The CSP to DSP Mandate
Network Operators have offered voice communications services for over a hundred years to consumers and businesses around the world.
Their sales and support operations, built upon voice communications with knowledgeable Customer Service Agents in efficient call centers were the envy of the rest of the industries, who adopted similar approaches – using the communications technology provided by the Network Operators themselves!
But the digital age is upon us and the old voice-centric operations are no longer agile enough, efficient enough, or even desired by the new generation of digital literati. We have been conditioned to interact with a new breed of companies – Digital Providers (DPs) – who present themselves and their offerings to their customers in a fully digital way. We all interact with these DPs nearly every day. Companies such as Amazon, Zappos and eBay developed as DPs in the early days of the Internet, while other players such as Alibaba and Uber have burst onto the scene more recently. What characterizes these DPs? First and foremost, they are fully online. We interact with them online, through a software system which gives us information and instantaneous direct control over the transaction. Which companies are not going digital? None, although the transition is still in its infancy. But online already represent almost 5% of retail sales, with 25% of consumers using a mobile device – with the whole area growing by about 20% per year.
In telecoms, the transactions are very often much more complex than in retail, involving subscriptions, constant and near real-time network interactions with service control software, up-to-the-moment network usage tracking for each and every user, the administration of shared balances, etc. So a digital service provider (DSP) is much more complex than a DP. But the digital savvy customers want, and even demand, a digital interface for operating with these and all companies – with 50% of users preferring self-service channels for their communications needs. There are also revenue advantages, with offer-acceptance rates increasing up to 25%, and ARPU increasing 18% or more when offers are personalized for the customer.
When offering its new range of digital services, a CSP must become a DSP just to stay competitive with the competing over-the-top (OTT) players – competitive in responsiveness, in ease of use, and in low cost. But, increasingly, the CSP, like all other companies, must become a DSP as it supports its traditional services, also. The opportunity also exists for the DSPs to provide technological enablers to its customers – mobile money, identity management, among others – allowing them to become DPs quickly and effectively.
To not do so, invites in the competition.