INDUSTRY BRIEF

Big Data Use Cases for Telcos

How Telcos are utilizing Hadoop & Big Data to derive business value

Introduction
Data is definitely one of the most strategic assets for Communication
Service Providers (CSPs) today. With the rampant adoption of smartphones
and growth in mobile internet, CSPs today have access to unprecedented
amounts of data sources including customer profiles, device data, network
data, customer usage patterns, location data, apps downloaded, clickstream
data so on and so forth. Given an abundance of data at their fingertips,
CSPs are virtually sitting on a goldmine of information and are in a great
position to capitalize on these valuable data sets.
In order to gain insights into the avalanche of data that they have at their
disposal, Telecom Service Providers are increasingly starting to adopt Hadoop
& big data analytics solutions to turn their data into valuable business insights.
Operators believe big data will play a critical role in helping them meet business
objectives, promote growth, drive efficiencies and profitability across the entire
telecom value chain. Today, Service Providers are using Hadoop in a multitude
of ways to meet their business objectives. Some Service Providers utilize
Hadoop purely as an operational data store to drive operational efficiencies
increasing storage capacity, improving performance and reducing costs
while others are building specific data applications on top of Hadoop to
drive real-time analytics and actionable insights.
Operators believe big data will play a critical role in
helping them meet business objectives, promote growth,
drive efficiencies and profitability across the entire
telecom value chain
Key Big Data Use Cases for Telcos
From driving down churn to improving customer experience and driving
operational efficiencies there are a number of use cases for big data in Telecom
domain today. Based on a Telecoms.com industry survey, big data is poised
to bring most value to operators in the areas of customer retention, customer
segmentation, network optimization & planning and delivering upsell/cross
sell opportunities. See below the results from the Telecoms.com survey on
the potential benefits or applications of big data for CSPs.
As Telcos continue to accelerate adoption of big data, new and more innovative
use-cases that leverage Hadoop are being developed every day. Although
there is endless potential for big data within the realm of an operators
business, most of the key use cases within Telecom can be grouped under
the following four key buckets:

So how are Service Providers planning to leverage big data and analytics Key Big Data Use Cases for Telcos
in the future?
Proportion of respondents who rated the following applications of Customer Experience
Mgmt. (Customer 360) Network Optimization
big data six or seven out of seven for potential benefit to operators
Targeted Marketing & Personalization Network Capacity Planning & Optimization

55% Customer retention

Predictive Churn Analytics
Customer Journey Analytics
Network Investment Planning
Real-Time Network Analytics

Proactive Care

52.3% Segmentation/targeting

Operational Analytics Data Monetization

49% Network optimisation
Revenue Leakage & Assurance Data Analytics as a Service (DAaaS)
Cyber Security & Information Management IoT & M2M Analytics
47.3% Nework planning Order-to Activation New Revenue Engines Connected Home,
Connected Car etc.
Customer Care Optimization

44.4% Upselling/internal promotions

Figure 2: Key Big Data Use Cases for Telcos

41.5% Customer acquisition The section below looks at each of these key areas in more detail.

39% Fraud Management 1. Customer Experience Management (Customer 360)

For todays Telcos, improving and optimizing the customer experience is key
36.7% Revenue assurance to maintaining a market differentiation and driving down churn. Telcos are
leveraging Hadoop and big data analytics to gain a true 360-degree view of
35.6% 3rd party advertising/marketing their customers along the customer journey and across all of the diverse
interaction channels. Based on the detailed customer profiles, Telcos can then
Source: Telecoms.com Intelligence Industry Survey, 2014
Figure 1: Benefits & Use Case for big data for Telcos

