Home > Collective Intelligence, Disrup. Technology > Why don´t you recommend me?

Why don´t you recommend me?

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…

  1. November 18, 2010 at 7:00 pm

    Hello Maarten

    This is not a new technical or business problem. Doesn’t the solution to the problem lie with the organization, culture and politics of the carriers ie. even if a solution presented itself they wouldn’t be able to do anything about it?

    • November 18, 2010 at 7:20 pm

      You are right that a lot of carriers don´t have the mentality to adopt dotcom ways of thinking, even if they have the right solution presented to them. However we should also not generalize. There are operators that do want to listen. That is the idea of this blog.

  2. November 18, 2010 at 7:59 pm

    Another point wrt carriers: with the rise of mobile internet devices developers will build horizontal apps which will marginalize carriers vertical (and valuable) subscriber data.

    • November 19, 2010 at 11:32 am

      Not only the subscriber data asset is going to loose value. Very likely more assets will loose value. That is why I think operators should try to monitize them now and not wait until the same happens as what happened to the location based assets [Now almost useless!]…

  3. November 19, 2010 at 2:46 pm

    It seems that the carriers are already loosing value wrt their data assets. It is also a question of trust and companies such as Apple and Google have more trust in the bank than carriers do.

    I also suspect that as the carriers are no longer driving the market forward then they no longer have a reliable compass to know what direction to take.

    • November 19, 2010 at 3:31 pm

      This loss of direction is exactly what is happening with most operators. They (start to) understand the threats of the Apple’s and Google’s towards their assets. However they are unsure how to respond. The problem is when a 100K employees company is used to work in one way, then you can not change that way of working in a few weeks. There is a very similar industry that is facing the same problems: Hollywood. Both industries are accustomed to sell products expensive and are not ready to lower their prices even if costs have fallen dramatically. This creates a big incentive for new entrants to try to steal away their lucrative business via new technology.

  4. November 19, 2010 at 4:50 pm

    It is interesting to see a greater interest and investment again in wide area wifi. Apple’s recent acquisition of company providing a writable sim card shows promise too. It seems the market had decided that the carriers had too much power (a bit like the cable operators in the US who are also facing dis-intermediation with AppleTV and GoogleTV).

    The carriers didn’t really understood the power that developers bring to a platform and always trying to get one over them would eventually lead to opening the door to other players.

  5. November 22, 2010 at 12:17 am
    • November 22, 2010 at 9:32 am

      Hi Dinesh,

      Very interesting link. I already had a list of ways some of the operator assets could be by-passed but I did not have this one. It is definitely interesting material for a blog entry: “How will telecom assets be attacked by innovative competitors?”. Do you have some more examples? Of course, I will give you the credit in the blog entry…

  6. November 22, 2010 at 10:30 am

    If I come across useful links then I’ll send them along. Apple breached the carrier strangehold and I expect the computer industry will attack from all directions.

    Until the iPhone, feature phones and smartphones (from Nokia, Palm, RIM, etc.) were “phones” but today smartphones are mobile internet devices. In fact, they are multi-sensor mobile computers.

    Carriers are not in the computer business and hence do not understand the value chain. The computer industry is not going to give the carriers the option of entering the computer industry. The sooner the carriers can be dis-intermediated the better for Silicon Valley and they can own the complete relationship with the user.

  7. November 22, 2010 at 11:50 pm

    The new article is very thorough and enjoyed reading it. A couple of observations:

    a. Maybe the carriers should only focus on their core business which is being a pipe provider.

    b. The cable TV industry could be a better comparative example especially in the US where they are despised as much as the carriers.

    • November 23, 2010 at 9:39 am

      The problem is that the company for which I work would be greatly impacted if all what operators would do is to be a bit pipe. They would not need any fancy systems.

      I also believe that although in general operators are conservative, there are innovative operators that are willing to fight the dotcom’s for the communication business in their terrain. It is those operators that I would invite to read this blog.

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