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Telecom Trend Undercurrents

Originally published February 21, 2006

As I perused the various and sundry sources of information that cross my desk/e-mail box/RSS reader, I came across an interesting article from the McKinsey Quarterly by Ian Davis and Elizabeth Stephenson regarding upcoming macroeconomic trends. Like most January articles that chart upcoming trends, this one has its own top ten trends for 2006. However, this set of trends includes an interesting observation that sets it apart:

"Those who say that business success is all about execution are wrong. ...in sectors such as banking, telecom, and technology, almost two-thirds of the organic growth of listed Western companies can be attributed to being in the right markets and geographies. Companies that ride the currents succeed; those that swim against them usually struggle."

I was inspired by the observation to use the article as a framework for this article. Davis and Stephenson talk in high terms about the upcoming "currents" of business, and many of the other bits of information from my desk/e-mail box/RSS reader provide some interesting detail to those "currents" for telecom service providers and their business intelligence organizations.

Information Access
Davis and Stephenson state that "new models of knowledge production, access, distribution, and ownership are emerging" as key components of business in the next decade. I see this in direct correlation to the continued importance of business intelligence and business analytics projects for telecom service providers. However, if the information from your business intelligence or business analytics project/environment never gets used, what will happen to your budget/project/organization?

CIO's Meridith Levinson has a great article about the advantages of internally marketing your "products and services" to your fellow employees. The article goes beyond the typical kickoff meetings and directly addresses how to talk to your internal customers about your business intelligence offerings.

This is extremely important with organizations where the image of the business intelligence/data warehouse environment is tainted by bad experiences. Many business intelligence/data warehouse customers follow the "fool me once, shame on you; fool me twice, shame on me" mantra. Consequently, there often is a very skeptical customer base, even if the underlying issues within this environment have been resolved.

However, when you build a new/renewed internal market for your offerings, how do you manage expectations so that these new customers are not over-promised, under-delivered and consequently treat your organization harshly? It is one thing to serve your internal customers and fellow employees; it is quite another when those fellow employees start treating you and your organization like a rented mule. Dean Meyer, also at CIO, has a good article about managing expectations for internal customers.

I particularly like his recommendation to create a checkbook for your internal customers so that they do not view your business intelligence offerings as free. This should be good way to prevent the overloading of data into a business intelligence/data warehouse environment and also avoid the under use of that data once it is incorporated into that environment.

Government Involvement
Davis and Stephenson also mention how "big business will come under increasingly sharp scrutiny." I see this as additional "interaction" with government agencies such as the Federal Communications Commission, tax collectors and attorneys general at both the federal and state levels.

In early February, the Federal Communications Commission (FCC) took up the issue of cell phone industry customer record privacy. While this hearing related directly to fraudulent procurement of customer records, I believe that this is the tip of a much larger privacy issue regarding customer records. That is, telecom service providers, and their operations and business intelligence organizations, will not be entirely trusted to provide safeguards on the storage, data mining, and backup/archive of those detail records (see one of the many stories that appeared in 2005 about lost or missing storage tapes).

Eventually, one or more government agencies will become involved for either political or criminal investigation reasons. If not at the federal level via the FCC, I am sure that Eliott Spitzer, Attorney General of New York, will take a look at the situation and spur some action with the organizations that do business in his jurisdiction.

An article by Anne Broache of CNET News.com regarding a recent Government Accounting Office (GAO) report states that despite the title of the "Internet Tax Freedom Act," there are certain "wholesale" aspects of Voice over Internet Protocol (VoIP) and IP-based television services (IPTV) that may be taxable, just like their traditional phone service and cable television brothers. I am sure that this GAO report will find advocates and detractors across the telecom industry. In an environment where state governments and the federal government are looking for new revenue streams, I can see where the data warehouse environment will become key in determining exactly which transactions may be subject to new taxes.

Changing Telecom Business Model
Davis and Stephenson project the consumer landscape will change in the next 10 years. Specifically, they talk about currently under-served populations, such as the Hispanic population in the United States, who will gain significant buying power as their disposable incomes increase. Accordingly, these groups will start to increase their use of telecom services to become more connected, and those services will need to match their needs and consumer demands. Ring tones and new Mobile Network Virtual Operator (MNVO) services are just the tip of the iceberg.

In the near term, many of these under-served populations will be provided with Internet connectivity services by their local municipalities. Philadelphia, San Francisco and Denver are already moving to deploy WiFi networks for their constituents. While this will initially be directed toward providing basic services, how far behind will Vonage over the muni-WiFi be? I'm sure that the local RBOC will not appreciate the competition.

For telecom service providers, this will start to undercut their position to provide services to those under-served populations. It will be the role of the business intelligence organizations to provide the information to marketing and customer care to direct and promote the new services these populations demand/require.

At the other end of the spectrum, wireless broadband is already starting to be a high-value offering for connected users who want that "hot spot" connectivity anywhere. Verizon Wireless is probably the best advertised version of this service. However, as Verizon Wireless implements this service in the northeastern corridor, how will this affect the DSL business of Verizon?

It is evident that the nature of the telecom service providers' business model is changing. One area will show growth potential and be pursued with vigor, but at what cost to other portfolio activities or those of associated corporate organizations? Again, the business intelligence organization will be key in providing the right information to direct the correct service or mix of services.

Enhance Your Knowledge
As always, I do not like to promote one book over others. However, I am a decided evangelist for focusing on core competencies in business. I believe that an organization should decide what it does well to generate revenue and do that to the best of its ability. Anything that promotes that side of business catches my eye. Douglas Rushkoff has a book that I feel is worth a read for those who want to learn more about "focusing inside the box."

  • John MyersJohn Myers

    John Myers, a senior analyst in the business intelligence (BI) practice at  Enterprise Management Associates (EMA). In this role, John delivers comprehensive coverage of the business intelligence and data warehouse industry with a focus on database management, data integration, data visualization, and process management solutions. Prior to joining EMA, John spent over ten years working with business analytics implementations associated with the telecommunications industry.

    John may be contacted by email at JMyers@enterprisemanagement.com.

    Editor's note: More telecom articles, resources, news and events are available in the BeyeNETWORK's Telecom Channel. Be sure to visit today!

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