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How VAS Supports Digital Transformation In the Telecom Industry

Telecommunications Software Solutions

How VAS Supports Digital Transformation In the Telecom Industry

Progressive telecom companies offer VAS (Value Added Services) over and above their core products and services.

These services are just that: value add.

In this article, we’ll discuss VAS and how it supports digital transformation, but first, let’s provide some context:

Telecoms under pressure

According to a BDO study, increased competition is the top risk facing telecom executives.

Telecoms under pressure

With fierce competition, the rise of over-the-top communication apps such as SMS, VoIP, and WhatsApp, as well as connected TV and mobile apps, telcos can no longer differentiate themselves based solely on infrastructure and operations. 

This is because when the focus is only on infrastructure and operations, there is little else to separate them from competitors or give them competitive advantage.

Of course, social media apps, and in particular Google and Facebook, dominate the communications market. As a result, people no longer rely on telcos as much as they used to for interactions. 

Then there’s rapidly increasing bandwidth requirements for the advent of Internet of Things, 5G and other technologies which translates into the need for telcos to ensure near-continual upgrading of their infrastructures just to keep up, all the while that infrastructure becomes less and less critical to growth and profitability. 

Even so, telcos are not likely to survive for very much longer if they do not make solid steps for 5G network implementation in the very near future. 

Digitalization across industries depends on telecoms

Digitalization across industries are dependent on the telecom industry providing critical infrastructure, applications and productivity improvements.

In fact, over $10 trillion of value stemming from digitalization in five important industries depends on the telecom industry over the next decade:

Digitalization across industries depends on telecoms

Image Credit: World Economic Forum

Traditional telecom revenues are under pressure, and it’s becoming more and more important for operators to roll out new digitized business models to ensure that they share in the value of global transformation.

So, although the telecommunication industry plays an essential part in driving digitalization in other industries, it must unlock significant value through its own digital transformation.

Which is probably the reason telecoms has been slow to take up arms: digital transformation is hard, especially when companies are already under pressure from innovation and new technologies.

Telecom companies must unlock value through their own transformation first

It is critical for telecoms to undergo an internal digital transformation if they are to survive the fourth industrial revolution. 

Part of that process is to implement VAS for 1) increased profit from new revenue streams, and to 2) remodel the customer experience.

World Economic Forum’s research hit on four broad digital themes which they believe will have the greatest impact on telecom companies:

#1: Future networks

Virtualisation minus the physical hardware layer will change the foundation of differentiating factors.

#2: Beyond the network

As consumers face an increase of digital transformation in their lives and work, there will rise opportunities for telecoms to move beyond the network and connectivity, to embrace IoT solutions, human interfaces and VR.

#3: Remodelling customer engagement

To set themselves apart amidst fierce competition, infrastructure-only will not do much more, and telecoms will therefore need something more sustainable; they need to not just provide their customers with what they need, but deliver digital experiences that delight. This is especially important at this time as consumers have realigned their expectations based on other high-quality digital experiences from other industries which now need to be matched by companies in other sectors.

Think Amazon.

#4: Digital workforce for innovation

So far, the majority of telecommunication companies have been slow to embrace change, but with the advent of new technologies and innovation, it is critical for operators to fill capability gaps with new innovation models and updated talent strategies to create a digital workforce to not only match consumer demand, but anticipate it and act accordingly.

Examining the four digital themes that telecoms companies should address for their own digital transformation so that they can meet the evolving demands of their customers, we will demonstrate how Value Added Services (VAS) offers solutions for two out of the four of them:

  • Beyond the network
  • Remodelling customer engagement

In the next section, we’ll show you how.

VAS thrusts telecoms beyond the network

VAS thrusts telecoms beyond the network

Value Added Services (VAS) describes add-on products and services to the basic core functions a telecommunications company provides, such as phone or other carrier services.

VAS benefits both telecoms and customers. Telecoms are able to offer additional services over and above their core functions, and VAS provides convenience to customers, saving them both time and effort.  

VAS can be further described as possessing the following qualities:

  1. Not part of the core services of an operator, but rather, adds value to both user and carrier. 
  2. Some VAS can be offered on their own, or as a way to stimulate incremental demand for core services.
  3. Some VAS are able to operationally stand on their own.
  4. Won’t cannibalize basic service until proven favourable.
  5. Often sold at a premium price.
  6. May offer synergy between other services.

Value-added services on offer today will become a basic service when they no longer provide differentiation in the market because they’ve become so common-place.

Some examples of VAS services for telecoms:

  • Bulk SMS to broadcast hundreds or thousands of SMSes.
  • USSD to provide self-help services to customers, like data top-ups.
  • GPS navigation technology to find services or stores closest to users.

