LTE roll-outs are taking place in America and Europe. Over-the-top-players are likely to start offering large-scale and free HD mobile VoIP over the next 6-18 months. Steeply declining ARPU will be the result. The telecom industry needs new revenue: telecom revenue 2.0. How can they do it?

1. Become a Telecom Venture Capitalist

Buying the number 2 o 3 player in a new market or creating a copy-cat solution has not worked. Think about Terra/Lycos/Vivendi portals, Keteque, etc. So the better option is to make sure innovative startups get partly funded by telecom operators. This assures that operators will be able to launch innovative solutions in the future. Just being a VC will not be enough. Also investment in quickly launching the new startup services and incorporating them into the existing product catalog are necessary.

2. SaaSification & Monetization

SaaS monetization is not reselling SaaS and keeping a 30-50% revenue share. SaaS monetization means offering others the development/hosting tools, sales channels, support facilities, etc. to quickly launch new SaaS solutions that are targeted at new niche or long tail segments. SaaSification means that existing license-based on-site applications can be quickly converted into subscription-based SaaS offerings. The operator is a SaaS enabler and brings together SaaS creators with SaaS customers.

3. Enterprise Mobilization, BPaaS and BYOD

There are millions of small, medium and large enterprises that have employees which bring smartphones and tablets to work [a.k.a. BYOD - bring-your-own-device]. Managing these solutions (security, provisioning, etc.) as well as mobilizing applications and internal processes [a.k.a. BPaaS - business processes as a service] will be a big opportunity. Corporate mobile app and mobile SaaS stores will be an important starting point. Solutions to quickly mobilize existing solutions, ideally without programming should come next.

4. M2M Monetization Solutions

At the moment M2M is not having big industry standards yet. Operators are ideally positioned to bring standards to quickly connect millions of devices and sensors to value added services. Most of these solutions will not be SIM-based so a pure-SIM strategy is likely to fail. Operators should think about enabling others to take advantage of the M2M revolution instead of building services themselves. Be the restaurant, tool shop and clothing store and not the gold digger during a gold rush.

5. Big Data and Data Intelligence as a Service

Operators are used to manage peta-bytes of data. However converting this data into information and knowledge is the next step towards monetizing data. At the moment big data solutions focus on storing, manipulating and reporting large volume of data. However the Big Data revolution is only just starting. We need big data apps, big data app stores, “big datafication” tools, etc.

6. All-you-can-eat HD Video-on-Demand

Global content distribution can be better done with the help of operators then without. Exporting Netflix-like business models to Europe, Asia, Africa, Latin-America, etc. is urgently necessary if Hollywood wants to avoid the next generation believing “content = free”. All-you-can-eat movies, series and music for €15/month is what should be aimed for.

7. NFC, micro-subscriptions, nano-payments, anonymous digital cash, etc.

Payment solutions are hot. Look at Paypal, Square, Dwolla, etc. Operators could play it nice and ask Visa, Mastercard, etc. how they can assist. However going a more disruptive route and helping Square and Dwolla serve a global marketplace are probably more lucrative. Except for NFC solutions also micro-subscriptions (e.g. €0.05/month) or nano-payments (e.g. €0.001/transaction) should be looked at.

Don’t forget that people will still want to buy things in a digital world which they do not want others to know about or from people or companies they do not trust. Anonymous digital cash solutions are needed when physical cash is no longer available. Unless of course you expect people to buy books about getting a divorce with the family’s credit card…

8. Build your own VAS for consumers and enterprises – iVAS.

Conference calls, PBX, etc. were the most advanced communication solutions offered by operators until recently. However creating visual drag-and-drop environments in which non-technical users can combine telecom and web assets to create new value-added-services can result in a new generation of VAS: iVAS. The VAS in which personal solutions are resolved by the people who suffer them. Especially in emerging countries where wide-spread smartphones and LTE are still some years off, iVAS can still have some good 3-5 years ahead. Examples would be personalized numbering schemas for my family & friends, distorting voices when I call somebody, etc. Let consumers and small enterprises be the creators by offering them visual  do-it-yourself tools. Combine solutions like Invox, OpenVBX, Google’s App Inventor, etc.

