news release

BIG DATA, CHURN, CUSTOMER EXPERIENCE AND FRAUD MAJOR CHALLENGES FOR THE TELECOMS SECTOR NOW

Nottingham, UK, 02 October 2013 - An international survey of leading executives in the Telecoms sector conducted by Experian, the global information services company, has revealed that ‘big data monetisation’ is the fastest growing challenge facing the sector.  Churn, customer experience and reducing fraud are also amongst the key issues and challenges facing Telecoms companies in the lead up to 2014.

The survey was conducted amongst 80 senior executives in 45 telecommunications companies covering 22 countries. Executives were asked to provide insight into the most pressing issues. A similar survey was conducted last year and the results have been compared to identify leading trends in the major issues affecting telecommunication companies over time. 

The main findings from the survey include:

• The number of respondents citing big data monetisation as a major challenge for telecoms operators has increased by 150% compared to 2012, making it the biggest riser compared to other challenges
• 37% of respondents said end-to-end customer relationship management is their most significant business challenge. This is compared with to 2012 when also 37% of respondents agreed suggesting that this challenging issue remains a tough one to solve. 
• 32% of respondents said that reducing churn was the most critical factor in improving margins (this compares with 26% in 2012).
• Selling additional services to existing customers is also identified as important (29% vs 19% in 2012).
• Winning profitable customers (24% now compared with 21% in 2012) is also a priority highlighting the trend away from a pure revenue (ARPU) view of the world to incorporate Average Margin per user (AMPR) and Customer Lifetime Value (CLV). 
• Almost two fifths (37% in 2013 compared with 30% in 2012) said improving the quality of decision making throughout the customer lifecycle will provide the greatest benefit to their organisation, along with using external data to enhance their understanding of customer’ value relative to their potential risk.
• 10% of respondents felt combatting fraud posed a growing challenge in the run up to 2014.
• 7% of respondents said automating a greater proportion of customer decisions and interactions continued to be of importance.

Antonio Valasquez, Corporate Risk Director at Telefonica, commented: “We agree with the findings of the survey.  Our experience tells us that concerns around reducing churn, improving customer experience and developing cross-sell opportunities are very closely interrelated. The pressures of market saturation combined with the drive to reach new customers and improve profitability, means telcos are having to rethink substantial elements of their strategies. This demands not only self-criticism, courage and effort, but also new and better customer information, analysis and insights.”

Tim Barber, Strategic Development Director, Experian Decision Analytics, added: “It is no surprise that Customer Experience, Big Data and Fraud have been identified as serious challenges for telecommunications companies. The telecoms industry has access to vast amounts of data, and is rapidly understanding how this data can be mined to improve business performance in these critical areas.

“The findings also complement recent research by Experian into the ‘Always-On- Consumer’ and the significant part that mobile connectivity is playing in the lives of consumers. Young, urban and tech savvy consumers are increasingly seeing mobile as their primary medium for engagement with organisations and brands. This research provides consumer insight into the growing demand for more attractive and interactive mobile services such as touch-and-go payment, snapchat SMS messaging and the need for service providers to capitalise on this demand to drive their growth.”

ENDS…

Experian in the Telcos Sector

Experian has worked with telecommunications providers since the early 1990s, when it started providing consumer information services and hosted application processing systems to the new generation of mobile operators. It has since grown its footprint significantly, and currently helps well over 100 international telecommunications operators to find, acquire and manage customer relationships. Experian works with telecommunications in a number of different areas including application processing, customer insight, acquisition & retention, credit risk, decision analytics, debt management, fraud prevention and identity solutions.

Key emerging areas where Experian is assisting Telecoms companies with these challenges include:

• Risk ID for card not present transactions especially for pre-paid.
• Support for existing clients to provide best practice decisioning for their MVNO clients.
• Home move identity – sharing data to track home movers. This is particularly important for landline providers
• Device reputation for online application management and authentication, use of mobile device recognition data in fraud prevention, prevention of fronting/ ghost broking
• The national fraud prevention scheme, where Experian will be assisting telcos with the detection and prevention of application fraud.
• Mobile metrics via Hitwise in providing insight into the consumer mobile audience.

About Experian

Experian is the leading global information services company, providing data and analytical tools to clients around the world. The Group helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score, and protect against identity theft.

Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended 31 March 2013 was US$4.7 billion. Experian employs approximately 17,000 people in 40 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and São Paulo, Brazil.