In order to maintain or increase profit, as well as to create a differentiating factor, telecoms can no longer remain in a network and infrastructure-only frame of mind. 

VAS thrusts telecommunications out of average and into extraordinary.

VAS is also used by progressive telcos to:

  1. Increase user time spent on mobile devices. 
  2. Upselling additional services to users of core products or services. 
  3. Create synergy flow in the telco’s range of services.
  4. Create a differentiating factor to attract more customers in a very congested, competitive industry.

VAS is not only beneficial for the business, but also for customers who benefit from improved pricing and convenience. 

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VAS assists telcos to create new revenue streams


In order for telecommunication companies to survive in the current onslaught of new-ness, many of them have started embracing other and sometimes unconventional revenue streams to stay profitable.

For example, Verizon has increased it’s reach through media, giving the Group multiple additional revenue streams over and beyond the usual telecommunications offerings. 

Another example is Orange S.A. who offers many additional services (like finance and mobile banking) together with their core network services and infrastructure.

To survive in the near future, telcos need to understand how to leverage the following to create new revenue streams:

  • Their data assets
  • Privacy and security
  • Cloud and AI technologies
  • Strategic partnerships 
  • Value added services

An added stress for telcos is to navigate through privacy and security regulations, and many have already joined forces with trusted experts, like banks and insurance brokers.

Strategically partnering with data-rich and tech-savvy companies can help telcos embrace new and emerging technologies such as AI in order to maximise monetization.

Additional VAS benefits for telecommunication companies

We’ve already demonstrated that VAS:

  1. Provides telcos the opportunity to move beyond the network for additional revenue streams, and
  2. Remodels customer engagement as it replaces the old delivery models with a standardised, holistic approach that is targeted at end-to-end service management, enabling best industry practices, inclusion of specific service levels and standardised processes to result in an optimal service experience for customers.

What else can telcos expect from implementing VAS?

  1. Operators who offer more value than their competitors see a decrease in churn rate and increased loyalty.
  2. Most Value Added Services result in users spending more time on their devices, which translates into an increased need for data and therefore higher profits.
  3. VAS intensifies the whole customer experience by improving quality, touchpoints, and offerings.
  4. Because it provides increased revenue streams, it leads to increased ARPU and higher profitability.
  5. Reduction in capital expenditure (CAPEX) and operational expenditure (OPEX); this is because VAS allows telecoms to streamline the supply chain and reduce suppliers and steps in the process.
  6. More and more customers are demanding personalisation. VAS assists in enabling telecommunications companies to provide a personalised experience.
  7. Less revenue leakage.

It’s important to understand that each value added solution comes with it’s additional benefits. 

For example, In-App Ads allow telecoms to monetize their apps, or offer app monetization functionality to clients. In-App Ads allows the customer to display current promotions, new solutions or customised solutions. It includes the client’s branding, offers multi language support and display content can be fully controlled.

VAS by Adapt IT|Telecoms

VAS by Adapt IT|Telecoms

What Value Added Services does Adapt IT|Telecoms offer, and what are their benefits to telecoms?

USSD

USSD allows for interactive communication between the customer and user. Telcos use USSD to offer subscribers a self-help avenue, enable ways to make transactions, to get feedback from users and as a service to subscribers to access WhatsApp and Facebook without requiring costly data.

Benefits:

  • Use USSD as a marketing medium.
  • An additional revenue stream which means increased ARPU and profitability.
  • Enhance customer engagement through personalisation and self-help functionality.
  • Decrease in churn rate by improving offerings.
  • Fosters Increased loyalty.
  • Reduction in CAPEX and OPEX.
  • Decreased revenue leakage.

SMS

SMS is currently the most successful mobile advertising channel, and enjoys a higher open rate than email. It prompts the user to take the desired action.

Benefits:

  • Offers additional revenue streams which means increased ARPU and profitability.
  • The cost of SMSes are very affordable which makes it a viable communication channel.
  • Enhances customer engagement through personalisation.
  • When done correctly, it best achieves the marketing call to action objective. 
  • Decrease in churn rate by improving offerings.
  • Fosters increased user loyalty.
  • Decreased revenue leakage.

Bulk SMS

Bulk SMS allows organisations to send hundreds or thousands of SMSes to multiple mobile phone numbers, quickly and at an affordable rate. SMS has an extremely high open rate compared to any other communication channel.

Benefits:

  • Effective marketing or communication channel.
  • Offers additional revenue streams which means increased ARPU and profitability.
  • The cost of SMSes are very affordable which makes it a viable communication channel.
  • Enhances customer engagement.
  • When done correctly, it best achieves the marketing call to action objective. 
  • Decrease in churn rate by improving offerings.
  • Fosters increased user loyalty.
  • Decreased revenue leakage.

