Atos: 10 key revenue opportunities for telecom sector

05 August 2014 Consultancy.uk

As a result of the changing landscape in the telecom market, traditional business models of operators are coming under increasing pressure. The key question telecom players therefore currently face is: where and how can revenue be boosted through the monetization of products and services? According to a new white paper from consulting and IT-services firm Atos Consulting telco’s theoretically have no need to worry, in the coming years they will be confronted with massive monetization opportunities, the result of 10 key technological trends. The key to success lies however in the manner with which digital strategy & execution are aligned to ensure the value is captured from today’s all-connected consumer.

In the white paper titled ‘Digital Transformation in the Telecom Market’ Atos Consulting presents a vision on the future of the telecom industry*. In their view, to remain competitive telecom players will have to transition their business model from the current approach (focus on voice, text and to a certain extent on data) to a new model centered around capturing the real value of data. “Data will become the new liquid gold in the industry,” says Michel van Buitenen, telecom expert at Atos Consulting and Head of the Dutch Telecom & Media Market. “With the huge amounts of data at hand, telco’s face the opportunity to initiate a digital transformation journey from a pure-play service provider to a data-driven ‘spider-in-the-web’ player in a larger service delivery chain. Operators can develop a strong profile as broker and trusted partner that safeguards the privacy of consumers.” 

The allconnected consumer - Atos Consulting

Based on this vision, the consultants have identified 10 key technological trends that will bring along the largest monetization opportunities. What stands out is the fact that the majority of ‘gamechangers’ find themselves outside the traditional domain of telco’s, such as in healthcare, banking or the energy market. “This demonstrates the fact that telecom operators will have to open their horizon and explore greenfield areas for new revenue opportunities,” states Van Buitenen.

An overview of the 10 largest technology-driven revenue opportunities for telco’s:

Health monitoring
The market for health monitoring and e-Health is growing rapidly across the globe, the consequence of the rat-race to lower health costs and at the same time improve service and safety. For operators, the opportunity lies in becoming a trusted third party for providing communication services (apps, tools) or as an infrastructure provider facilitating data flows.

Health monitoring - Atos Consulting

Smart cars
The rise of ‘smart’ or ‘connected’ cars in the automotive sector is another mega opportunity for the telecom industry. In 2012 the market was worth €13 billion, by 2018 the smart cars sector will have more than doubled to €29 billion. For telecom players the opportunity can be found in providing the telematics to the industry – the network that facilitates the communication flows between car devices and external networks.

Smart house
Similar to smart cars, homes are expected to develop to a situation where all electronic devices, ranging from TV’s to lights and washing machines, interact with each other. Currently valued at €13 billion, the smart home market is forecasted to grow to €25,6 billion in 2020. Operators can earn money by working together with energy suppliers or electronic device producers, building systems to capture, transmit and monitor data flows.

Smart cars and smart house - Atos Consulting

Personalized online experience
Online retailers are drastically using geographical and behavioral data to personalize content and advertisements on any kind of device to consumers. For telco operators there are two massive opportunities: sell their assets (information on customers such as location-based data) and work together with content producers on new affiliate revenue models.

Mobile Payments
Between 2012 and 2016 the mobile payments industry is expected to grow from €110 million to €440 million. With the rise of mobile payments, so too does the demand for telecom infrastructure products (eg. Digital Wallet) or services. Telecom operators can expand their business models to payment alliances with banks or other payment operators to deliver these services.

Personal Travel Information
Similar to the retail sector, also the travel and tourism sector is trying to customize its service portfolio to the demands of customers. To do so there is a large need for data, so that restaurants can for instance know who is hungry, hotels can know who is around and in search of lodging and attractions know how to best market to tourists. The opportunity here is indirect for telecom players – they could act as a data provider and form alliances with organizations within the tourist sector, with profits based on a percentage per transaction.

Mobile Payments and Personal Travel Information - Atos Consulting

Authentication Provider
Automatic identification is another area which is expected to boom in the coming decade. After successful identification with a smartphone or fingerprint, relevant data about the owner can be shared across a secure channel. Applications include digitally signing documents, decreasing the waiting time at airports by automatically filling in forms and checking into a hotel without the need to enter any information. As the smartphone is considered as the heart of the concept, telecom operators find themselves in a strong position to capture value. This could be either on a mobile subscriptions basis for consumers (premium service) or through an affiliate marketing approach with organizations.

