Data Game-Changer: How Telcos Will Make More Money, Cost Less To You, and Solve World Problems

February 27, 2014 Stacey Schneider

Telco ProfitImagine a world where Telcos can make more money, cost less to the individual consumer, AND solve problems that plague the world’s largest cities like traffic congestion, crowd management and medical response times.

You won’t have to think too long, because Vodafone Spain showed the path to this world is much closer than we think at Mobile World Congress this week in Barcelona. In an advancement thought to be 12 months ahead of the rest of the industry, they showed a revolutionary new demo using big, fast data to create new services for the communities they serve. The idea is to use their massive potential for data to provide intelligent maps of people carrying phones, of objects like books or medical equipment, and even of vehicles from trains to ambulances. These maps can then be used to predict future problems like traffic jams and actively reroute traffic, or provide emergency medical services with best route options to get to patients and then get them to the hospital.

Each of these types of solutions can be tailored for specific organizations and government agencies, harvesting their vast consumer data and providing bespoked data streams of relevant data to applications that can use that data real-time to provide guidance and automate responses.

Big data solutions and services are the big green field opportunities for many industries traditionally thought to be outside of IT. Acting as the Olympic torch-bearer for all, General Electric has popularized how harnessing big data’s potential can boost GDP by $10-15 trillion with just 14 applications by 2020. With most of their solutions are targeting the true industrial sectors of power, aviation and rail, Vodafone is now taking that torch and shining its light on the Telco industry and its potential for their consumers—and anyone else with a mobile phone, including you and me.

Hindered by privacy concerns for subscribers, fear of hugely expensive special purpose hardware expenses, and complicated system integration that lead to long timeframes for realizing ROI, Telcos by and large have been timid to try and tackle the opportunities of big data. The risk and cost to the bottom line has just been too great for them to solve it yet.

However, this week, Vodafone Spain showed a working pilot that clearly demonstrates how private user data can be sanitized and how the resulting data can be used for the greater good, for both their ledgers and each of our wallets. Naturally, big data solutions that pave the way for telco providers to provide marketing services to their subscribers that help reduce customer churn and target advertising to subscribers. It also opens them up to create wholly new services the telcos can sell to cities to help tackle some of the trickiest problems associated with urban sprawl and big money making events like concerts, festivals, and sporting events. These new services offer potential for massive new revenue streams that could help to justify a reduction of our out of pocket costs for phone service, and improve profitability.

(Editors note: I personally have no actual insight to their long range pricing plans, but similar to how Google’s advertising platform pays enough to make consumer services like search and mail free or cheap for individual users, I expect the same model to apply eventually.)

The buzz for the demo rippled through the halls of Mobile World Congress. At least 8 other major mobile providers set up detailed demos, and Pivotal CEO Paul Maritz personally walked EMC CEO Joe Tucci to check out the level of innovation. What they walked away with was not just how cool the services were, but how easy, cheap and fast it was in actuality to do.

The whole thing was built in just about 3 weeks, shattering any preconception that these types of solutions pose significant risk to embark upon. Vodafone Spain heard about Pivotal’s RTI 4 T (RTI) solution becoming available and asked if they could do a demo for MWC showing people movement patterns in and around Barcelona, with the idea of marketing these types of services to local governments and first responders. They took a clone of the basic RTI platform, plumbed it into the Vodafone Spain network, and wrote a new app written on top of it.

They also completed this pilot without buying expensive special purpose hardware, enduring complicated system integration, or with the risk of long term investment plans before ROI could be achieved. It was simply just another app on top of a general purpose platform, useful in just 3 short weeks–lightning speed for any telco. It used general purpose commodity hardware that is capable of very high scale, because underneath it is weaved together by data and app fabrics tailored for dynamic cloud applications specifically for the telecommunications industry (RTI) and powered by an underlying abstraction layer (Pivotal CF) that makes standing up, scaling and expanding applications easy.

This is nothing short of a game-changer for a $4.7 trillion global industry that is realizing that they have to make a fundamental shift to survive. Plain and simple, they are spending way too much on CapEx and software solutions, and still can not address the elementary issues to their business–those of customer satisfaction and new revenue sources.

Several CEOs and CTOs of major mobile operators shared that they all knew that somehow they need to get on to a new platform, but were unsure where to start and were frustrated that they could not move their organizations faster to adopt this kind of technology. Thankfully, Vodafone took that torch from GE and shined the light on the path forward. Hopefully we will all feel its benefits soon!

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