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Friday, January 11, 2013

Telcos - how about adding intelligence to pipes?

Having worked in telcom domain for 12 years, I cant help noticing stark difference between the telco world and the internet world. Now that I am trying my hands on internet “stuff” for nearly 1 year, the difference is more apparent than before.

Much like the telcos, internet companies have gathered users, built a brand and store user data (think of Google, Facebook, Pinterest and likes as internet companies). Data is the core treasure and then in priority comes their brand; which can be obtained by e.g. through advertisements. Intuition should be telling them “hold on to data and don’t expose it anybody else”. On contrary… over time, they realized that opening up data to the world makes them an attractive proposition for a community of developers and their users. People will figure out innovative ways to profitably build applications in diverse domains. Think of Zynga and host of others who have built a business using social data exposed by Facebook (which Facebook by itself could not have done without defocusing from their main business). As a platform provider of data, Facebook only needs to create a business model to monetize exposed data. Data privacy regulations have to be respected and they have found ways to take permission from user. E.g. my private data is not compromised when Farmville uses my friends list since I authenticated Zynga using my Facebook credentials. Facebook and Zynga are examples of zillion others to illustrate power of open data architecture.

Imagine if telcos in India opened up their data. Privacy of data comes to the fore first… assume telcos have smartly handled it by taking permission from users E.g. via SMS for opt-in kind of services. India has nearly 600 million mobile subscribers and nearly 60 million facebook users. Who is more likely to have more data about your social graph? your telco or facebook. Remember telco knows who you call (close ones), who your friends call, how frequently, at what time of day, from which location, who do you SMS, how many times, with what text content and other way data about who called you etc. This is accurate way to understand who is important to you. In addition, by analysing data traffic moving in and out of network nodes, telcos already know which web pages you visited, what did you click, which e-commerce site you browsed, which product you intended to buy etc. If you think carefully, this is nearly as much data what facebook and Google put together have about you. Imagine if your telco were to start a mobile ad network. Since they knows which pages you browsed, which products you expressed interest to buy online and content of your SMS messages, what pages your friends browsed (wow), it could provide far more contextual advertisement than Google can provide. Although some of it appears to violating user privacy, a deeper thought can create value by staying within regulatory boundaries of user privacy. You could argue this is not core business of the telco. Well this is exactly where the telco will benefit by opening data to others who can create a business around it and make money. By unlocking the power of hidden data, telcos can create additional revenue streams. Apps will provide telcos a value differentiator from their competitors. E.g. you might stick to Vodafone and not switch to Airtel since you already use an app which inturn uses network data+your data. Telcos are currently collecting user’s government approved verification documents as proof of identity. Imagine if they exposed this data to third parties with a view to verify individuals, online hiring and online small credit agencies would use it as preliminary verification method. What’s currently done to satisfy regulation can be used to perhaps create new revenue stream. These are only examples to think in one direction. If telcos were to flex thinking muscles, they can uncover lot more useful cases. All this by providing secure APIs to developers and inviting them to hackathons to innovate. Instead telcos are happy protecting data assets (just like spectrum asset) in an oligarchy ending up providing a conduit pipe which provides commodity voice minutes and data bytes. Clearly, telcos have missed the bus. CIOs from internet domain can make this difference. Biggies have tried their hand but efforts are not enough. Airtel’s app store is not yet a runaway success. Vodafone had an initiative towards open data architecture but effort has weaned away without visible results.

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