Evolution and Challenges of the Telecom Industry

SPEAKERS

Jessie Paul, Pradeep Shrivastava

Jessie Paul  00:06

Hello everyone and welcome to this edition of our podcast series where we’re covering what’s exciting and telco marketing, what are the best practices and what are the changes that senior marketers and business leaders are seeing in this space. And with us today, we’re really excited to have Pradeep Srivastava, who has over two decades of successful senior leadership experience turning around and rapidly growing businesses and establishing brands in a multi country and multicultural context. And he’s managed large format operations, including Telecom in Indonesia, India, Bangladesh, Nepal. He’s a member of the Board of Directors at XL Axiata , CCO at Robi Axiata & NCell Axiata and has held titles such as President Marketing at Jio, CMO at Idea Cellular. He started his career at  FMCG India including Hindustan Unilever SBU Head in Foods Division as well. And he definitely has a very strong work ethic and a number of innovative approaches that he’s used. And a can do attitude in building high performance teams to grow businesses in really competitive markets. So thanks so much for joining us today Pradeep and I’m looking forward to this conversation. 

Pradeep  01:29

Thank you for the invite Jessie!

Jessie Paul  01:32

Great so you know, when we were chatting before the show, you talked about how platform based businesses have changed customer expectations from business. So based on this learning, you know, what are some of the CVM initiatives that you consider impactful?

Pradeep  01:52

Jessie, I think we need to quickly look at the context. As far as telcos are concerned, over the last 20-30 years, we have successfully transformed societies, first with voice, which is now connecting people globally, anytime, anywhere. And now of course data is our new code. With combined with web with social media with smartphone ownership is taking everybody’s life to a digital life. But last decade, I must admit, has been very challenging for telcos, as consumers don’t want to pay for voice and investment in data madehas not been fully monetized. Now heavy traffic of OTT and the New Age digital services have taken consumer, from connectivity to productivity to commerce, and a lot more. So this is the state as far as the telco business is concerned. But if you look at it more dispassionately, we need to realize that it is not our journey as telco but consumers life’s journey.

Pradeep  03:02

You know, while most of the telco continue to operate as legacy player, consumer life and their experiences have changed dramatically, because of their experiences. In integrated platform businesses. You know, you can take example of Amazon for shopping, Uber for transport, or even companies like booking.com for travel, or even microloan on the spot or OTT experiences. As telco we have a lot of catching up to do on such experiences and go beyond what we have been offering our own services to become a truly platform based integrated service, you know, our slogan, to put it a bit openly ‘have telco product will sell’, or an attempt and an appeal to say ‘Please stay back with us for more bargains and more offers’. But now we have to really start looking at how we become more relevant for consumers and how can we help enrich and elevate their life? How can we help them influence their own social network? How can we ensure that we give customized services so more beyond pushing what we have to offering a wider partner ecosystem and let consumer choose what they wish to consume and for which they are willing to pay? So CVM the question you asked, it is much more going to be successful if it is outside in view, customers view their outlook. And if they are willing to pay you for that, if we can profitably identify certain consumer segment, then we will be able to win markets of the future. So beyond selling what we have, we need to offer what consumer segments need in a manner that integrated platform allows them and experiences that they’re getting from all other players. So this is something we must keep in mind. We can’t keep pedaling and pushing up our products.

Jessie Paul  05:09

So I hear what you’re saying. And I gather, what I’m actually taking out is that you’re saying that the sellers view of the customer lifecycle is not a sustainable approach, right? And that’s something that I think we’ve had for decades. So what would you suggest is going to replace this model? If I can’t look at it from a seller’s view? What’s the kind of view I should have?

Pradeep  05:34

You’re absolutely right, the seller’s view is absolutely not sustainable. And we have seen it, you have experienced it. So first, we have to change our own mindset, we need to understand that we don’t own the customer. I can’t say I have this customer. So I’ll push my product, your customer has their own busy live. It is she who gives us a chance by picking up our services. And she can make choices between fixed broadband or mobile broadband. And within that choose Brand A or Brand B. Sometimes you see consumer flirting with different options based on service experience, network quality price points. So first, we have to acknowledge that the consumer is giving us a chance the consumer is having the choice in every single virtually every single consumption occasions because they keep changing the access point that they have, depending on where they are. And we need to ask ourselves, how are we adding value to their life? I have experience in Indian subcontinent in Indonesia. And if I try to crystallize what we have offered, it’s about offering a price. It’s about offering a data quota offering a value add A plus some time, essentially giving more discounts for a quick fix. It’s basically to retain customer. We need to step aside and examine the context and the wider ecosystem and services on why consumers or a unique segment of consumer wish to use us and ask ourselves, How can we enhance consumer experience and their choices? It is their journeys, their life is not about our product, and peddling our product. 

