The digital challenge for telecom operators The technological capabilities operators have enabled, along with the evolution of people’s preferences, have raised expectations across two key areas: • Commerce – 60 per cent of omni-channel shoppers are increasing the volume of purchases made on their 7 smartphone. 8 • Account management and support – people prefer reaching brands online vs. the phone. The task of providing the desired level of immediacy and agility in commerce and service is made more challenging for telecom companies by the increasing breadth and complexity of their business. Consolidation in many markets between organizations that have traditionally occupied separate market verticals, such as fixed line, broadband, broadcasting and content has increased the variety of customer archetypes in the base. This will only get more complex as new types of connected devices such as cars and connected homes enter the mass market. Responding to the twin challenge of evolving customer expectations and rapidly changing mobile technology requires telecom companies to embrace some key cultural and strategic characteristics of Digital Economy businesses in order to better reflect their market. Consumers now (sometimes unknowingly) expect more personalization in their lifecycle with businesses. Mobile operators therefore need to adapt to people’s behavior on mobile, across their customers’ lifecycle with them, rather than forcing their customers to correspond to their traditional portfolio of services and channels (e.g. through calls or in-store visits). Increasing personalization may entail decoupling those people and technologies that touch the customer from the back-office and network technology. This alone represents a transformational challenge. The other challenge is how to create an environment to innovate and fail faster in order to change their business models and how consumers view them. An industry example of this is AT&T’s Emerging Devices Organization (EDO). Characterized as a ‘start up within the larger organization’, the EDO was formed to quickly identify and create new 9 business models within the broader mobile ecosystem. By enabling this kind of culture of innovation, operators will be able to more effectively launch and assess new ventures as well as humanize their brand, which bodes well in this era of personalization. Importantly, operators must embrace something they know to be true already: they must recognize and optimize their participation in the digital ecosystem. This means understanding that people are increasingly in control of their experiences on mobile and are making choices from an array of providers. Some will want simplicity; others will want to optimize for their particular preferences. To that end, it would be overly simplistic for operators to regard the emergence of OTT services as just a threat. People clearly enjoy using these services and have begun to gradually evolve their behaviors to emphasize their use. Leading operators have already taken steps to benefit from the role of OTTs by using the engaging channels they offer to deepen their relationship with consumers in all parts of the sales and service cycle. In the following section we describe how Rogers Communications of Canada used an array of online tools including apps and large, people-based platforms such as Facebook Messenger (which, as of January 2016, 800 million people 10 globally use each month ) to measurably enhance customer satisfaction. Importantly, operators must embrace something they know to be true already: they must recognize and optimize their participation in the digital ecosystem. 4