BI and Analytics to Mould Indian Telecom's Future

India is the fastest growing market in the world in terms of subscriber additions. Operators have been adding more than 10 mn subscribers every month since the past 12 months. The mobile penetration has long overtaken the fixed line penetration and the penetration in many cities is nearing 100% of addressable population. Communication has become a basic social need.

There are early evidences that the telecom subscriber base in India will have a urban versus rural divide. The behavior and usage patterns are likely to be different in these segments. While in rural markets, the key factor is enabling basic connectivity, in urban markets it is the drive to have infotainment and convenience by a more tech savvy population. Hence, the usage of value added services would be on the rise. Such services include traditional VAS services and data heavy services. Some of these newer services are mobile games, location based applications, movies on demand, etc. The impending launch of 'Mobile Number Portability' across the country would fuel the migration of subscribers to a better and cheaper alternate operators. This will force the operators to understand the needs of their higher value customer segments better for retention and increased loyalty.

Technically, the projected growth in telecom generates huge amount of data for every transaction that happens with a subscriber as well as data generated through other processes of the telcos. But the striking truth is more data necessarily does not mean more intelligence or better decisions. More efficient way of processing of large data and deriving effective information/knowledge for decision making is the ultimate function of any BI/BA effort in a telco. In view of the above trends of urban-rural divide and MNP, the need for effective BI and analytics would be paramount in the coming months.

What do Indian Telcos Need Today?

In a telco setup, deeper understanding of the subscriber base and predicting their behavioral characteristics well in advance will keep the company on a profitable path. In turbulent markets like India where multiple operators are competing with each other, this requirement becomes much more important as the adage 'whoever controls the future will stay in businesses' aptly suits the scenario.

Insert Subscribers Revenue Pattern

Telco has the classic 80/20 distribution when it comes to its subscriber base and revenue as shown in the long tail chart. Since the higher revenue comes from a small percentage of subscriber base, any loss in that group will result in a drastic drop in revenue. On the other hand, when the customers in the long tail are not properly handled, it may lead to drain on revenue. Hence, telcos need a unified decision support system, which can provide the analytics at different levels as per the need. This gives rise to the need for a next gen BI/BA system explained in the following sections.

Gen Next BI and Analytics-What is Different?

The last generation of Business Intelligence and Analytics were technology focused. Each component of the BI architecture/stack was sourced from multiple vendors resulting in an integration nightmare. Recent consolidation of the BI market by the majors like IBM, Oracle, SAP and Microsoft has given a fillip to a single vendor stack for all software components and a clear roadmap of future developments. This augmented by more demanding and involved business users as well as increasing competition among telcos has created a need for unified approach to business intelligence and analytics in telecom space.

The next generation BI/BA for telecom will be different from last generation systems both in terms of technology as well as the functional features. Gen X BI/Analytics was limited to privileged few while the next generation-Gen Y BI/Analytics will be pervasive, enabling the information democracy by providing relevant decision models to arrive at a better decision using insight information at hand insights to everyone at their level.

How to Make Unified Decision Support System a Reality?

The last generation BI/Analytics used isolated tools and techniques for creation, assimilation and action of decision support information. However, the next generation BI/Analytics, which is a game changer for telecom will provide a unified or an integrated macro and micro level decision support for all the concerned in a telco.

For eg, at the macro or the aggregate level the system may suggest a demographic segment for acquisition which can be used by regional manager and at the micro/individual level the field executive can qualify a potential lead in that segment for acquisition to ensure expected profitability and loyalty. Similarly in retention a macro level decision support may provide churn forecast for different segments and at the micro level the retention team may have the churn propensity score for each customer in a given segment. On the marketing front, profiling provides insights into planning suitable campaigns for acquisition and retention.

Insert Integrated Analytics Approach for Telcos

Aggregate analytics uses the data at segment or group level to make the analysis of distinctions and predictions. This may include the group level revenue in the future, churn rate in the cohort, shrinkage/growth of different segments, segments level profitability etc. Once the block of interest is found an individual level analysis can be carried out to build predictive models for scoring for various activities like acquisition, retention, cross/upsell etc.

The last generation analytics was focused more on structured data and behavioral models which is fast changing to include social models with unstructured data. This will need analyzing the social influence and sentiments of subscribers in identifying the opinion leaders, influencers, detractors, loyalists and serving them better. This requires a unified platform to build models from behavioral data, social network data and also opinion polls. By providing, a continuous process of correlating different models to have an edge over competition BI & Analytics will be game changers for Indian telcos.

This type of integrated solution also called a vertical solution will provide the telcos the secret weapon to dissect the customer behavior and predict the next possible activity.

Decision Support Systems in Telecom

The applications of the unified decision support system span across all critical operational areas of telecom like

Marketing, CRM & Sales: The large amount amounts of customer transaction and call detail data, collected in the operational systems of telcos, provide valuable insights to understand and predict consumer behavior.

Fraud Detection: Fraud is a serious concern for telecom companies globally leading to a revenue loss for the operators and the burden is being passed on to the existing customers. Using predictive modeling and analytics fraud can be controlled. There are a lot of statistical techniques like rule based analytics, clustering, Bayesian rules, visualization methods, and neural network classification equipped to handle fraud adeptly.

Network Management: Growing and maintaining profit margins in the telecommunications industry requires optimum network efficiency and ensuring high network reliability. BI and Data Mining analytical tools have proven to be very effective for comparing a wide range of metrics across network operations, creating real-time reports for identifying problems that need immediate attention, and generating alerts for instant notification of emergency situations requiring rapid response.

The next-gen BI will see a increased role in the telecommunication compared to the last generation BI and this is the consequence of the competitive landscape and business user focused BI . While the product and services differentiation are becoming blurred, companies need to differentiate themselves from the rest by ore effective use of the transactional data created . This will give telcos the much needed competitive edge by helping them to cut down operational costs, reduce revenue leakages, understand consumer behavior and offer better products & services. Hence BI & Analytics are increasingly vital today for a telcos sustainable growth in a dynamic environment.

Dr Jay B Simha
The author is chief technology
officer, ABIBA Systems
vadmail@cybermedia.co.in