Pradeep  07:27

Now, the ecosystem expected by youth, for example, is very different from a homemaker or from overseas foreign workers or for tourists or for SMEs. We can’t just be pedaling 10 GB of data. Oh, no, no, I’ll give you 50 GB of data, don’t worry, I’ll give you 100 GB of data. I mean, it’s not the data the consumer is consuming, they are having a certain life which needs to be enriched, and we need to step in in their life and become more relevant in their context. So for many segment, there are so many of them that we have to make some hard choices, we need to make decisions on which are the most profitable segment, most largest segment where we can build on our unique strength as a telco is a tough journey. But my experience is that at least in Indian subcontinent market, if we can build a relevant ecosystem for these consumer segment, it provides me an immediate opportunity unlocking, the consumer says okay, you are recognizing me and okay, maybe you have basic needs of mine. But you’re servicing me with those needs, I go with you. So essentially, we have to put ourselves in customer shoes, in terms of unique segments and create offers for them. I guess that’s what we have to do in terms of changing our own mindset.

Jessie Paul  08:57

Speaking of change of mindset, I think there’s a huge shift taking place in the telco industry. And you’ve actually worked in so many countries, India, Indonesia, Nepal, Bangladesh. I’m sorry, if I’ve left out something. I think it’s been a while since I’ve picked up my phone to actually make a voice phone call. And I think worldwide, that is a trend which we are seeing in terms of voice revenue declining. So is this something that you’re also seeing in the geographies that you’ve worked in? And How are telcos addressing this because this is a huge business model shift for you guys?

Pradeep  09:39

You’re absolutely right. See, a telco have innovated over decades to offer voice services. It’s been 20 to 30 years now. But we need to accept this change context you just talked about, you know, with very high smartphone penetration, very low cost of access to data have access to OTT services, consumers do not want to pay for voice services, when they can actually get it free, sometimes with enhanced video calling features with conferencing facilities, so why would they pay for it. So, this is a global phenomena, somewhere voice have become irrelevant. And somewhere it is in the process of becoming irrelevant as far as traditional telco paid voices are concerned. Now,our challenge is that even our new core data is not giving the profitability based on the kind of investment we are making. Even though the data consumption is exploding from single digit to high double digit in terms of GB of data per month. So we have to, we have no choice, but we have to go to a new code and transform. So, technically, we can retain our customer voice customer by bundling it with some telco data products, getting a fixed revenue for unlimited voice, or even bundling digital services. But at best these things are short term measures, we can’t sustain them over time, you need to acknowledge that this is a change of a magnitude which is going to be very difficult. And I dare say, a painful metamorphosis. We already have a very large network of consumers and let’s talk take stock of what we have. We have a very large network of consumer in hundreds of millions of customers. Now, can we simplify this network is easier said than done? But can we declutter it? Can we delay or it? Can we convert it over time through investments into intelligent platform businesses? 

Pradeep  11:53

Let’s take an example. Supposing this entire network of ours is blockchain enabled to get financial transactions done for our own ecosystem of customers? Or perhaps we can have some quick API’s for integration of OTT services. Because right now, it’s a long blown and complex process to integrate these popular services. Or we can examine, can we become the people who give consumer identity and we talked about mobile number is an identity. So can we give that can we give assurance compared to open Wi Fi networks of data security, data privacy, so there’s so much that telco networks can offer as long as we can create a powerful intelligent platform. 

Pradeep  12:43

Now, the moment we have that, then we have to also layer it with new skill sets, like data science, and help distant life exploit for customers. Just because we see some handful of things like a shopping here, or OTT there, it doesn’t mean that this is the beginning and end of all consumer segment. There are a very large number of localized segments, very, very niche services, hundreds and thousands of micro segments and applications. And all that and more can be commercially widely done. If we can convert our network into intelligent network, see, telcos have no choice left anymore. If we leave it unattended, we are going to become a passive network of infrastructure infrastructure. And we will not be able to even give a credible collaboration slash fight to the hyper scalars, who are actually writing on our own network to create the scale that they have created. So I know it’s not easy. I know that it’s going to take time, but we have to become more rather than less relevant in consumers life. It is a necessity, it is a difficult path to take but many, many services of future can come if we can convert our network is to more intelligent network rather than the current hybrid network. So there is a possibility, but it’s going to be a tough journey. And I think it would be incorrect for us to say give up or to be incorrect for us to say, Okay, let’s remain a dumb pipe. So we have to really ask ourselves, can we leverage that massive network of millions, hundreds of millions, some time customers that are there on our networks? I hope that answers your question.

