When Bad News is Good News: Ernst & Young release report on telco risk

by Vikki Herrera, Director of Corporate Marketing

The number-one risk headlining Ernst & Young's annual Top 10 Risks in Telecommunications report is "Losing Ownership of the Client," (also top of the list in 2009). Different this year is the context in which E&Y lays out their study. The entire intro is devoted to describing the "deluge of data" across operator networks. A key paragraph:

"With consumers apparently intent on making ever greater usage of content-rich mobile internet services, and current telecoms business models not optimized for capturing revenues from data, the underlying problem for operators is that the growth in mobile data traffic is far outpacing the growth in mobile data revenues."

Number two on the list? "Failure to Maximize Customer Value," which is really the primary cause of risk #1. Operators may be losing ownership of the subscriber relationship, but they still own the subscriber data. With the right analytics system in place – to collect the data, interpret it, and finally use it to their advantage – mobile operators will undoubtedly increase their value and the perception of their value to partners and subscribers alike.

User data can fuel smarter video optimization which will stretch existing bandwidth farther. Policy control and creative pricing can only benefit from understanding user behavior. And let's not forget advertising, a potentially huge new revenue stream that can only benefit from the unique value of a mobile operator's data assets.