Secure Data
The consultants from Atos also foresee a possibility for telco’s to enter the cloud sector. As the demand for secure and remote storage will boom in the coming decade, telco’s can leverage their data infrastructure and close contact with customers to offer cloud services as a premium.

Smart calling
With the introduction of GSM, online calling, VOIP and other alternatives, the market for voice has changed dramatically. In the future a new market will arise, one where clients are advised on the smartest (=cheapest) way to call, independent of the provider or infrastructure used. Telecom operators are likely to be the frontrunners in the development of the ‘smart calling’ market. Most likely is that it is offered as a standard service to customers and that revenues are earned from providers, who benefit from smart routing calls.

Secure Data, Smart Calling, Smart Meter - Atos Consulting

Smart Meter
The introduction of smart meters in the housing and real estate sector is quickly changing the way consumers and business manage their energy efficiency. The key opportunity for telco’s can be found in the bundling of smart mater services with smartphones – picture a smart meter which can be controlled from outside a home by a smartphone. Operators can exploit this opportunity through several models, yet with all households falling in-scope it represents a huge potential revenue stream.

“Atos Consulting can support operators during their digital transformation journey and enable them to reposition themselves. Integrating social, mobility, analytics, and cloud in their business model will be key,” concludes Van Buitenen.

* The vision builds on a scenario planning research launched last year, in which the Atos Consulting forecasted data as a digital currency to be most likely scenario.

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Four ways digitalisation is transforming car brands and dealers

16 April 2019 Consultancy.uk

From changing expectations from the customer to new stakeholders entering the industry, the digital transformation of global automotive industry means it is facing the wholesale transformation of its business model. In a new white paper, global consulting partnership Cordence Worldwide has highlighted four major digital trends that are transforming the relationships between car brands and dealers with consumers.

With digital transformation drives booming across the industrial spectrum, automotive groups are no different in having commenced large digital transformation programmes to improve productivity, efficiency, and ultimately profitability. Falling sales figures mean the automotive sector is facing an increasingly difficult road ahead, something which means companies in the market are even more hard pressed to find new ways to improve their bottom lines.

While it offers major opportunities, the industry’s move to digitalise is not without complications. It has triggered a series of major internal changes, which have presented automotive entities with the challenge of becoming a “customer-oriented” industry. A new report from Cordence Worldwide – a global management consulting partnership present in more than 20 countries – has explored how automotive companies are navigating the rapidly changing nature of digital business.

New business models

The level of change likely to be wrought on the automotive industry by digitalisation is hard to overstate. Automation could well lead to significant reductions in the number of accidents, higher vehicle utilisation and lower pollution levels, while leading to a $2.1 trillion change in traditional revenues, with up to $4.3 trillion in new revenue openings arising by 2030.

As a result of this colossal opportunity, it is easy to see why almost all automotive groups now have digital departments, with generally strong communication within the digital transformation and the customer approach. The changes to society which this may have are potentially distracting automotive firms from the change it is leading to in its own companies though, according to Cordence’s paper.

The automotive market is dead, long live the mobility market

Because of this, the sector’s business model is set to transform over the coming decades. With digitalisation speeding up the appearance of concepts such as car-sharing, a subscription package model will likely become more palatable. At the same time, car and ride-sharing models will cater to the sustainability criteria of millennials, who will rapidly become one of the automotive market’s leading consumer demographics in the coming years.

Antoine Glutron – a Managing Consultant with Cordence member Oresys, and the report’s author – said of the situation, “These ‘old school industries’ are now working on creating new opportunities, but in so-doing are facing challenges and threats: new jobs, new technologies, new ecosystem of partners, necessary reorganisation, different relationship with customers, and even new businesses. The customer approach topic is in fact a real challenge for car companies as it implies changing their business model and adjusting their mind-set to address the customer 4.0: from product-centric to customer-centric, from car manufacturer to service provider.”