Jessie Paul  14:34

And you mentioned that you don’t want to be a dumb pipe. And I totally get that. And I think the telco industry has been very good at reinventing itself because I was actually handling the marketing for RPG Cellular when it launched in 1996 in July, right. At that time, our biggest challenge was getting people to use the phone to make phone calls because I think it was 16.80 rupees 16.80 per minute, so nobody wanted to use the phone. So, you know, from there to now, when voices not being considered, it’s a very short time actually that this whole transformation has taken place. But you know, so I think this industry generally does understand transformational changes both for itself as well as for others. And what I wanted to ask you is, look, you don’t want to be the dumb pipe, you want to treat customers smartly. So I would imagine data is key to any differentiated marketing that you wanted to do. And you talked about it when you said that the youth are different tourists are different, everybody’s different. And yet, you’re going to have to figure out how to treat them differently, and also to identify them. So any perspectives on how marketers can use data and martec to actually offer and realize the potential of these customized offerings?

Pradeep  16:07

Yeah, I feel that telcos have depended a lot on a wide spectrum one shoe size fits all – a mass market approach. But that has irreversiblely given way to more sharply defined offers that are needed today, for very, very clearly articulated segments of consumers. Consumer is making choices today. It is making choices beyond picking up from telco brand to fixed mobile convergence, or I gave an example of voice shifting to OTT data virtually free and maybe with a elevated experience of video. So what when we look at this change to context, many telco may not get many telcos do not have a powerful analytics, culture, or capabilities, or be able to take real time action based on the insights that are really coming out in very large data set of consumption. Now, I’m quite conscious of the fact that when I make a statement like this, many people in telco industry will say, You know what, we have analytics capabilities, maybe you don’t have it. So let me just challenge them. Let me ask  to benchmark themselves against not their competitor, or against other countries of telco. But benchmark yourself against data science capabilities of say, Microsoft, or Google or Tiktok or even Meta. These are not irrelevant comparisons, because virtually half of our telco data traffic is consumed by these and other OTT players, they are using our network. And they have those capabilities. And hand on heart, we have to ask ourselves, do we have that culture? Do we have that investment? Do we have that capability?  Do we stay strong stand strong against these people? Or do we collaborate with them and work with them. So we need to really move forward in real time decision making go much more granular in terms of what the consumer wants, create more informed decisions, and do so in a cost-effective manner, because this micro-segment may be able to pay us more or sometimes less. And we need to keep pushing the boundaries of deeper data capabilities, where undoubtedly telcos have fallen behind compared to these hyper scalars. It’s a journey. But we have to push forward every single day to build our competence and take more informed decisions today. We are not there compared to the kind of benchmark companies I mentioned, who are using our network, we have a bit of distance to travel on that.

Jessie Paul  19:15

How would you say real-time data is fueling innovations in your industry? I mean, I know that others are doing it differently, and they have different data pipes for that matter. But if I look at the telco industry, you guys have a lot of data as well. So how are you using real-time data? And if you’re not or if you’re not reaching your full potential, what would you say are the barriers to that?

Pradeep  19:41

First, we need to accept that the consumer across digital categories are actually taking real time services, instant gratification, I gave example of OTT content, etc. And this platform was did business says these digital apps are making it possible for them. As if that’s not enough, show social media is fueling the instant everything you right now culture. Even very evolved bots are interfacing with consumers, identifying their needs and completing real time transaction. This is the context in which telcos are operating today, because this is the context of the consumer who is consuming these services. Now look at our markets, I’m more familiar with Asian markets, in telco Asian market, the majority of the transactions of customer recharging, for example, buying our packs, for example, are taking through are taking place through the traditional channel intermediaries, where a consumer makes a plan purchase, I go to an outlet. And I buy that, at a time when we had large number of not so digital savvy customers wanting to have assistant but assisted purchases, this was valid. But today things have changed. In other categories, the same consumer is using their smartphone to consume the service real time basis. Sure enough, there are some digital intermediaries who are also in the play now. But we have to ask ourselves just a question that analysis, data consumer profiling understanding of their consumption behavior comes only when we deal with a customer directly, not in terms of a delayed purchase at a retail counter, or in terms of going through the digital intermediaries reselling our product. So the question we need to ask ourselves is, even if it takes a long time, how can we move at a faster pace of reaching out to customer going direct to customer, this will help us offer and incentivize them services based on their own profile, their past consumption pattern, and offer more suitable product to build on that. And as I mentioned earlier, it is not about our product, it’s about the wider ecosystem we have to offer. Because nobody consumes data. They consume content, they consume conferences, they consume commerce. So we have to really become a part of or incorporate a larger partner ecosystem, so that that partner ecosystem can be understood. So in the short run, we have to go more direct and shorten means it may take several years, because even today, the dominant purchases are not on consumer app, just because you and I do it doesn’t mean the man on the street is doing it, they still go to the retail counter, they still buy it from there. So this has to change at a faster pace. But you know, real magic just is going to be unfolding. A real multiplier effect is going to come when we integrate telco consumption data and profile with other databases, and geographically go to micro micro grids to understand those patterns. You know, it could be the census data, it could be a social media consumption, it could be shopping behavior, or a credit card, purchase history, and integrate and pull in all this available accessible data to create a stronger profile of the customer. And once we do it, then we will be able to unleash and open much more highly customized solutions for the customer. And it’s not something easy, I know that in my previous experiences repeatedly, we have tried to integrate data. But these are early days. When we do it then the rich data we have on where is the consumer, what are they consuming, it can dramatically alter the way the large services of e-commerce is getting done today to services which are still going to unfold in the years ahead. So we need to really examine how this difficult journey can be taken by us to ensure that we have more powerful outcome in a manner that is most cost-effective, where telco services are a part of the overall seen and not the beginning and end of the journey for telco executives.