9. Software-defined networking solutions & Network as a Service

Networks are changing from hardware to software. This means network virtualization, outsourcing of network solutions (e.g. virtualized firewalls), etc. Operators are in a good position to offer a new generation of complex network solutions that can be very easily managed via a browser. Enterprises could substitute expensive on-site hardware for cheap monthly subscriptions of virtualized network solutions.

10. Long-Tail Solutions

Operators could be offering a large catalog of long-tail solutions that are targeted at specific industries or problem domains. Thousands of companies are building multi-device solutions. Mobile &  SmartTV virtualization and automated testing solutions would be of interest to them. Low-latency solutions could be of interest to the financial sector, e.g. automated trading. Call center and customer support services on-demand and via a subscription model. Many possible services in the collective intelligence, crowd-sourcing, gamification, computer vision, natural language processing, etc. domains.

Basically operators should create new departments that are financially and structurally independent from the main business and that look at new disruptive technologies/business ideas and how either directly or via partners new revenue can be generated with them.

What not to do?

Waste any more time. Do not focus on small or late-to-market solutions, e.g. reselling Microsoft 365, RCS like Joyn, etc. Focus on industry-changers, disruptive innovations, etc.

Yes LTE roll-out is important but without any solutions for telecom revenue 2.0, LTE will just kill ARPU. So action is required now. Action needs to be quick [forget about RFQs], agile [forget about standards - the iPhone / AppStore is a proprietary solution], well subsidized [no supplier will invest big R&D budgets to get a 15% revenue share] and independent [of red tape and corporate control so risk taking is rewarded, unless of course you predicted 5 years ago that Facebook and Angry Bird would be changing industries]…

MWC is supposed to show off the best innovations in the telecom industry. The telecom industry is desperately in need of a new business model to substitute falling revenues and pay for exploding data costs.

There were a lot of LTE innovations that were announced. However these will only generate new revenues for the solution providers and not for the telecom industry as a whole.

M2M was another major innovation area. However there was no announcement of any standardization whereby several large operators would push a common standard. Without this standard it will be hard for large scale M2M projects to deliver large profits. If the telecom industry wants to be seen as the leader in the M2M then they should take a leading role in its standardization.

Augmented reality is also pushing strong. However most players are over-the-top companies and not telecom solution providers or telecom operators.

Lots of new phones and tablets but this will also not generate new telecom revenues but will probably push operators into bit pipes sooner.

Cloud computing, big data, collective intelligence, gamification, etc. were under-represented. A lot of slides but few real mind-blowing products.

Operators are probably the once to blame most for this. There is no clear signal from them that they will be investing in revenue generating solutions in 2012-2013. The only thing you can hope for is revenue sharing. Why if you invest in making a stellar product would you want to go to endless RFPs and complex integration solutions if you could launch the product by yourself and become a successful over-the-top-player?

Cable operators and telecom IPTV providers are delivering a hundred or more channels to each subscriber. However teens are no longer enticed by TV broadcast and like the Youtube model more. Even a video-on-demand service would not fully cater to their needs because they are interested in the top 5 minutes of a show or gossip program, not the other 40.

In the Twitter-world we got accustomed to URL shorteners like: TinyURL, Bit.ly, Is.gd, etc.  They take a long URL and make it short so it fits. What if a cable or IPTV provider would allow such URL shortening to be made for television programs?

TV Links

In search of a better word, let´s call them TV links. A TV link would be a short URL to a part of a television program that the viewer found interesting. By adding semantics to the part that is being linked, the viewer can provide information about what the TV link is about and why it caught his attention. Also automatically the program title and channel can be added from the public EPG.

Why would you need TV links?