Please Call Me

Please Call Me is a free service on top of USSD, and is valuable to many users, as it allows users to request a recipient to call them. It does not require internet connectivity. Also great as a marketing medium.

Benefits:

  • Value-add, free service to users; good to offer specific target markets.
  • Effective marketing or communication channel.
  • Offers additional revenue streams which means increased ARPU and profitability.
  • The cost is very affordable.
  • Enhances customer engagement.
  • When done correctly, it best achieves the marketing call to action objective. 
  • Decrease in churn rate by improving offerings.
  • Fosters increased user loyalty.
  • Decreased revenue leakage.

Devices Look Up

Devices Look Up (IMEI) allows organisations to look up details about mobile devices, and track them no matter where they are or what time it is. Upgrade devices, and lock or unlock them from anywhere. Useful to keep on top of criminal activity, or to locate lost phones.

Benefits:

  • Value-add, free service to users; as crime is on the rise, knowing they can call their provider to stop further usage, is essential for users.
  • Enhances customer engagement.
  • Decrease in churn rate by improving offerings.
  • Fosters increased user loyalty.

Subscriber and Device Provisioning

Subscriber and Device Provisioning enables organisations to plan new or upgrade user services, with the ability to send relevant settings directly to the user’s device. Customise mobile features according to the user’s business requirements.

Benefits:

  • Convenience for both user and company. 
  • Enhances customer engagement through personalisation.
  • Decrease in churn rate by improving offerings.
  • Fosters increased user loyalty.
  • Decreased revenue leakage.

Call Collect Reverse Cost

Call Collect Reverse Cost is a service that allows a prepaid user who does not have airtime, to make a call to a postpaid user, of which the cost is allocated to. A truly value-add service for certain target markets, like parents whose children can contact them anytime, even if they don’t have data, or businesses, where employees may be on the road and they have no internet connection or airtime.

Benefits:

  • Convenience for both user and company. 
  • Enhances customer engagement through personalisation.
  • Decrease in churn rate by improving offerings.
  • Fosters increased user loyalty.
  • Decreased revenue leakage.

Service or Store Locator

Service / Store Locator uses GPS navigation technology to locate services or stores closest to the user or organisation.

Benefits:

  • Offer additional revenue streams which means increased ARPU and profitability.
  • Enhance customer engagement through personalisation. 
  • Decrease in churn rate by improving offerings.
  • Increased loyalty.
  • More data usage equals higher profits.
  • Reduction in CAPEX and OPEX.
  • Decreased revenue leakage.

In-App Ads

In-App-Ads is a platform that allows for the monetization of your customer’s apps. Smartphone usage increases every day. In 2019, Android smartphone users alone could choose between a staggering 2.57 million apps. As such, mobile advertising is in the midst of experiencing huge expansion.

Benefits:

  • Offer additional revenue streams which means increased ARPU and profitability.
  • Enhance customer engagement through personalisation.
  • Decrease in churn rate by improving offerings.
  • Increased loyalty.
  • More data usage equals higher profits.
  • Reduction in CAPEX and OPEX.
  • Decreased revenue leakage.

Market Perception Research

Market Perception Research MNOs, MVNOs and subscribers can view data that helps them to make informed choices with regards to branding, resources and operations. Shows trends, Voice, Data and SMS usage for campaigns.

Benefits:

  • Offer additional revenue streams which means increased ARPU and profitability.
  • Enhance customer engagement through personalisation.
  • Decrease in churn rate by improving offerings.
  • Increased loyalty.
  • Reduction in CAPEX and OPEX.
  • Decreased revenue leakage.
  • Builds strong relationships with customers.
  • Provides valuable user data to operators to facilitate good business decisions.

APN-As-A-Service

APN-as-a-Service empowers MVNOs to not only offer but also monetize a data management service to end-users without managing complex setups, configuration or integration into the primary network.

Benefits:

  • Monetize data management, and sell monetization as a service.
  • Offer additional revenue streams which means increased ARPU and profitability.
  • Enhance customer engagement through personalisation.
  • Decrease in churn rate by improving offerings.
  • Increased loyalty.
  • More data usage equals higher profits.
  • Reduction in CAPEX and OPEX.
  • Decreased revenue leakage.

Find out more about APN-as-a-Service.

Summary 

Telecom executives are facing ferocious pressure from competition, innovation and new technology.

There is a huge demand for digitization across all industries, but fulfillment depends on telecoms who have been slow to take up the challenge, even though it is essential they undergo their own internal digital transformation first.

With this in mind, telecoms should focus on the areas that will have the most impact, and two of them are:

  1. Beyond the network
  2. Remodelling customer engagement

VAS assists in transforming business beyond infrastructure as well as remodelling the customer experience to create new revenue streams.

VAS supports digital transformation in the telecommunications sector.

How is your business separating itself from the pack?

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