Why Does the Telecom Industry Need to Create New Revenue Streams?

The massive shift from cable television to wireless, data-driven services presents an opportunity that only comes once in a century—these industry changes don’t need to be viewed as challenges

However, avoiding these changes instead of embracing them could leave once-dominant organizations behind the curve.

Currently, telecoms have adapted to the Internet by adding mobile data to consumer-facing services that complement traditional phone packages—but this is only the start of a much larger shift.

Internet-based services aren’t just going to complement telecommunications services that have existed for decades; they’re going to replace them among younger generations. Television is moving toward Internet content providers, mobile data is moving to the automobile, and B2B companies want to monetize the very flow of information between everything.

Telecom providers can monetize all of that. They just need a smart billing solution that incorporates millions of connected devices, their components, and the flow of information between all of them. They can even accomplish this with legacy IT systems in place, but we’ll get to that shortly.

Entertainment and Media Will Be Streamed Everywhere

The largest telecom companies already own certain properties in the entertainment and media space, but they don’t always compete with industry leaders in the same space (like Netflix).

With enough capital on hand, these organizations can invest in native platforms to attract subscribers, even going so far as to produce original content to carve out a sizable market share for themselves.

This becomes an even better opportunity because telecoms are positioned to own or acquire the infrastructure upon which the entertainment vertical is built. This will create incredible cost-savings through owning more of the value chain than competitors—and the ability to monetize that infrastructure for competitors and collaborators to use.

Telecoms can monetize the content itself through consumers, deep analytics and usage data to third-party content producers, and the data plans used to move all of that data (and content). It can all be done through accurate usage billing, too.

Every Business Needs End-to-End Communication and Collaboration Services

The largest opportunities for telecom enterprises don’t just sit with the consumer market.  Every business needs internal and external communication solutions, no matter the size. It’s a clear revenue model for telecom companies to capture, but it’s also undergoing a change at this very moment.

Organizations use internal communication tools more than ever, even in small companies with four to ten employees. Just look at these examples:

• Slack
• Skype for Business
• Microsoft Teams
• Basecamp
• Campfire

Their most valuable trait is scalability: internal communication platforms are just as useful to small agencies as they are for enterprises, making it a natural extension for telecom companies offering packaged services or billing data by usage, even for an entire office.

Similarly, most organizations need external communication and collaboration tools, including:

• Webinar platforms
• Conference call solutions
• Video call software
• Live video capabilities

Companies need these for sales, client meetings, and marketing purposes—all built on phone lines and Internet connections that telecom companies already own.

Telecoms can bill for the connection itself by usage and then offer outcome-based discounts or value-added services in combination with such communication tools. This strategy could become a competitive tipping point for telecoms embracing usage billing and outcome-based billing revenue models.

eCommerce Will Evolve Alongside Mobile Technology

People have been paying with debit and credit cards for a very long time, but they are starting to pay with their phones (Samsung Pay or Apple Pay for example). Telecoms have the opportunity to corner the market on near-field communication (NFC) technology, which will play a central role in this shift. NFC technology doesn’t need to rely on mobile phones exclusively, either. It can be combined with tablets, connected cars, and even smart clothing.

This, in turn, will let telecoms monetize everyday transactions for millions of people buying coffee, fuel, lunch, groceries, and movie tickets. The best part is that this revenue stream can also operate on a usage billing model and in conjunction with bill-on-behalf services, making it a desirable vertical for both B2C and B2B revenue models.

The IoT Will Make B2B Sales Data Lucrative in Most Verticals

Original equipment manufacturers all want to know how their products perform, and they’re willing to pay to find out what usage data can tell them.

Telecoms can monetize B2B sales data for virtually any connected device using their mobile data plan, and they can even bill for it by usage. LogiSense, in particular, lets telecoms bill for the amount of usage data transmitted between components of devices, like the ones found in a smartphone or a connected car - in real-time.

This lets OEMs see how their products perform by the day, week, month, season, quarter, and year. In turn, they’ll understand exactly how often their products are used, where they are used, and to what capacity they are used.

That model is expected to generate $33 billion in industry revenue by 2025 just for the automotive industry. A single car can generate $100 worth of user data per day, which is an opportunity that telecoms simply cannot pass up.

Leaders in the telecommunications industry face challenges of scale, mitigating costs, and competitive pricing, yet the changes in the space are opportunities to solve them instead of complicating them.

By investing in the value chain for the Internet of Things and usage billing solutions, telecoms can diversify their revenue streams through entertainment, office communication, B2B sales data, and mobile eCommerce.

Download our case study on Driving Profitability in the Connected Economy to find your organization’s next strategic revenue stream.