A crowd of viewers that is watching all the hundreds of channels is filtering what is of interest to them and makes TV links to them. They can use the TV links to forward them to their friends on social networks. However by aggregating different TV links you can make social EPGs (electronic program guides). A social EPG is a collection of TV links that a group of viewers find interesting and often has a common theme or interest. Viewers that are under time pressure or from the Youtube generation can then easily pick the social EPG that most interests them and get all the content that peers with similar interests have preselected.  Collective intelligence can be used to find those social EPGs that are more similar to your tastes.

The Social EPG technology

You would need to have a TV or set top box that allows applications to be executed while you watch television. Most Android systems can do this already. Via the TV link app, you would be able to indicate which part of a program you want to create a link for and how you want to tag it. Via the social EPG app you would be able to search for TV links and combine them into a social EPG. The SocialCast app allows you to find and watch social EPGs.

Cloud DVR (digital video recorders) would be needed to be able to rewind and play what was broadcasted in the past. These could either be provided by the cable or IPTV provider but could alternatively also be provided by the TV channel. At the moment TV is wasting a lot of content because each program is being aired and afterwards it disappears in the archives. By having social EPG and TV links this content could be repeated over and over again. Content from years back would all of a sudden get a totally new dimension because the cute little boy that was singing a song has grown into a major star. Fans would collect these TV links into their social fan EPG and post them on their Facebook Walls.

The business model

Having viewers aggregating content so special interest groups can take a look at it, is the ideal marketing vehicle for targeted publicity. The Social EPG for a music star will have publicity around the latest concerts and music downloads. A CSI Fans Social EPG will get you all the CSI merchandise via a single click. Car programs get car publicity.

Hollywood

I am pretty sure that some Hollywood executive would have some objective towards replaying content that was broadcasted before. So a revenue share for the content generators and producers should be part of the eco-system.

Google is preparing to launch Google TV together with Sony, Logitech and Intel. Details about how the service will work and what will be in the Set-Top Box or Sony TVs are not very clear yet. However Google has been one of the few companies that is really driving the long-tail content and advertisement market. When Google TV is discussed then people are always talking about which content will be offered for what price…

What if content was free?

Or at least there would be a cheap all-you-can-eat price? Impossible? Why? Youtube is able to show personalized advertisement per viewer based on what you watched previously, how old you are, where you are, etc. So if a movie can be paid for by broadcast advertisement then it can probably also be paid for by personalized advertisement. Additionally knowing your content preferences allows for other up-sells, e.g. merchandising.

How much is Google going to pay for movies?

Perhaps nothing. Why can’t they do revenue sharing with content providers? This would allow for a long-tail content delivery market that is currently unheard of. Content providers would get a share of the advertisement revenue. Block busters would generate a lot of money whereas home bloopers or specialized documentaries would not. According to the Long-Tail theories however 98% of all content would be viewed at least ones a month. So Google might be able to make more money with the old-time classics, funniest amateur clips, etc. then with the Hollywood blockbusters.

The big losers?

Some startups that wanted to enter this space will probably die. Content generators would make the same money. Some studios might have to do with less. However telecom operators would have a large load on their network without any guarantees they get any extra cent…

Google has changed very little to its basic architecture building blocks over the years. Everything runs on top of the Google File System and Bigtable. Except for Google Instant which is reversing Map-Reduce usage, new services have been reusing their existing architecture.

Similar observations can be made for the rest of the main players. So why is it that Telecom operators have not invested in one architecture to launch multiple services? No idea.

One architecture for VAS

The concept is simple. Create one common architecture. This architecture should have multiple components:

• A high-available real-time data store – stores all application and user data
• A right-time data analytics service – allows collective intelligence and data mining
• An asset exposure layer – applications can re-use network assets and get isolated from internal complexities
• Presentation layer – facilitate mobile GUI and Web 2.0 development
• Application Engine – allows applications to run and focus on business logic instead of scaling and integration
• Continuous Deployment – instead of monthly big-bang deployments, incremental daily or weekly releases are possible, even hourly like some dotcoms.
• Unified Administration – one place to know what is happening both technically and business-wise with the applications.
• Long-Tail Business Link – all business and accounting transactions for customers, partners, providers, etc. are centralized.
• etc.

