Mobile and telco operators are doing everything they can to gain and retain customers. Major operators are looking to expand their service offerings and provide more value to consumers to win their long-term loyalty. By integrating additional services such as OTT video, music or gaming subscriptions into their mobile or broadband packages, telcos are beginning to reposition themselves in the digital economy, increasingly pursuing hybrid monetization strategies to secure their future. Here are the pivotal shifts helping operators capitalize on new revenue streams while increasing retention rates in 2024:
#1: SHIFTING ECONOMIC REALITIES WILL LEAD TO AN INCREASE IN OTT BUNDLING
Telcos are navigating a period of intensified competition and changing consumer behaviors, requiring innovative strategies to boost revenue and sustain customer growth. As legacy telco revenues begin to decrease in value, we are simultaneously seeing streaming video consumers experience subscription fatigue from juggling multiple subscriptions, with cost reduction on their minds. This combination has created the perfect opportunity for telcos to bundle and aggregate video services for consumers by strategically partnering with OTT providers. Effective OTT bundling partnerships can create win-win scenarios. Customers perceive greater value as they pay less for multiple services than they would if subscribing to each individually. Major streaming players also gain easier access to local markets via operators that already have a billing relationship with subscribers. Meanwhile, operators can benefit from increased customer loyalty, higher ARPU, and a number of upselling opportunities.
#2: BUNDLING TO IMPROVE RETENTION
By integrating various digital services – such as OTT video, digital news subscriptions and lifestyle applications – into a single billing structure, telcos can significantly enhance customer convenience. This unified approach addresses a common pain point for consumers: the challenge of managing multiple subscriptions and bills. When customers can access a variety of services under one bill, it simplifies and streamlines their experience while presenting more attractive and manageable cost points.
From a retention standpoint, service bundles create a stickier proposition. The more services a customer subscribes to through a single provider, the less likely they are to switch to a competitor. By leveraging insight from deep data sets and AI-driven tools, telcos can tailor their bundles to meet the specific preferences of individual customers, delivering personalized offers to enable more customer-centric experiences that foster a deeper sense of loyalty and satisfaction.
#3: AI IS DRIVING BUSINESS OUTCOMES EVERY DAY
AI-powered tools are helping operators transform subscriber acquisition, onboarding, and retention, leading to game-changing improvements in revenues. One critical area where we will see AI making a substantial impact is in the prediction and prevention of subscriber churn. AI-powered churn propensity models are enabling businesses to tap into vast amounts of rich, high-quality data from millions of real-world user profiles, helping identify patterns indicative of potential churn and proactively intervening with tailored engagement strategies. By understanding the factors that influence customer satisfaction and loyalty, telcos can implement targeted retention measures such as personalized promotions, step-down payments, pause and resume capabilities, reducing churn rates and securing long-term revenue streams.
As much as 24% of recurring payment collection attempts fail due to processing errors, false declines, or card information changes, leading to involuntary subscriber churn and revenue loss. Today, new AI-driven tools are being harnessed to prevent involuntary turnover by identifying the optimal payment retry strategy and automatically enacting payment resubmissions in the case of a failure. As telco organizations begin to harness the potential of AI-driven churn management tools, businesses will stop leaving money on the table and drive marginal increases in revenue that add up to significant amounts when applied across millions of global subscribers.
#4: MODERNIZE TO CAPITALIZE ON 5G
Over the last three decades, the telecoms sector has evolved from a focus on voice communication to becoming a fundamental utility for internet enablement. This shift has been marked by a steady growth in customer numbers and a diversification of products and services offered. Telcos are not only replacing fixed-line offerings but also expanding into connectivity for Internet of Things (IoT) applications, and, with the introduction of 5G, venturing further into enterprise solutions with a range of cloud edge use cases.
5G technology has been a game-changer for the industry, unlocking unprecedented potential for innovation and service diversification. With its high-speed connectivity, low latency, and increased reliability, 5G is now enabling telcos to explore new domains and offer services that go beyond traditional telecommunications. These services include enhanced mobile broadband, mission-critical communications, and massive IoT connectivity, paving the way for transformative use cases in smart cities, telemedicine, virtual reality, and more.
However, preparing for these 5G-enabled services requires the modernization of legacy systems and infrastructure. Diversifying your service offering to support multiple business models requires complex integrations around billing and customer engagement. Organizations now require more agile, cloud-centric monetization platforms that can deliver the insights and fractional billing needed to power a new generation of services. This is a vital foundation for products that may require complex partnerships with third parties for the delivery of value-added services.
The telecom industry stands at the cusp of a new era. However, many organizations are being held back by siloed, legacy systems around monetization, customer management and retention that may leave them slipping behind the pace of change. As telcos begin to embrace their evolving role as digital lifestyle providers, overcoming complex integration challenges to enable hybrid monetization is critical. Businesses that can accelerate and simplify their digital transformation efforts will be well-positioned to lead the charge — and they’ll have all the ingredients to keep their customers happy, too.
