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Telecom: A Sector on the Edge of Revolution

In these fast-changing times, how can telecom companies create an environment that will enable them to thrive and deliver the services consumers need and expect? Knowing how to leverage one’s brand is key.

Currently, 43 percent of the world’s population is connected to the internet. In the next 20 years, the digital industry worldwide will have the same size economy as the United States. This digital revolution is changing the world before our eyes, faster than anyone could have imagined—but progress cannot continue without the telecommunication companies paving the way.

Mobile changed it all

One development, more than any other, has accelerated this revolution: mobile technology. Its proliferation and widespread adoption has dramatically shifted our economies as innovations in connectivity alter the way each and every industry thinks about their business. From the way car manufacturers design cars and healthcare providers create products and services to the way traditional consumer goods are altered to meet our evolving demands—in the connected world, everything is faster, smarter, and more convenient than ever before. But to enable these amazing next generation products and services, brands are, by necessity, partnering with mobile platforms and providers, or developing their own networks.

Volvo, for example, is hoping to cut down on accidents and improve road safety by embedding sensors in its vehicles that will transmit information about road surfaces. By sending data on road issues to Volvo’s own cloud network, based on Ericsson’s Multiservice Delivery Platform, Volvo can alert other drivers, as well as road authorities and local officials to potential risks. In another example, Oral-B, with the help of mobile developers, is taking toothbrush functionality into the 21st Century with a “Bluetoothbrush” that not only stores data to guide and personalize your mouth-cleaning process, but also keeps you updated on news and weather. And hoping to ensure that no suitcase is ever lost again, Bluesmart has developed a connected suitcase with functionalities enabled by a Telefónica­powered SIM card that will be connected via 3G to Telefónica’s M2M network.

With mobile suddenly at the center of our lives, and keeping us connected to so many important things—including our personal data—it’s no wonder consumer expectations are running at an all-time high. Naturally, the more we’re entrusting our data to the cloud, brands, and the third-party servers they often rely on, the more crucial security becomes. At the same time, the more we share, the more concerned we become about privacy. As difficult a balance as it is to strike, data security and privacy are both high priorities for consumers. Further, the need for simplicity in the face of complexity persists, as does the need for a “digital identity” in a world where the average consumer has 25 online usernames and 5 different passwords.

And, as new levels of connectivity and kinds of transacting arise, the demand for “mobile money” is increasing as well. Those who were once without access to the financial markets now desire tools that are accessible and adoptable within their communities. The bottom line? We now depend on mobile technology to enhance our lives and boost our economies.

The battle to meet demands

These topics and more were discussed this year at the GSMA Mobile World Congress in Barcelona, but those that took center-stage were issues surrounding spectrum, digital inclusion, and net neutrality. With the largest number of attendees of any event in the mobile industry—and a truly global event—perhaps there is no better barometer for the state of the industry (and the challenges it faces).

Against the backdrop described above, it’s not a surprise that the largest issues telecommunications companies are grappling with are the barriers to amplifying mobile connectivity. As consumer demands continue to increase and tolerance for lagging speed and high costs decreases, telcos are battling for the platform to meet these demands.

Spectrum must be provided. But figuring out who gets which slivers of this limited natural resource, for which purposes, amounts to a political minefield. With broadcasters and satellites in fear of losing allocations and governments focused on driving national revenue, conflicting priorities and growing needs that are outpacing supply have led to regulatory quandaries and a sense of scarcity in the telecom industry. The supply and demand imbalance, in other words, makes the real estate too expensive to ensure enough investment to build the house, so to speak.

With consumers buying more smartphones and tablets, which according to the FCC, use 24 and 122 times more data than traditional cell phones respectively, a spectrum shortage is a challenge indeed—and a serious barrier to digital inclusion. In order to reach the industry goal of 3.8 mobile internet users worldwide by 2020, investments by mobile operators are a must, as is freeing up the necessary spectrum to fuel such a fast-growing industry.

As regulators grapple with the spectrum dilemma the solutions are not yet clear, but what is clear is that the policies set today will have a lasting effect well into the future. Consumers also seem to be cognizant of the crossroads we’ve reached and the future implications of policy, which is why net neutrality became a burning issue over the past decade, culminating in a recent win for the open internet.

In an era in which the consumer is more empowered and government officials and regulators act as gatekeepers, mobile operators’ desire for “Same Service, Same Rules” must realize that their brand now plays a critical role, not only with consumers, but also with other stakeholders. It’s vital for the telcos to understand the levers of influence that drive choice, investment, and allocation with government officials and regulators. Without lifting the barriers to innovation, the consumer demand will never be met, and the telecommunications businesses and brands will be to blame.

As marketers, we sometimes lose sight of the world beyond the consumer. But in an industry that is so complex, changing so fast and, in a sense, battling for its survival, influencing policy (that will help preserve an environment favorable to expanding services) is just as important as—and is, in fact, vital to meeting, consumer demand.

In this time of transition, at the edge of revolution, brands are key tools. Brands build trust, loyalty—and bridges. Knowing how to leverage them will allow telecom companies to create a world that will allow their businesses to thrive, and enable them to deliver the services consumers need and expect in the age of mobile.

If you would like to discuss this article with Sarah, please send an email to hello@interbrand.com.

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