Having such an architecture in place would allow telco innovations to be brought to market at least ten times faster. Application and service designers would have to focus on business logic and not on the rest. Administrators would have one platform to manage and not a puzzle of systems. Integrations would have to be done ones to a common integration layer.

Building such an architecture should be done in the dotcom style and not a telco RFQ. Only by doing iterative projects which bring together the components can you build an architecture that is really used and not a side project that starts to have its own life.

It even makes sense to open source the architecture. Telco’s business is not about building architectures hence having a common platform that was started by one would benefit the whole industry. It even would give a competitive advantage to the one that started the architecture for knowing it better than any competitor. Of course for this to happen, a telco has to recognize that their future major competitors are not the neighboring telco but a global dotcom…

Any operator that has not started a project on Cloud Computing is late. The typical data center at an operator is filled with servers that are under utilized e.g. application servers and database servers are running at 30% of memory, disk and CPU. Just by doing step one of getting to Cloud Computing: virtualization, operators are able to save substantially in the cost of hardware, electricity, maintenance, etc. Virtualization means decoupling software from hardware. This allows to run multiple operating systems on one server.

However this would only be focusing on the tip of the iceberg. Cloud Computing is so much more…

Private Clouds

Automatic Scaling

Let´s first focus on the internal systems of an operator. After solutions have been virtualized, then you are able to scale them to more or less servers. The first step is to automate this process. If you have an application server cluster, do you need 8 nodes all the time? You probably only need them the week before Christmas or during some other peak period. So the ideal is to be able to measure the load and to automate the deployment of more or less cluster nodes based on load. The same can be done with the database. During the night you have 2 nodes. In the morning 3. During the day 4. During peak moments 8. In the evening 3 again. You could save massive amounts of money if application servers and databases can be scaled in this way. You ideally also are able to pay licenses based on what you really use and not on your maximum number of nodes during a yearly peak.

Redesigning Applications and Data

Both Amazon and Google found out that if they redesign their applications then they can get even more gains than pure virtualization. Amazon´s S3 service is a clear example. However internally they started with services like Dynamo on which S3 is build. The first step is to build general data stores. Multiple applications should be using a common data store instead of needing a separate database cluster each.

Unlike popular believe in the IT world, the dotcoms are not filling their data centers with Oracle RAC clusters. The dotcoms are designing special purpose data stores. The data volumes any market-leading dotcom has to deal with are so massive that a SQL database can not keep up. SQL databases are very good at running efficient queries on structural data or making sure transactions are consistent. However they fail when data is unstructured, write operations are massive or data volumes grow with terabytes every data.

Relational Data

So for all low-volume applications that need transactional data and read more than they write, you could still use a unified Oracle RAC cluster to serve multiple applications. An alternative approach are the data stores that have been build by Amazon (Relational Database Service or SimpleDB) or Google´s App Engine (Datastore with JDO).

What other alternatives are there?

Read Mostly Data

Data that needs to be read a lot and is not updated frequently can get an enormous performance and scalability boost by using an in-memory data store. The dotcom standard is memcached. Facebook (800 servers and 28TB) and Twitter are addicted to memcached.

Documents, Images & Videos

Binary and media files are best stored outside of a database. In small numbers they are often stored on a file system. However they occupy a lot of disk as well as network bandwidth when moved around. The ideal is a document store with a content-delivery network or CDN as a front-end. Amazon´s S3 and CloudFront are examples. Storing them in a compressed format, e.g. LZO can save valuable space. Also transcoding into different formats, e.g. thumbnails or preview can help save network bandwidth.

