(MENAFN- Arab Times) Business Monitor International notes that the Kuwaiti telecoms market remains one of the most attractive in MENA with high incomes supporting demand for value-added data services in both the wireless and wireline markets. The local telecoms industry has in turn underpinned the rapid adoption of social networking and social business.
In today's world of ubiquitous connectivity where tablets and smartphones have replaced PCs as the favored gadgets in our lives, telecom's success at connecting the world has created a surprising challenge to the industry's own future prospects. That challenge stems from one of the biggest stars of the past decade: social media.
As social networking and communications applications such as Facebook, WhatsApp, and LinkedIn have become more widespread, social media is replacing conventional messaging and voice services. How then cantelecom operators adapt to these new competitors, as well as to an emerging breed of social-savvy consumers?
Evolution to digital communications
To answer this, IBM's Institute of Business Value (IBV) recently surveyed 22,000 consumers in 35 countries and executives at 15 of the largest global communications services providers.
The research highlights the dramatic rise of competition to telecoms' traditional service offerings, from which operators drew much of their revenue. For instance, almost a third of those surveyed have or will cut traditional voice calling and direct SMS messaging. In Kuwait, some analysts are already predicting that telecom service revenues will decline over the mid-term. This is despite the fact that Kuwait has one of the highest smartphone penetration rates in MENA with local operators having already launched super-speed 4G LTE mobile services to the public.
Meanwhile, consumers' use of social media and related peer communication apps is spiraling upwards on the global level. Around 65% of consumers we surveyed use social networking daily to communicate. In emerging markets that figure is as high as 75%.
While the rise of social media is a challenge to traditional telecom services, it is also telecom operators' best chance to reconnect with their customers, develop new services, and pioneer additional revenue streams. Operators like Zain Kuwait are already taking the right steps by choosing social software to deliver deeper, more personalized experiences to its customers.
Through our research, we anticipate social media reshaping the landscape of telecoms servicesin a number of key ways moving forward:
The power of word-of-mouth
Today, consumers have unprecedented power to build or demolish brand strength as they blog, text and comment via social media.
* Social Media as source of information: When shopping for new communications services, 56% of respondents turn to social media for tips - 78% among those under 25. Remarkably, only 41% of consumers report visiting the web sites of telecom providers.
* Sharing bad experiences: Four in ten respondents will always or often share bad experiences with friends and family, but only about the same percentage reaches out directly to their provider with the complaint.
* Peer influence: Approximat-ely39% of respondents said a key reason not to buy from or subscribe to a provider is discouragement from friends. It is no surprise that these recommendations would be expressed on social platforms.
The power of advocates
The Net Promoter Score (NPS) is a traditional measure of word-of-mouth advocacy. Last yeartelecom operators had an average score of only -19, on a scale from -100 to +100.
* Telcos don't get social: Although 84% of our respondents said they'd like to engage with their provider on social media to help improve service, only 35% feel their telecom provider uses social media effectively to engage with them.
* It's all about good experiences: 51% of consumers said they will become more loyal in case of good experiences with their provider.
* Again, the power of word-of-mouth: 53% of respondents said they will tell friends and family about good experiences with their provider.
Need to become globally integrated
To be able to compete with global powerhouses as Facebook and Google so as to reverse declines in revenue, telecom operators need to improve their global integration. However, IBM's study shows many C-level executives admit they are still in the early stages of this process.
* Incomplete integration: Four out of five executives report they feel less than halfway complete with the challenge of integrating operations. More than half (56%) are not confident their current integration efforts will succeed.
* Economies of scale elude: Only about one quarter (27%) of the global executives interviewed believe that their organization is successful in realizing economies of scale.
For today's telecom operators, the challenge of mining billions of social media posts and linking those to customer engagement systems requires Big Data analytics. Service providers must use these Big Data tools to re-learn what their subscribers most want, and begin to identify areas where they can deliver innovative services that tap into the huge promise of social media. Doing so will not only deliver higher efficiencies but also lower costs - benefits that can in turn be passed back to consumers.
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