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Telco Marketers Eye Over-the-Top Players as Opportunity, Not Threat; Providers Look to Boost Revenues Through Partnerships and Alliances

Research Sponsored by HP Shows Marketers Are Enthusiastic About Owning Customer Experience; Call for New Views Into Customer Intelligence and Behaviors to Optimize Subscriber Pricing and Service Models

PALO ALTO, CA -- (Marketwire) -- 01/24/13 -- Marketers in the $1.3 trillion global telecommunications industry are being both challenged and enabled by free over-the-top (OTT) communications service providers, such as Google, Skype and Facebook. A new Chief Marketing Officer (CMO) Council study, conducted in partnership with HP, shows that while these companies are supplying customers with sophisticated web-based features that are competing with fixed and mobile operators, OTT players are also being courted for partnerships and revenue-sharing opportunities by traditional communications services providers (CSPs).

Besides the legacy local and long-distance wire line phone services, the CSP sector also includes wireless communications, Internet services, fiber optics networks, cable TV networks and commercial satellite communications.

Some 44 percent of telco marketers who participated in the CMO Council's new "Profitability From Subscriber Acuity" study during the second to fourth quarters of 2012 are actively exploring OTT partnerships and revenue-sharing opportunities. In addition, 31 percent are identifying potential revenue streams from new products or services that can be offered to OTT players, including subscriber analytics and behavioral insights. This represents a significant shift in the mindset of telco marketers. Just one year ago, a CMO Council study dubbed "Dexterity From Subscriber Complexity" reported that OTT represented a threat, not an opportunity. In that study, 88 percent of executives considered OTT innovators as competitors, and only 6 percent were actively forging partnerships.

"This shift tracks with marketing's role of leading the charge for new market and revenue opportunities," said Liz Miller, Vice President of Programs for the CMO Council. "What is clear from this study is that marketing has been tasked with owning the customer experience and driving bottom-line revenue improvements. Considering that research has put the potential revenue loss from OTT starting at $13.8 billion in 2011 alone, it is not surprising that telco marketers see OTT as an opportunity to exploit."

While 222 CSP marketers participating in the study have oversight across the majority of customer touchpoints that most impact customer experience, they are still seeking deeper views into key front-line areas like customer support, in-store strategy and channel management. To facilitate the flow of information and processes across these areas, marketing is also taking a more active role in identifying key technology platforms and solutions as 38 percent of respondents serve as the key decision makers while an additional 38 percent serve as key influencers in the technology selection process.

But despite the significant commitment to advancing the customer experience, marketers are being stymied by a lack of visibility and insight into critical areas of intelligence and analytics. Only 5 percent of marketers have access to an automated solution that leverages data and intelligence to enable improved decisions or personalize individual engagements.

This leaves most organizations to rely on:

  • Monthly meetings where insights and intelligence are shared with senior management (59 percent)
  • Monthly customer insight and analytics reports (57 percent)
  • Analytics dashboards with limited general user profile information (43 percent)

"This lack of visibility into the key drivers of customer behavior leaves a significant opportunity to drive incremental revenue and improve engagement performance," said Miguel Carrero, Director of Actionable Customer Intelligence Solutions, HP Enterprise Services. "Marketing is being asked to sway behaviors but simply does not have the tools needed to make those core decisions effectively. However, this research also shows that above all else, marketers understand what they need to be more effective and what points of measurement will enable real change and improvements in the customer experience."

Additional key findings from the report show that:

  • Marketing is deeply involved in identifying and developing business opportunities, including new pricing plans or new products and services. Twenty-nine percent are driving the process while 36 percent are deeply involved as the key contributor.
  • Fifty-four percent of marketers are being brought into the pricing and product development discussion from the very start of the process versus 9 percent who feel they are brought in too late in the cycle.
  • Siloed data is the top reason marketers feel held back in their ability to influence and optimize pricing models. This is followed by the lack of a complete view of the customer (39 percent) and a corporate mindset that is resistant to change (37 percent).
  • Nearly one in four marketers feels as if he or she is introducing new pricing plans to customers all the time and is heavily leveraging in-store engagements, email and advertising in both traditional and online channels. Unfortunately, half of respondents feel these channels are only moderately effective.

The detailed findings of this study, along with summaries of in-depth interviews with marketing leaders from global CSPs including AT&T, Bell Canada, Deutsche Telekom, Etisalat, MTN, Optus, Orange, Sprint, STC VIVA, Telefonica, Telstra, Virgin Mobile and Vodafone are included in the 90-page comprehensive report, now available for download from (www.cmocouncil.org/r/profitability-from-subscriber-acuity). The study is outlined question by question through summary findings and detailed charts and also includes an infographic.

About HP Enterprise Services
HP helps the world's CSPs transform the way they do business and grow in a fast-changing market. CSPs must meet the huge demand for new, personalized services while building high-speed networks and streamlining internal operations. Facing competition from OTT rivals, CSPs must develop new business models and revenue streams that leverage their core assets, the network and customer information. HP is unmatched in its ability to help CSPs drive transformation, with more than 30 years of telecom experience, global IT leadership, expertise in entertainment and leadership in consumer devices.

HP offers an end-to-end portfolio, including core telecom network infrastructure, convergent IT and telecom solutions, software portfolios for OSS and BSS, service delivery platforms, subscriber data management, cloud service enablement, professional services (including business consulting, integration and managed services/outsourcing), joint go-to-market programs, carrier-grade servers, storage and wireless printers and notebooks.

About the CMO Council
The Chief Marketing Officer (CMO) Council is the only global network of executives specifically dedicated to high-level knowledge exchange, thought leadership and personal relationship building among senior corporate marketing leaders and brand decision-makers across a wide range of global industries. The CMO Council's 6,500+ members control more than $350 billion in aggregated annual marketing expenditures and run complex, distributed marketing and sales operations worldwide. In total, the CMO Council and its strategic interest communities include more than 35,000 global executives in more than 110 countries covering multiple industries, segments and markets. Regional chapters and advisory boards are active in the Americas, Europe, Asia-Pacific, Middle East, India and Africa. The council's strategic interest groups include the Coalition to Leverage and Optimize Sales Effectiveness (CLOSE), Mobile Relationship Marketing (MRM) Strategies, LoyaltyLeaders.org, CMOCIOAlign.org, Marketing Supply Chain Institute, Customer Experience Board, Digital Marketing Performance Institute, GeoBranding Center and the Forum to Advance the Mobile Experience (FAME). More information on the CMO Council is available at www.cmocouncil.org.

Media Contact:
Crystal Berry
CMO Council
Director of Marketing Programs and Communications
+1.650.433.4149
Email Contact

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