Telecommunications operators suffer decline in revenues and profits caused by commoditization of their services, strong competition from other telcos and Internet players (Over-the-top, like Google, Twitter and Facebook).
One of key reasons for commoditisation is lack of innovation caused by corporate culture and complex process-based approaches, but also by extremely complex and inflexible IT systems. The typical road to a new marketing campaign or product takes many months and incurs millions of dollars in cost. Telco operators’ network provides very detailed data about customers’ location, behaviours and needs. Complex structure of existing solutions as well as technical, cultural and organisational boundaries between IT and Network departments prevent effective leverage of this information for business purposes.
Telecom operators have gone through three waves of revenue streams. The 1st wave was related to voice services. Voice revenues have started to decline as early as 2002 in mature markets, complemented by messaging services (SMS/MMS) revenues — the 2nd wave. Circa 2007 mobile data (broadband) services started getting market traction, and their revenue (the 3rd wave) added up to falling incomes from the first two waves. Now (from 2013 onwards) total revenues of telecoms are in decline in most mature markets. There is market consensus that telecom operators need to build the 4th wave of revenue, coming from so-called “Digital Lifestyle Services”. There three main characteristics of 4th wave services:
- they need to “understand” and relate to in-the-moment context of their user,
- they need to integrate with and leverage Internet (Over-the-top) services,
- they need to go beyond pure communications applications (e.g. supporting health, transportation, green economy).
Main challenge of telecom operators with the 4th wave is lack of processing logic (analysis of data sources and business rules) and significant issues with implementing them in the traditional siloed IT/Network/Business internal environment. Moreover, due to difficult financial situation, the management boards have typically put capital-intensive transformation projects on hold.
Telcos will also play strategic role in building Internet of Things (IoT), which can become one of revenue sources in the new era. SIM cards will be implemented in sensors and actuators supporting traffic management and security assurance, smart grid, maintenance services, connected cars etc. However one of main issues that telecom operators have with this approach is very low level of revenue-per-SIM. Retixa helps solve this problem, by enabling operators to provide much greater value (real-time analytics and control) to their partners than just connectivity. With this approach SIM cards can be offered for free and the partners can be charged for services with value add much higher than just connectivity.
Retixa appliance has been designed from scratch to solve the issues above and help telcos build revenues from Digital Lifestyle Services. Implementation cost with Retixa is estimated to be 3-5 times lower than state-of-the-art and the duration of the project is 3-6 months.