How to Develop New Revenue Streams in Global Media & Telecommunications

Global Media and Telecoms is one of the most important growth sectors for Wipro's BPO business. This industry stands out for the speed of change it's been experiencing, and the fact that – being so technology driven – it is leading the way in change. One significant challenge: with the Average Revenue Per User for traditional revenue streams dropping, it's imperative that new revenue streams compensate for this loss. Limiting the "churn" factor through smart data analytics is one strategy; upselling is another. Whatever the approach – you need to know a whole lot more about your customers than you have known to date. SSON asks Vinay Firake, Vice President & Head of Global Media & Telecommunications, for Wipro BPO, how this can be done. Vinay, you are responsible for leading the global media and telecoms BPO sector. What differentiates this industry? There are three key verticals in this industry: first, telecoms service providers – fixed line or mobile or data; second, media – meaning from publishing to online/digital; and third, telecom equipment vendors (TEV) – those that manufacture the equipment that goes into telecom networks. GMT is one of the biggest sectors for Wipro BPO. This industry is differentiated by the speed at which it changes. It’s at the forefront of change because it’s so technology driven. It’s also very difficult today to differentiate between what is a media company versus what is a telecom company, versus what is a financial services company. For example, take Tesco, a UK supermarket. It’s a retailer, but they also have Tesco Mobile – a mobile business. Similarly, a lot of telecoms service providers are providing services on Cloud. How would you describe, say, Google? Is it a telecom provider or is it a financial services provider? The lines between these different verticals are blurring. What’s certain is that we, as consumers, are highly dependent on the need to stay connected and to communicate in all walks of our life. Smartphones, tablets … they’re drastically changing the way we consume data and information. The other unique thing about this industry is that it deals with a wide range of products, from legacy products like ISDN to relatively newer products like IPTV. While most other industries evolve new products and generally retire or replace the old, here, the old products continue, but new products are launched constantly. So the challenge is to operate at the intersections and convergences of various industries with telecommunications, eg, mobile finance; or providing healthcare services offsite through remote monitoring or diagnostics. All telecom companies are having to redefine their strategies to address the blurring boundaries between telecoms, media and other industries; they’re having to discover new revenue streams because the traditional revenue streams are generating less and less revenue per user. There’s a term we use in the telecoms world, ARPU – Average Revenue Per User – and it’s dropping significantly with the fall in voice and mobile revenues. That drop has to be offset by new revenues, so another thing that is driving this sector is the relentless and continuous reassessment of their cost base and cost structure. A lot of your focus is also on what we would call the front end of the business. What are you doing for customers in this area? The way we have structured our GMT BPO organisation is by working with customers across four key towers Operations, Fulfilment, Assurance & Billing/Revenue management. One of the challenges businesses face in the telecoms world is the ease with which customers can switch from one mobile provider to another, or one landline to another, so churn becomes a big issue. We have structured our solutions and our organisation according to these towers. Now if we look at our services across these towers – fulfilment, assurance, billing and revenue management – there are front office aspects to each, where we touch the end customer, and then there are back office operations where we don’t have to touch the end customer. Our services across these address not just cost reduction but also consolidation, standardization as well as revenue augmentation. For example, there are services around up sell or cross sell. Today the challenges that most telecom companies face are related to churn, and decreasing average revenue per user, hence customer experience and relationship management across the life cycle of the customer – from purchase to activation, to customer care, and billing – becomes extremely important for any telecoms service provider. How have you developed capabilities in this sector that offer value? One of our toolsets – BASE))) – has a very solid analytic function, so what we’ve done for the telecoms customers is we’ve developed predictive analytics for churn and retention management that allow us to sense and appropriately respond. What it means in practice is that an associate talking to an end customer can pro-actively detect potential churn and can offer a coupon or some other inducement to retain the customer. How do you measure this additional value that you’re creating for customers? We measure value through a framework called a Business Value Meter. It looks at various aspects of business value, apart from cost reduction; in other words, where we’ve been able to help our customers with cost avoidance, or by reducing cost to serve, because as the average revenue per user declines, the average cost to serve per user also should decline. For example, the sooner we fulfil an order, the better for our customer’s cash flow. That is what it is really about. Measuring benefits delivered to our clients across all dimensions. In the complex world that we live in there are multiple interfaces that work between different telecom service providers, say when you travel abroad and you use a roaming network service. This is called interconnect billing, and there is a lot of leakage of revenue that happens there. So the challenge for us is to plug those leakages. Finally, there’s also the role that we play in customer experience enhancement and loyalty enhancement. For one client we’ve been able to reduce overall call volume by 40%, by improving first call resolution or by diverting some calls to web channels where online self-help tools resolve their query. We have measured the business value that we have delivered to our customers in the past couple of years, and we’ve accounted for about $78-80 million, just in the GMT BPO space. We’ve also been able to cut order to fulfil cycles for customers by circa 60%, resulting in faster cash cycles, as well as a better customer experience. These are the kinds levers that we have captured in this framework. In terms of geographies, what are the growth regions for GMT? Where do you think you’ll be focussing your expansion? A large part of our business today comes from our European clients. The next biggest market is North America/Canada. If we look at where growth will be coming from, it is, on the one hand, in markets that traditionally have not outsourced and that are now opening up for outsourcing, for instance, Nordics. The other area relates to value-added services in emerging markets. Most mature telecom players are looking at emerging markets to expand their customer base. As they set up operations in these markets, we’ve got the wherewithal to provide a managed service for them there. They need new systems, new operations … but why invest in a new system when a provider like us can provide all that as a managed service? So that’s where we’re seeing a lot of growth. We are also investing in platforms for fulfilment and billing that can be preconfigured to a great extent. How would you wrap up the challenges and opportunities for the GMT industry? The conundrum for any company in this industry is how easily customers can switch away from them. But with the analytics we have at our disposal, what we’re doing is driving predictive analytics at the same time that we’re driving down cost and improving customer experience. We’re focusing on the experience and loyalty management and helping companies still make money even though their ARPU is reducing. Also, the agility with which new products/services need to be launched, taken to market and supported is critical to their success. We are investing in standardized processes/platforms that help achieve this. Those are some of the key challenges that every company in this industry faces today. [inlinead]

How to Develop New Revenue Streams in Global Media & Telecommunications

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