6 Telco predections & why Uber

After 12 happy years, my relationship with Vodafone has come to an end!

It was an amazing ride, I was lucky enough to work with some amazing people and learn from the best minds in the region.

I also witnessed some amazing milestones!

I was lucky to be there through the launch of the cross-network SMS and the first steps of mobile internet.

And the reasons I loved the industry were very clear, it was fast, creative, dynamic and it actually improved people's lives. With the introduction of every new service, It helped a new customer segment to better do their jobs or to seamlessly connect with their loved ones! it was enriching, satisfying and challenging (and I love challenges).

In my 12 years, I have worked in prepaid, postpaid and enterprise marketing with stints in brand and communication and customer value management.

In my last role, I was in charge of customer value management consultancy for Middle-East, Africa, and Asia.

Over the 18 months, I flew to 12 countries covering 3 continents with over 250,000 miles of travel (that is same distance to the moon!) I met and engaged with people from all walks of life with different backgrounds, beliefs and approaches to work and it was a learning experience that you can not get anywhere else in the world. I loved every second of it and I am very blessed to have experienced that.

But before I share my predictions I wanted to highlight the predicament that the telcos are finding themselves in:

a. They don't own the technology (be it 3G, 4G or 5G), they just buy it and install it.

b. They don't own the terminal, they just sell it. And buying a new device is the MOST exciting part of the experience.

c. They aren't relevant anymore, the apps and OTT players have become more important.

d. They are not the best part of the experience, on the contrary, they are usually the worst part of it with network quality, data speeds, and billing and payment are always the challenges.

e. They own the customer relationship, but loyalty is very marginal with customer decision changing based on price and value (device or data speed).

With that said, here are my 6 predictions for telcos in the near future:

1- Rise of the E-Telco

Telcos started with legacy systems with fragmented operations and super fast growth, this is resulting in a lot of systems (most are very old) that do not talk to each other.

From a customer standpoint, it means that the customer is getting a non-consistent schizophrenic experience.

And telcos are moving more towards an e-commerce model with platforms that arbitrate and decide on what is the right customer experience & conversation across all touch points.

A role model would be Amazon, Amazon are always A/B testing the site (with up to a new version every 3 seconds) and always hand-holding the customer throughout the purchase with suggestions and options to increase basket size and drive sales (or conversions).

This shift is the most exciting for telcos as the business case behind it delivers more sales and better customer experience through better conversations with the customer that are more relevant at the right time while influencing customer decisions to minimize toxic movements

2- Truely cordless

Old is gold, and fixed has been on a comeback (that even John Travolta would envy) mainly due to the increased demand by data-intense applications that can't be fulfilled by 4G network due to latency, coverage or quota limitation

That can all change with the emergence of 5G where (based on current leaks) it can spell the end of Fibre to the home setup to be replaced by a truly wireless connectivity using the 5G backhaul (but the problem will still be the quotas, or will it now?)

5G should also make more economic value for the Telcos as they learned the lesson from 3G and have been playing an active part in defining the standard and making sure it balances technology requirements with commercial viability for a profitable roll-out.

3- Content is King

This is very clear if you are keeping an eye on the US market with a lot of companies buying, investing in content-based companies to provide customers with true differentiation beyond traditional coverage and data quotas

this changes the game a lot as it shifts the telco focus from high volume moderate margins into really low margin business to provide differentiation and ring-fence existing base

and this will take an interesting turn with the new net neutrality changes

but the jury is still out on whether the content aggregation will win versus content exclusivity, regardless of the outcome the future will be exciting for the end customer

4- A smarter world, one sim at a time

The biggest buzz word in the Telco space in the last year (and for 1-2 years to come) because the possibilities are endless. yet, it is a very premature business that no one has really cracked yet.

The reasons it isn't really cracked is the economics of the case, to build a proper ecosystem for IoT that delivers a seamless experience and multi-device support with dashboard and reporting is very expensive and is never justified by the nominal fees being occurred on those sims.

Another big stumbling block is the lack of dialogue between manufacturers and telco providers resulting in a lack of standardization or the availability of a consumer-friendly (not enterprise-ready) platform

The story is simple, you buy a fridge, plug-in your sim and you will be able to track it (and all other devices) via your phone and take control.

The idea is simple but the applications are a lot, being able to optimize power consumption or automate your Amazon deliveries.

But the current experience is far from this because to crack it the approach needs a change and I think this will happen very soon.

5- Mobile banking

Disruptions to the banking industry have been long overdue. but we can already see some trends of that.

Alibaba is already challenging the banks in China and other startups are finding their way into European markets.

and in the telco world, there has been multiple experiments there and the logic is very sound.

Customers already deal with telcos more than anyone else, they have the branches and support to help when needed.

In some regions already the phone is replacing banks and solving the cash/un-banked economy problems.

The opportunities are endless from full-on banking to focusing on facilitating payments or managing money transfers.  

The biggest barrier here has always been regulations, lack of tenacity in cracking it or the emergence of viable options for the customer via android and apple pay products.

But with the continuous erosion in margins and the dependence on the internet will prompt some telcos to pursue that route which can only be great for the customers.

6- If all fail, Wholesale! 

Telcos are a very profitable business, but they are a CapEx nightmare due to the constant expansion of coverage, signaling, backhaul and everything to support the massive increase in data traffic.

but the main problem is all telcos are doing it!

if you look at it from a macro-perspective it means that there is more investment in the market than is actually needed to fulfill the increasing demand, which is inefficient.

This could produce a new kind of player that is more focused on the network aspect of a telco with a clear outsourcing model.

This opens the door to more MVNOs to come in and shift the focus from network differentiation to more experiential or no-frills marketing. 

This would make the industry more profitable yet the differentiation and innovation wouldn't be to the best of customer interest.

Why Uber?

Much has been said of Uber with most being on the negative side but for me it is a great company providing your average Joe and Jane with a real opportunity for economic empowerment, to monetize an existing asset to pursue a better life for themselves and their families.

Over my trips, I took more than a hundred Ubers and I talked to each and every one of them, It was very inspiring how a simple idea with a sophisticated technology platform has helped them live a better life, an aspect rarely discussed in the mainstream media. however, an angle that means a lot to me personally and a cause I am very happy and proud to be a part of.

It saddens me to leave Vodafone but I am very excited for the future!

I truly believe that the future is exciting! but when in doubt, always take an Uber :)