Analysis by Hyacinthe Havet, Big Data Senior Manager at Sofrecom
Operators have access to fantastic data warehouses bursting with information about people's usages, locations and movements, websites they visit, videos they watch, photos, transactions and much more. Turning this asset to profit while respecting their subscribers' privacy is quite a challenge!
Profitable internal use
Telcos analyze these data first to support their own operations.
Marketing and sales managers are the prime users of big data. Real-time data processing and cross-referencing in particular help them to validate their perceptions of the market and to react rapidly and opportunistically. They exploit big data in customer loyalty building programs and marketing campaigns; they use them to seduce new customers, improve physical and digital distribution networks, and confirm that their products and services match customers' real needs.
Today big data is also revealing great promise as a means of cutting costs by helping to optimize processes, monitor activities in real time, and detect errors and fraud faster (and eradicate these automatically).
Finally, big data can be useful in embellishing an operator's image by orienting his exposure on social media and helping him to follow trends, identify influencers and react rapidly to critics.
Big data monetization still nascent but showing great potential
Customer data is not only used in-house, it is now even being monetized, in other words sold to third parties. The wide variety of data available opens up a multitude of possible usages. Demand for data comes from all quarters and concerns every aspect of our society: healthcare, insurance, banking, retail distribution, transport, town planning, energy, tourism, home automation…
However, data commercialization makes operators very nervous, since they want to guarantee data security and respect their customers' privacy. One false step could durably damage their reputation.
Protecting data to maintain customers' trust is a major challenge
Consumers are clearly increasingly concerned about their privacy, so it is vital to exploit their data in a reliable and secure manner. This means that the results of all data analytics must be strictly anonymous and irreversible, and that measures taken to prevent data piracy must be reinforced to ensure totally reliability.
Legislation is of considerable help, notably in Europe and the United States where regulations already exist (or are in the pipeline) to control data sharing and usage (see the box). Transparency, customer opt-in, protection of data against theft and abusive use are the principal goals of these laws that aim to make enterprises behave responsibly, to restore public confidence and to encourage ethical data usages that can create value both for enterprises and the people who actually generate the data.
Many operators, aware of increasing consumer concerns and in anticipation of future directives, are now publicizing their commitment to personal data protection.
New laws, stronger anti-piracy measures and rising consumer confidence are at last opening up very promising monetization opportunities.
|Europe: the European Parliament has adopted the General Data Protection Regulation (GDPR) which becomes applicable on 25th May 2018. These regulations cover the processing of personal data and free circulation and sharing of such data. They will apply to all companies, even non-European ones, working in Europe when the data concern EU residents.
United States: the Federal Communications Commission (FCC) has approved general privacy rules for Internet service providers (ISP). Its key requirements are:
• Transparency: ISPs must inform subscribers of the types of information they collect and how and with whom and for what purposes they share it
• Consent (opt-in): ISPs must obtain subscribers' prior consent before sharing their data
• Accept all customers: ISPs may not refuse to serve subscribers who do not agree to the use or sharing of their data
• Pay-for-privacy: ISPs may offer discounts in exchange for subscribers' consent to use their data
• Data security and breach notifications: ISPs must take all reasonable measures to protect consumers' data and inform them of any incidents