CSP to DSP: A Journey of Transformation
As mobile technologies have evolved, so has the telecommunications customer base. While ten years ago, customers were looking for little more than access, the ubiquity of smartphones and tablets has created new demands and opportunities that expand the role of the service provider.
Simple one-fits-all service worked in the past, but as technology has evolved, so have customer needs and expectations. A recent IBM study on Generation Z showed that 75 percent of respondents picked a mobile phone or smartphone as their device of choice, and 47 percent said they use their smartphones when shopping in a store. Further, prior to making any purchasing decisions, Generation Z uses their phones to research products and services to compare prices and discounts.
So, as technologies and consumers evolve, CSPs can find themselves left behind, crippled by their legacy systems into offering impersonal plans, leaving current and potential customers unsatisfied.
It is, therefore, becoming increasingly clear that CSPs should strongly consider transforming into DSPs (Digital Service Providers). What distinguishes DSPs is precisely this fine-grained service, and ability to bundle several offerings, such as broadband access, content, and mobile apps.
A DSP is a service provider which has evolved from offering just the core telecom services, to providing broadband access, content, services and mobile apps to its customers.
While this evolution can be challenging, it is a necessity for providers who wish to remain competitive. In order to fully monetize their networks, it is imperative that they offer bundled and nuanced plans to a customer base ready to pay for these features.
But what exactly does it take to transform from a CSP to DSP?
How to evolve from a CSP to a DSP?
Becoming a DSP is about becoming more responsive and adaptable to consumers’ wants and needs around mobile data services. A stellar customer experience – complete with personalized and contextual mobile data offers, real-time usage alerts, unique roaming offers, and everything digital – is central to being successful as a DSP.
The core ingredients of a successful DSP:
- Subscriber Segmentation Capabilities: A CSP needs to have granular segmentation capabilities based on parameters such as location, age, gender, consumption, device type, and many more. Mobile data needs for each subscriber varies greatly and requires this segmentation for smart offers that increase ARPU. A recent study by The Manifest reveals that of the 511 smartphone users surveyed, almost 40 percent use social media apps frequently – almost four times more than any gaming, communication or messaging apps. However, if we were to consider another context – enterprise customers – we’d find that their aim is to limit their employees’ use on certain social websites while at work and instead promote other services. To cater to these two different segments, an operator must create a customized offer for each.
- Rich Contextual Data Offer Creation: CSPs should be able to create offers based on multiple parameters: QoS, apps and content, time, device type, data usage, and subscriber profile, as well as network-centric parameters like congestion, access network, and location.
- Sponsored Apps and Offers: CSPs can partner with other ecosystem players, like OTT apps or digital services, to offer special promotions or plans that are subsidized by the partner. For example, an operator may offer a plan where video streaming is free from one of their local video partners, to drive consumption of that content.
- CSPs Own App: A lot of CSPs are choosing this option and urging users to install their native app. Using the app, subscribers can instantly purchase a data pass, or even create their own, based on how much data and validity they want to buy. In addition, users can subscribe to personalized data usage alerts. Subscribers can also elect to set their own bandwidth speeds for data, to manage and even “stretch” their usage.
The transformation of a CSP into a DSP is indeed disruptive, but it is the need of the hour. CSPs need to evolve their legacy systems, molding their business models to stay relevant and profitable in the market.
In the coming times, consumers and their needs will be the driving force of the market. CSPs need to understand this and create valuable offerings and business processes that put consumers at the center. CSPs need to plan ahead of the changing market requirements to beat the curve and relevant to their customers at all times.
Product Owner, Digital BSS