1
Big Data Use Cases for Telcos
do targeted micro-segmentation of their consumer base, offer a compelling
customer experience, develop personalized offer recommendations and
predict and prevent churn. Some of the key use cases in this area include:
Targeted Marketing & Personalization: Offer personalized product
offerings or derive specific upsell/ cross-sell opportunities based on
modeling a number of key attributes including subscribers usage
patterns, device preferences, billing data, customer support requests,
purchase history, buying preferences combined with their demographic
information, location and socio-economic influences. Telcos can now
create targeted customer micro-segments to offer more personalized
offers and campaigns. This enables CSPs to proactively present the right
offer at the right time, in the right context to the right customer in order
to improve conversion rates. Examples include personalized data
top-up plans or up-sell recommendations based on data usage, device
upgrade campaigns based on specific customer preferences, and
discounts or tailored offers based on recent purchases or enquiries
or calls into the call center.
Targeted Marketing & Personalization and Churn Analytics
are among some of the most pervasive and common use
cases for big data Analytics within Telcos today
Customer Journey Analytics: Real-time analytics that map the user journey
and generates actionable insights that can allow Telcos to respond quickly
with a next-best offer and convert interested prospects into customers.
Data such as customer demographics, purchasing behavior and clickstreams
are being combined with attributes such as location and content preferences
to for next best offers. This also enables CSPs to map specific customers
interactions with the Telco at various stages of the lifecycle to promote
tailored offerings and campaigns. Journey analytics example could include
a real-time analytics model that pull together two personalized offers
based on customers/prospects recent interactions, overall lifetime value
and where they belong in the customer lifecycle.
Proactive Care: Using big data, Telcos are building intelligence and analytics
tools so as to proactively identify issues and fix it or offer a solution before
it impacts the customer. Not only does it provides a compelling customer
experience but it also deflects and prevents calls to the customer care
centers thereby lowering support costs. Based on a recent survey conducted
by Coleman Parkes focused on the Telco industry it found that 84 percent
of respondents were more likely to recommend their service provider if
the provider was able to identify and pre-emptively resolve potential issues
affecting them1. Given the impacts, Service Providers are proactively fixing
issues or reaching out to customers to help resolve issues before they
negatively impact the experience. Telkomsel, in Indonesia, for example,
has built a proactive dashboard, based on the Cloudera platform, for their
broadband services to identify customer experience issues for their high-
value customers and proactively fix those issues or engage with customers.
Predictive Churn Analytics: Based on a recent research from Ovum,
Telecoms operators globally can be sure to keep only about half of their
existing customer base over the next 12 months and about a quarter of all
1
Source: Amdocs Coleman Parkes Industry Survey, 2013
2
Source: Ovum - 2014 Telecoms Customer Insights Report
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users globally say they will definitely change providers2. Given the impact of
customer churn affecting the Telco industry today, Service Providers are
effectively using big data analytics to bring together various data points
including quality of service, network performance, subscriber billing
information, details on calls to the care centers, and social media
sentiment analysis to build an effective model to predict and prevent
churn. Churn prediction models allow Telcos to launch retention
campaigns that identify and then address at risk customers via
outbound channels. For example CSPs would be able to proactively reach
out to high value customers, who have experienced a series of Quality of
Service (QoS) issues or who shared a negative sentiment regarding the
service in social media, and address those issues and offer them discounts
or service credits to prevent customers from defecting.
Big data enabled Churn prediction models allow Telcos to
identify at-risk customers and by proactively target them
with retention programs
2. Network Optimization & Analytics:
In order to keep up with the explosive growth in mobile data, CSPs will need
to continue to invest heavily in their networks, pumping in as much as 18 - 20%
of their revenues3 every year into CAPEX. Network capacity is a highly valuable
resource and Telcos are starting to leverage big data & analytics to effectively
monitor and manage network capacity, build predictive capacity models
and use it for prioritizing and planning network expansion decisions.
Network Capacity Planning & Optimization: By correlating network
usage, subscriber density, along with traffic and location data, CSPs can
more accurately monitor, manage and forecast network capacity and
plan effectively for potential outages. Using real-time capacity data,
CSPs can visualize and pinpoint highly congested areas where network
usage is nearing its capacity thresholds, in order to prioritize expansion
for new capacity roll out. Similarly for areas with excess network capacity,
CSPs can plan on running specific customer campaigns or promotions to
By correlating network usage, subscriber density, along
with traffic and location data, CSPs can more accurately
monitor, manage and forecast network capacity and plan
for potential outages
increase uptake. Effectively optimizing and utilizing network capacity
can mean millions of dollars in savings for Telcos every year. Based on
real-time analytics and traffic, CSPs can also develop predictive capacity
forecasting models, track actual versus forecasted traffic to fine-tune the
model and plan for supplemental capacity in case of outages.
Network Expansion & Investment Planning: Planning and prioritizing
network expansion projects can be a tricky and a balancing act for CSPs.
With so many dependencies and considerations, CSPs need to be able
to effectively prioritize their investments and resources based on future
connectivity needs, strategic objectives, projected RoI, forecasted traffic,
customer experience etc. all while ensuring that your highest valued
3
Source: Ovum - Communications Service Provider (CSP) Revenue & Capex Forecast: 2014-19
4
Source: KPMG Report - http://www.cellular-news.com/story/Reports/42735.php 2
Big Data Use Cases for Telcos
customers get to benefit from these investments as well. CSPs need to
be able to effectively combine network traffic data, customer experience
metrics, revenue potential and location data along with customer value
data to ensure they are investing their CAPEX in the right spots. A number
