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The Value of Smarter Communications

Harness the power of data and analytics to maximize the value of each customer

Ever-increasing data traffic and intrinsic challenges to revenue growth make it clear that the communications industry is about to change dramatically. How it actually evolves will be the result of a complex alchemy of Communications Service Provider (CSP) strategy, customer behavior, competitive forces, regulation and technological evolution.

According to the 2010 IBM CEO Study, CSP CEOs recognize the need to transform, equip their business to leverage data and address competitive threats:

76 percent identify industry transformation as the one factor that will have the largest impact on their organization over the next 5 years.  76% identify over-the-top(OTT)service providers-those who establish direct relationships with consumers instead of working through the CSP-as their greatest competitive threat. 71% identify the information explosion as the factor that will have the second largest impact on their organization over the next 5 years.

CSP leaders know that staying close to their customers is critical to success. Developing capabilities to do so is at the top of their priority list. That is why investment in analytics to harness information is so important.

Still, current challenges continue. Customer acquisition costs continue to rise—retention, churn and service all need to be controlled. In addition, the average revenue per user (ARPU) erosion has to be curtailed. These efforts depend on differentiating the customer experience and creating new revenue streams by tapping into rich customer data, applying analytics and working effectively with content providers.

The executive brief from the IBM Center for Applied Insights, Smarter communications through analytics, demonstrates to CSPs that investments in data integration and analytics will increase returns from their core businesses, drive new revenue and maximize the value of each customer by leverage information assets.

The executive brief outlines a set of capabilities that CSPs can develop to address these challenges, differentiate from competition, and accelerate and sustain growth. By first identifying capabilities that already exist to exploit the wealth of customer and network data, leaders can then plan for investments in processes, people and technology to take the business to the next level.

Smarter communications through analytics: A competency outcome map
Smarter communications is a journey of increasing sophistication over time. CSPs begin by gathering and integrating customer data in order to build rich, dynamic customer profiles. Subsequent steps leverage that foundation for intelligence, predictive analytics and process automation. While you can act on some of the steps out of sequence, optimal value is derived by fully implementing the foundational and analytic capabilities.


Using an illustrative organization, we demonstrate a model that quantifies the economic impact of smarter communications through analytics. For example, by developing the recommended capabilities, this CSP can target retention programs toward "customers at risk" and leverage data mining to align costs and revenue while achieving greater operational efficiency. Using our model, we can demonstrate the benefit to your company based on your own data.

The need for new business capabilities is clear. However, no single initiative can comprehensively address both current issues like ARPU and position the CSP to maximize customer value over the long term. A broad range of complementary and interrelated investments is called for. Leading communications providers are already achieving significant benefits by making investments that drive insight and make the business more responsive. Learn how, by enhancing your own competencies, you can deliver real, quantified economic and shareholder value, while driving towards operational excellence.

Making communications smarter

Executive Report


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