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Why and how telcos can dominate the 5G opportunity

Why and how telcos can dominate the 5G opportunity
Abdullah Muhsin, Senior Content Marketing Officer at Apigate

Telcos are in need of a miracle. Profits from traditional revenue streams have been shrinking for years now and, as consumers are increasingly switching to internet and data as their preferred communications protocol, revenues from previously dominant mobile voice and text services have worryingly slumped.

During the same time, an increase in personalized digital services helped Over The Top (OTT) service providers reach the dynamic end of the value chain and tap into lucrative market segments.

Desperate to stay afloat, telcos are forced to revisit revenue strategies to identify, secure and develop new customers and markets. 

In attempts to broaden service offerings, telcos reinforced traditional text and voice with data services. Telcos have largely discontinued per unit pricing models for text and voice services and instead, are focusing on service bundling models - packages that include pre-allocated voice, text and data quotas for fixed prices. 

And herein lies the problem — this means telcos are still looking at old models. Whether they gain revenues from traditional text and voice services or data usage, telcos are still positioned in the middle, between OTT service providers and end-users.

What if telcos decide to broaden their position in the business by transforming into the digital services arena - similar to the services that OTT providers offer?

Many anticipate that 5G will make this happen, but the truth is, 5G networks alone will not make a difference for the telco. Activating and sustaining a dominant 5G infrastructure network will require a considerable sum of investment - which may prove irrecoverable due to declining revenue trends. 

5G alone is not the solution, although it can be of crucial value if next-generation, innovative digital services are built upon and delivered over the infrastructure. In this blog post, we explore the avenues for telcos to tap into and secure new revenue streams post-digital transformation. 

Ubiquitous digitization — the timing is right 

There is no arguing that 5G connectivity is opening up a plethora of opportunities for the telco. 

Faster data transfer speeds, minimal latency, and bigger bandwidth is just the beginning. Furthermore, along with 5G, MNOs will be able to connect to more services, gather more data in less time, and fine-tune service offerings. 

5G will no doubt catalyze the digital transformation journey of the telecommunications industry. Video streaming will peak due to unprecedented demand - especially from emerging economies such as Africa and Asia. 5G speeds will allow consumers to stream 4K video and rich-content on impulse - without interruptions or network lag. 

Ubiquitous 5G bandwidth will enable digital services to connect cars, homes, public infrastructure and entire cities to the internet of things - and deliver ‘one-touch’ connected services to the consumer's smartphone. These new and exciting instant digital experiences will become the new baseline for consumer loyalty. And 5G will help telcos provide these experiences. 

The initial stages of the digitization journey will be to initiate and experience a paradigm shift. Telcos too need to identify as digital services providers, not simply as enablers. 

Operating upon a digital services business model will help telco to utilize 5G to exponentially enhance the value of telco-owned services and secure new avenues for revenues.

Digitization to Monetization — The last mile is an API obstacle course 

The journey from digitization to monetization is an obvious one. Service components that are digitized to the point that they are programmable interfaces to an application - or in other words - Application Programming Interfaces (APIs), can be plugged into a comprehensive service solution or platform. Digitization of an application helps owners capture usage data, and program applications to autonomously respond to complex customer requests.

Such a mechanism allows for whole systems to become intelligent as to what’s happening - and make intelligent calls to streamline processes, eliminate waste and drive customer engagement. 

However, digitization means nothing if investments do not prove a return or even worse, investments are not recoverable. 

Telco-based APIs for monetization 

Next, we explore the following tried and tested monetization mechanisms that telcos can implement - to secure revenues off digital transformation efforts and expand into telco-owned Fintech solutions for third-party vendors who are catering to telco subscribers. Such mechanisms provide unprecedented levels of convenience that will help eliminate customer-drop off points in the digital buyer journey - and will be instrumental in increasing conversion rates and help reduce the costs of acquiring a customer. 

Direct Carrier Billing — more for everyone

Both MNOs and content providers can earn attract more digital consumers and thus expect greater revenues. Direct Carrier Billing enables consumers to purchase a service or product and add the cost of the purchase to their existing mobile account - thus eliminating the need to visit digital vendors or external payment gateways to consume the desired service. 

E-Wallets — eliminating friction points

Through their preferred e-wallet, mobile subscribers can consume content and services easily and make purchases swiftly.

E-wallets allow service providers to charge wallet accounts of mobile subscribers. As subscribers will have the content delivered directly, this will remove friction points. In turn, the customer journey will be seamless and the risk of abandonment reduced. 

Microcredit — increasing user retention

Finally, with microcredit facilities, consumers can expect digitelcos to lend credits for specific content sessions.

Consumers will continue to be delighted as even though they are short of credits, their service provider allows them to consume the service on a - ‘consume now, pay later’ basis.

Microcredit facilities are anticipated to drive user retention to telcos and longevity to content partners. Furthermore, customers will benefit because of a seamless experience.

Finding ways to monetize assets by smoothly delivering content to end users is key to customer loyalty. And it starts with an API ecosystem.

Thank you for reading our latest blog post. Are you interested in leveraging your infrastructure assets and expanding your revenue streams? Get in touch with us today and let's discuss how your telco can benefit from an API-driven monetization platform.

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