Unstructed Realtime Data

Data that is unstructured and needs to be stored and accessed in real-time in high volumes are best stored in special purpose data stores. You can write a book about the latest NoSQL solutions. Write an email to maarten at telruptive dot com if you are interested.

Analytics Data

Twitter has described most extensively how they use all the unstructured data they get from their logs and other sources. They use technology from Facebook to stream it into a high-available file-system from Yahoo. There they run massive parallel map-reduce operations to get to know a lot more about what users are doing and who is influencing who, etc.

Social Graph

The social graph is about who knows who and what kind of relationship you have. This data is best stored in graph data stores.

Collective Intelligence

Again a chapter by itself but dotcoms are also heavy users of collective intelligence which often means dedicate systems.

Accessing Data

Instead of stove pipes with data, the dotcoms are making data accessible to all their applications. Either via search interfaces, web technology to access data (e.g. REST and JSON) or efficient binary interfaces (Thrift and Protocol Buffers).

Messaging and Notification

Amazon is having a simple queue service and a simple notification service to make sure applications communicate in a uniform matter.

Applications

If applications have access to all the above services then the architecture of an application is simplified enormously. Most of the famous dotcoms don´t use middleware. They prefer the SOA principle. However unlike the IT SOA solutions, a dotcom would take an application and make it into a chain of reusable services. Let´s take an IVR application as an example. There would be a service to do voice recognition. Another one for voice transcription. Another one for text-to-speech. A transcoding service to transcode between different media formats (e.g. high-quality voice and low-phone-quality voice). And so on. Each service has independent load-balancing and can be scaled separately. Services can be re-used between applications. An application is very short because it just need to define which services need to work together and how.

Application Deployment

The dotcoms deploy new features on a daily and even hourly basis. This means that all application deployment is fully automated. When a new feature is deployed it does not necessarily overwrite an existing feature. It is possible that a new functionality has been solved in 5 different approaches. Dotcoms would split the total user base and let small parts of users try out the different approaches. Depending on the user´s feedback they would take the preferred approach and slowly scale up from 1% to 100%. If they detect that the feature has a performance problem or a bug then they would be able to roll-back or decrease the load, fix it and deploy gradually again.

The Network, OSS and BSS

There is a substantial effort needed to redesign a network to be cloud-aware. Some components need latencies lower than 10 milli-seconds (e.g. antennas), hence most of this logic will have to be processed locally. However all systems that can live with 100 milli-seconds latencies benefit from a cloud make-over.

Especially in the area of OSS and BSS there is room for optimizing applications and making them cloud-aware. Global services like a network inventory service, a user profile service, a device profile service, etc. would mean simpler applications and less data duplication.

Opening the Cloud

So the network and IT infrastructure is being redesigned to allow for faster innovation and lower costs. However Cloud Computing can also be used to increment revenues.

Being a Cloud Infrastructure Provider

Many IT consultancies and software/hardware vendors will tell an operator that they could be a Cloud infrastructure provider. On slides this really looks nice. However unless an operator is not using the cloud computing principles for their own systems as described in the first part, they are lacking substantial knowledge about how to manage such an infrastructure. Without this knowledge it would be hard to have a very optimized solution and as such be price competitive with the existing players.

Being a Cloud Platform Provider

Although closer to the operator´s core competencies, being a cloud platform provider would still be for those operators that are Cloud experts. A Cloud platform provider would allow others to use the infrastructure services to create applications on top. The complexity lies in the fact that malicious users try to break the platform which could have a very negative effect on the infrastructure if not handled correctly.

Being a Cloud Service Provider

This is the default option most operators should explore first before moving into the other areas. Being a service provider also has a roadmap:

Reselling SaaS

The easiest step is to be the storefront and to resell IT applications from others, e.g. cloud backup storage, security solutions, etc.

Offering Telco SaaS

The next step would be to offer specific telecom applications. Applications that are build for the operator or even better applications that can be build by others based on the operator´s assets. An example would be a PBX in the Cloud.