Digital customer experience

In the hyper-competitive age of the internet, even top companies face an uphill challenge when it comes to holding onto customers through brand loyalty. Digital disruption has resulted in changes to consumer behaviour, which is forcing a range of marketing strategists to reconsider their old, possibly out-dated strategies. As modern customers wield an increasingly impressive array of digital tools and online databases, they and are now able to quickly and conveniently compare prices, check availability and read product reviews.

The automotive sector is no exception to this trend, according to the study. In order to adapt to the needs of the so-called ‘customer 4.0’, car companies will increasingly need to change their business model and move away from product-centric companies to customer-centric ones, from car manufacturers to service providers.

Glutron explained, “As an automotive company, you can no longer expect customer loyalty simply with good products; you must conquer and re-conquer a customer that “consumes” your service. The offer now has to be global, digital and personalised. Your offer has to be adapted to this customer’s needs at any given moment. A key issue related to data control is to build customer loyalty by creating a customer experience 'tailored' throughout the cycle of use of the 'car product': purchase, driving, maintenance and trade-in of the vehicle.”

One way in which the sector may be able to benefit from this desire for a tailored experience is via connectivity. Consumers are generally positive about new connective features for automobiles, and many are even willing to pay upfront for infotainment, emergency and maintenance services. Chinese consumers, where the connected car market is set to hit $216 billion, are already particularly interested in paying a little more for navigation and diagnostic features in their future new car. This can also enable automotive companies to exploit a rich vein of customer data, enabling them to rapidly tailor their offerings to consumer behaviour.

New automotive segments

Digital transformation has also brought with it the rise of completely new application areas. As mentioned earlier, the most well-known example is the autonomous or self-driving car, where the last steps forward were not taken by major automotive groups but by technology companies such as Tesla. While this may have given such firms the edge in the market briefly, a number of keystone automotive names will soon be set to take the plunge into the market themselves, leveraging their car manufacturing prowess and huge production capacities to their advantage.

Before companies rush to invest in this market, however, it is worth their while to remember that the readiness and uptake for such vehicles differs greatly geographically. For example, following a study published in 2018, 92% of Chinese would be ready to buy an autonomous car, compared with only around 35% of drivers in France, Germany and US. Meanwhile, the infrastructure of different nations will also be significantly less accommodating of the new technology.

Use digital for steering thr activity

Elsewhere, Cordence’s analysis has suggested that hooking the cars of tomorrow into the Internet of Things is also likely to see a rapid change in the business model for car maintenance, providing real-time diagnostics for problems. This presents chances for partnerships to improve the connectivity of cars, especially with tech companies; for example, PSA partnered with IBM for a global agreement on services in their vehicle. Meanwhile, data could also be sold to other parties with an interest in this data, such as the government, which could use it to manage traffic levels, or ensure that only adequately maintained vehicles take to the road.

Glutron added, “With the increase in the amount of client data and connected opportunities, the recommendation is to set up data-centric approaches. The value is now in the customer data. The general prerequisites are to rework the data model and the Enterprise Architecture and generally build up a data lake including data from all sources (internal and external, structured and unstructured).”

From automotive to mobility

Relating further to the idea of connectivity, the report claimed that automotive firms must now adjust their models in line with the provision of end-to-end mobility, rather than treating the sale of a car as an end point in their relationship with the customer. In order to realise this transformation, transformations are likely to become more and more important.

A network of partner companies means automotive firms can provide a global mobility experience. As the vehicle is increasingly connected to its environment, new partners can also be cities, governments, and other service providers within the global mobility services industry in which the car brands want to take part.

According to the study, the target is clear. Companies must look to a holistic transport service, offering to move customers from A to B in a unique and pleasant way – otherwise they might as well take public transport. At the same time, they should extend the services reachable “on-board” (especially the enhancement of the connectivity between the car and smartphones or other connected devices), and reach high standards in terms of user experience (online sales, online payment, customised experience during and after the use of the car).

Concluding the report, Glutron stated, “These mobility market transformations could be considered a threat for the car manufacturers. Quite the opposite: if they take up the challenge and review their business model so that they become the service provider – communicating no longer to a driver but to a ‘mobility customer’ – they can then take advantage of their expertise and their position as a historical player. The most convenient means of transport are cars, and building a car is highly-skilled work.”