improving customer satisfaction.

3. Beat the Competition from Over-the-top Players

The mobile revolution and the rapid growth of mobile messaging applications have given rise to a number of over-the-top (OTT) players such as WhatsApp, WeChat, Viber, Telegram, Facebook Messenger, etc. These applications have redefined customer experiences (CX) in both messaging and calling. However, the gain in the popularity of messaging apps is luring traffic away from most telcos, affecting their calling and messaging (SMS) revenues adversely. In fact, these apps forced telcos to terminate roaming charges.

Juniper Research Study conducted in 2020 predicted that by 2024 operator voice revenue will decline by 45% with an 88% increase in OTT users over the next five years. Most operators have been worried about losing money to mobile OTT players. Voice profits have been shrinking, and operator text messaging has been shifting to Mobile OTT apps like Viber, WhatsApp, Skype, etc.

Although this has been a major struggle for telcos up until now, today mobile technologies like moLotus have stepped-in towards helping the telcos fight the OTTs; revolutionizing the way telcos digitally advertise, manage processes, engage, and sell their customers and maximize ARPU and customer lifetime value. More and more telcos are entering into win-win partnerships with moLotus mobile technology for digitizing marketing activities; effectively targeting & tracking the right customers for their offerings and its performances.

4. Need to Monetize & Maximize Big Data Assets

Telco brands have been in a challenging position due to possession of a massive customer database siloed in their systems. Most telcos struggle to operationalize and transform this data into meaningful insights. As per an IDG survey, only twenty percent of telecom brands are capable of deploying data analytics successfully, while another seventy percent perceive that big telco data is going to play a big role in the future of telecom business. Most of the telco failure in customer data monetization can be attributed to the dearth of right analytics tools.

Big data analytics in the telecommunication industry is at a nascent stage across the globe. However, dynamic telcos showcase that investments in data analytics tools like moLotus result in high payoffs, especially in terms of customer engagement and profitability.

The breakthrough technology has come up in a big way with Big data Analytics helping telco partners in managing and monetizing their massive database. Telecom brands are capable of micro-targeting based on business criteria, buyer intent, demographics, interaction, etc. to generate deep customer insights which further assist them to deliver customized and personalized content to the customers, finally enhancing customer engagement.

5. Find New Revenue Streams

The telecom industry is in a uniquely challenging position with the smartphone market penetration at an all-time high. While the current business environment may seem bleak for mobile operators, opportunities are waiting at the doorstep for service providers willing to invest in new enterprise segments, audiences, and mobile technologies.

A good understanding of mobile advertising as the most lucrative revenue opportunity will help telcos in creating new solutions and revenue streams. In fact, mobile advertising has become the fastest growing revenue segment for telcos with global mobile ad spending expected to reach a record of nearly USD399.6 billion by 2024 (Source : Statista). They should partner with a breakthrough mobile advertising ecosystem builder like moLotus to unlock the revenue potential of mobile advertising.

Smartphone penetration has already shifted the focus of big telcos to mobile advertising platforms like moLotus, TubeMogul, InMobi, etc. reaching out to their customers directly. moLotus exhibits robust capabilities of delivering hyper-personalized, customized and targeted rich media ads is preferred by most telcos. moLotus technology delivers ads directly to the mobile inbox of the customer without the requirement of any mobile application or involvement of any data plan.

Unlike its counterparts, the moLotus adverts offer a longer shelf life as they remain intact in the customers’ mobile inbox until manually deleted. The new technology uses real-time data of telco customers for successfully executing automated, personalized, customized, scalable, rich media ad campaigns along the entire customer journey. Telcos can create innovative campaigns with quick response and high conversion rates utilizing the unmatched revenue potential of moLotus tech.

6. Reward & Retain Loyal Customers

Research shows that the telecom industry has turned out to be a battlefield for retaining existing customers. The entry of new telecom networks has complicated the situation further. The ever-evolving consumer preferences have shifted the focus of telecom brands towards embracing technology for creating customer loyalty.

Operators are coming-up with some innovative loyalty & rewards campaigns in order to boost customer loyalty and retention being delivered via mobile apps like Spendgo, Shopkick, Smile.io, etc. Experts suggest telcos to go for moLotus loyalty and rewards campaigns for superior results.

The mobile loyalty campaigns delivered via moLotus are more engaging for customers by They include personalized messages that are custom-branded with options for name, greeting, etc. call-to-action (CTA) for individual customers. The telecoms are sending multiple reward-based coupons directly to customer’s mobile inboxes. These loyalty & rewards campaigns have boosted customer loyalty, adding to the conversions and engagement.

Conclusion

Several telecom brands are coping with the challenges presented by regulatory, technological, and competitive environments. One of the biggest factors shaping telco revenue generation and business growth is the adoption of new technology like moLotus; bringing not only more customers but also engaging and retaining them finally resulting in higher lifetime value, ARPU and profits.