Open Market for SaaS

Building all telecom applications yourself is hard. Attracting others to do it for you is easier. However just putting a “Net App Store” and an SDK on the web will not get you to dominate the market. Only an open market with a large eco-system of companies and developers can generate large quantities of “Net Apps”. If you are thinking about building an open market, why don´t we talk first. Send an email to maarten at telruptive dot com.

Facebook is hot. Google is trying to create an equal successful social network. There are specialized social networks like Linkedin, Plaxo, etc. focusing on specific social networking aspects.

If you are not social, you are not Web 2.0!

Why are telecom operators not social?

Telefonica launched Keteke and bought Twenti so operators must be social. However launching or buying a social network does not make an operator social and web 2.0 ready!

Social networking is all about the social graph and what you do with it. Operators have had access to one of the best social graphs for years. However they have chosen to ignore it: the mobile social graph.

If I call you and you call me then we know one another. If the both of us call a third person then we have relationship to a person in common. It is true that the operator does not know what the relationship is between two persons that call one another. But that should not stop them from asking!

What can I do with a mobile social graph?

As soon as I provide an operator with the type of relationships I have with the people I call or send a message to, my mobile social graph will become useful both for me and the operator.

There is a whole list of applications that can be build on top of this mobile social graph. Let me give two examples.

A social addressbook

Just by telling which of the calls are business, family and friends, collective intelligence can do the rest. If I have two colleagues that marked a person as a colleague and I call that person then my addressbook can suggest to add this new phone as a colleague. There is a lot of more advanced features that could be added, but the basic idea is that a better addressbook generates more calls and SMS.

Find the influencer

This service is more advanced. The assumption is that if I call on Friday night a restaurant and during the next two weeks five of my friends call the same restaurant then I might have influenced my friends. Knowing who influences others is already used for churn analysis.

In our case the restaurant owner might be willing to pay a premium to contact me about a new promotion. Afterwards he or she can follow up if I or one of my friends made a call in the weeks after the promotion was send to me.

If you want to learn more about the mobile social graph don´t hesitate to contact the author at maarten at telruptive dot com.

Asset exposure is a hot topic in the telecom industry. Everybody is talking about opening up telecom assets for others to create new services. However I haven´t seen any successful asset exposure by the established operators yet. Why is this? Let´s look at the four major European players.

Vodafone calls network asset APIs,” enablers” and is offering mobile payment and location services. More is announced. Then again there is also betavine, oneapi and vodafone network apis. And we are not talking yet about widgets and mashups.

Telefonica has the movilforum, O2 litmus and the movistar developers platform.  A list of separate APIs is available with exotic names like “Manage Post Pay Bolt On’s API”.

“Orange developer” gets you in Google to all you need to develop. Unlike Vodafone and Telefonica.  A long list of APIs is available, including the personal profile api and the personal richprofile api.

“T-Mobile developer” also worked. Unfortunately there was no information for network assets API only mobile apps development.

There is one red line in this short test: “being a telecom developer is a hard job”.

Finding the sites with development information is hard. You would think that “operatorname +developer” should be enough to Google you there.

Understanding which API to take is even harder.  I don´t want to imagine writing an application with the APIs.

It is clear that European telecom operators would like to have an active developers community but they would need to understand some basic principles:

• out of sight, out of mind
• 80-20
• simplificationality
• eat your own dog food
• make one millionaire
• collective
• compete against the dots

Out of sight, out of mind

If I can´t find your API in the first 5 Google items when I look for developer and your company name, then I will probably never write an application for you. SEO, search engine optimization, is the first mandatory step when a developer portal is launched. Your portal can be the best in the world but if I can´t find it then I can´t use it.

80-20

80% and even 95% of all applications only need 10% to 20% of the functionality. The telecom industry has made a habit of “over-standardizing” APIs. A simple example: sending an SMS. What does an application developer wants to do in 95% of the cases? Send “text A” to “number B”. Only 5% of the applications need a receipt that you actually read the SMS. Even below 0,01% would like the operator logo, the internal port for message delivery in the device, etc. to be available. So the trick is to have a very basic high-level API and if required a more detailed low-level API.