Jessie Paul  24:29

Yeah, that’s a huge and broad and very sweeping perspective. And I can see the potential right I mean, the telco knows that attended a concert and you know they could make it very relevant if they could also tap with e-commerce to target people who are going to a concert so I get that. So a lot of excitement in your space is what I would say. So I have a last question for you, you’ve got a very diverse broad and experience geographically as well as industry wise. So, what advice do you have for marketers and dealing with the changing rules or aspects of customer loyalty? What advice would you give them?

Pradeep  25:17

I have no advice to give, I can just share my own experiences and the kind of aspiration I have in terms of how we need to do business.With several choices in customer’s hand today, and they are rapidly changing context, as far as our core telco products are concerned, consumer is saying, give me more for less, they’re shouting, we can always try to ignore those voices, but customers saying just give me more data, charge me less give me free voice. So, the innovations which are taking at a breakneck speed, if we don’t cater to their requirements, in a reform that revised manner, someone else will come and offer consumers something better, something faster, and something cheaper or sometime somebody may give a highly differentiated niche experience to consumer. And they may be willing to even pay a premium for those services. So we need to first acknowledge that pushing more, and hoping that somebody will pay more for it, those days are over. Now, another fantastic development that is taking place in the years ahead, maybe a couple of years, maybe three, four years, is that 5G networks will get launched globally across markets. Beyond speed, which seems to be a common understanding, the known 5G use cases show that there is going to be sharply defined solution for consumers. And there are still many modes cases are going to develop as the ecosystem builds up. So ecosystem could come up to enhance consumer life could be it could be health, it could be education, it could be entertainment, you know, even three dimensional web is going to really change the way consumers are looking at things. Even Metaverse, maybe take longer time is going to really redefine the way consumer experience many things in their life or in their virtual lives. So the future is going to be very exciting, and it will happen at a pace faster than we expect. How do we get these future customer you know, we identify a customer look like a high potential customer, can we be servicing them better? Can we create an ecosystem for them, so that even in the 4G era, if you create an ecosystem version 1.0, then over a period of time these ecosystems are going to grow, I gave example of youth demand, etc, these ecosystems are going to grow, and they will start appreciating the offer we are making. And in a 5G era, it can be even more enhanced service. If we want loyalty only on voice and data, we need to recognize that it is a highly commoditized experience. And there is going to be very high cost to somehow create a loyalty for the consumer. And then a limit to which you can possibly do it, in terms of ensuring stickiness of the customer. So building ecosystem, building digital communities, which are seamless, in their potential upgrade to 5G era, this is what has to be triggered. Now we can’t be triggering it three years down the line. It has to be triggered today. So that we can take consumer from the current combination of experience in the ecosystem to perhaps a more elevated and more comprehensive experience over a period of time and create more compelling and sustainable advantage and become the go to brand or go to service provider and hopefully become ensured that they become temporarily loyal to us. So we have a long way to go. That as you rightly pointed out, Jesise that the industry has invented itself again and again. And obviously, there has been a downed phase for the industry with free voice and a huge amount of data. It needs to change. We need to move towards a large segment of consumers and start creating very, very well defined ecosystems for them. And 5g is going to transform them in a big way. This is the only appeal I have for people because obviously, as a telco professional, I’m very keen that this industry prospers and grows and really changes the way consumers live, play, work the way we had done it in the voice era and availability of data era. So I guess that’s all I have to say at this stage. Thank you.

Jessie Paul  30:02

Thank you so much. It’s been great speaking with you, Pradeep. You’ve covered a huge amount of ground and totally it’s been an amazing journey from voice to experience. And I think you’ve lived the change and are continuing to live with change. And I’m sure our listeners will pick up a lot of interesting insights from you. Thank you once again!

Pradeep  30:22

Thank you once again for this invite. Appreciate that!