Simplificationality

Why use “simplificationality” if you can use “simple”? Developers want to keep things simple. Programming is already hard enough. Standards bodies in the IT industry have designed the XML and SOAP standard to share unstructured data between as many systems as possible. Developers are neglecting both and are migrating to JSON and REST. A JSON document is a lot shorter and holds the same info. A REST API you can call from the command line. There is an interesting startup that has taken this simple principal and applied it correctly:

Eat your own dog food

A lot of startups are using the slogan: “eat your own dog food”. If you create something for others to use, then the first user should be you. Amazon created their web services stack for internal use and afterwards opened it up to the world. Until your services are not written with your API, then you should not open it up for others. After writing some services with your own API, you can be sure that it is fully functional, well documented and no longer has awkward glitches.

Make one millionaire

The economy is moved by the invisible hand which in human language means: “people are selfish”. I am prepared to suffer and write an application with your API as long as I have a change to become an overnight millionaire. Apple´s App Store has made for sure somebody a millionaire. As soon as there is one, there will be a million others trying. Make sure you share your revenue is based on the value contribution (Apple sells => 30%, developers invents and writes => 70%). If people feel they have an honest chance of becoming rich, then they will go the extra mile.

Collective

99.99% of all the apps that developers will write with your APIs will be rubbish.  However as long as users are able to easily find the other 0.01%, the operator will make money will all 100%. For users to be able to find a needle in a haystack, you need collective intelligence. People need to be able to benefit from viral marketing, recommendation engines, top 25, etc. in order for them not to have to waste their time. Early adopters will try out the bulk of the apps but they are only a minority. The rest of the mortals need to be helped. If I am looking for the coolest game, then it should be first in the list of games.  Apps needs to be automatically clustered, categorized, recommended, etc.

Compete against the dots

An operator´s competition for asset exposure is not your-next-door-operator but a dotcom that offers a way around your assets. For years operators sat on their location assets without exploiting them. Google came and wiped most of the value out with its Latitude, Maps and Goggles. Copy the dotcom technology and ways of doing things.

Every time I use Google or Amazon, they become a bit smarter. They know which type of information I search for, which products I like, which messages I write, etc. Afterwards they can find similar users and recommend me products and services I might like.

The usage of data warehouses is common in the telecom domain. However the collective intelligence that is held in them, hardly sees daylight. I will receive the odd call if my profile fits a potential churner. I might even get notified about a new tariff. But this is where it normally stops.

Why are telecom operators not replicating what made the Amazon´s and Google´s big: collective intelligence? You can easily cluster users, categorize their behavior, help them search what they need, recommend them services they might want, etc.

Let´s take an easy example: tariff plans.

They come in all colors and sizes, change frequently and have direct impact on my happiness.  So why don´t I get a recommendation like:

Similar users of our services:

• subscribed to the 500Mb data plan (73%)
• added the “call-for-free-in-the-weekend” option (65%)
• removed the 300 free SMS option (43%)

Even better would be:

Based on your last 3 months behavior and the behavior of users similar to you, you can save €21/month if you change your tariff plan from “expensive-tariff-A” to “cheap-tariff-B”.

Yes of course the operators would be loosing all the money they are overcharging. So in order to avoid lowering ARPU how can we use collective intelligence to increase sales or create new customized services?

“Congratulations with your new iPhone. Other users that purchased an iPhone also:

• subscribed to visual voicemail (54%)
• contracted a theft insurance (39%)

“We have noticed that you call these 5 persons most frequently. Two of them are not a user of our services.  You would save €5.43/month if they would join our services. Additionally for €3/month you would be able to call these 5 persons unlimited.”

All my examples are too complex to handle technology-wise? I don´t think they are more complex than what Google, Facebook and Amazon are doing. You just need to make sure you use their technology…