of CSPs are already using Hadoop and big data analytics tools to aid in
their network expansion and planning purposes. BT, for example, is using
Hadoop and big data analytics to help them prioritize how and where they
can expand high-speed broadband services to customers within the UK.
Real-Time Network Analytics: CSPs are also using big data and analytical
tools to build real time capacity heat maps that continually monitor the
quality of user experience and alert the teams for network congestion or
potential outages. CSPs used to rely on historical data for their network
management but Big data analytics can enhance these processes by
enabling real-time processing of network data to continuously monitor
and manage the network and help them model network activity and map
future demand. As a result, network engineers can get a holistic view of
events occurring in the network and can proactively respond to network
failures and outages helping them save millions. For example, Service
Providers can now model the potential impact, in real-time, of a particular
cell site goes down based on the number of subscriber and capacity in
the adjacent sites. Similarly based on real-time data collected from the
cell towers, engineers can monitor any drop in service performance at a
specific location and send in crews, if need be, for a proactive resolution.
CSPs are using big data and analytical tools to build real time
capacity heat maps that continually monitor the quality of
user experience and alert the teams for network congestion
or potential outages
3. Telco Operational Analytics
Another key area of application for CSPs is the use of big data around
driving internal efficiencies, process improvements and cost savings
around the core Telco operations. Telcos are starting to adopt big data
solutions powered by Hadoop for everything from plugging and minimizing
revenue leakage, managing network and cyber security, driving down
order-to-activation lead-times to proactively identifying and fixing
customer issues in order to minimize truck rolls. Some of the more
prominent use cases include:
Revenue leakage & Revenue Assurance: Based on industry estimates,
CSPs lose approx. 2.8% of their revenues to leakage & fraud annually
costing the industry approximately US $40 Billion every year4, which
means Telcos could be adding $ 40 Billion to their bottom-line without
selling any additional products or services. Leveraging Hadoop and big
data solutions enables the CSPs to examine and plug dozens of actual
or potential leakage points through the network and customer-facing
systems, and to correct data before it reaches the billing system. Hadoop
based solutions can help Service Providers to process and analyze both
structured and unstructured data going back several years, rather than
just a few months, enabling them to gain a better understanding of the
behavior of customers. Crucially, Hadoop has made it cost-effective to
use deep packet inspection (DPI) to detect fraud and revenue leaks, as
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well as identify new revenue opportunities. DPI generates vast amounts
of data up to millions of records per second, which simply wouldnt be
possible to collect or analyze without Hadoop.
Telecom industry globally loses an estimated US $40
billion each year due to revenue leakage
Cyber Security & Information Management: As device proliferation
continues, Cyber security takes center stage for CSPs are they race to
ensure their networks and associated systems are secure from malicious
attacks. Legacy event detection capabilities are unable to collect and analyze
all the data sources necessary for identifying & responding to advanced
threats due to the sheer cost and complexity. Security professionals
need to be able to access and analyze an avalanche of data (including
logs, events, packets, flow data, asset data, configuration data etc.) in
real-time in order to mitigate risk, detect incidents, and respond to breaches.
Communication Service Providers are increasingly starting to rely on
Hadoop-based big data platforms to collect and analyze log data, to find
anomalies that will in turn fire an alert when detecting unusual activity
and creates an event for a security analyst. The Hadoop based data hubs
can provide a cost-effective platform for storage and advanced analytics
capabilities to support deep packet analysis, behavior analytics and
profiling and threat modeling.
Given all the data they have at their disposal, CSPs are
starting to mine, model, aggregate and anonymize these
data sets to create powerful statistics that can be of
significant value to other businesses and verticals
4. Data Monetization
CSPs have unique advantage in that they have access to a wide variety and
ever-increasing valuable sources of data including subscriber demographics,
subscriber location, network usage, devise, application usage, preferences etc.
Given all the data they have at their disposal, CSPs are starting to mine, model,
aggregate and anonymize these data sets to create powerful statistics that can
be of significant value to other businesses and verticals.
Data Analytics as a Service (DAaaS): By combining the customer location
information with customer demographics and preferences, CSPs are
starting to provide Data Analytics as a Service (DAaaS) to other key
verticals including: retail, financial services, advertising, healthcare,
public services and other customer-facing businesses. There is a wide
variety of application and use cases for data centric analytics ranging
from - customer footfall analytics which is helping retail chains decipher
who is visiting their stores and when, to assisting cities understand their
traffic patterns and bottlenecks, helping logistics companies fine tune
their delivery processes and aiding advertising companies offer targeted
campaign and advertising for specific micro segments. A number of leading
Service Providers including Verizon, Sprint and Telefonica are already
capitalizing on these opportunities and have created specific business
entities that focus on delivering analytics services and monetizing data
3

assets for other verticals. Even though the data analytics market
opportunities are still in a nascent stage, there is significant traction
and enthusiasm in this space and CSPs will look to accelerate their
revenue share from analytics services in the future. However, Telcos must
navigate personal and data privacy issues by carefully aggregating and
anonymizing customer data to ensure confidential provide information
about individual customers are not disclosed. Though privacy is still a
concern, if executed right, CSPs have an opportunity to effectively
monetize customer insights by making it relevant to other businesses
and verticals without compromising on subscriber privacy and rights.
The number of connected objects representing the IoT
ecosystem is expected to reach 50 Billion by 20205
IoT & M2M analytics: According to industry sources, the number of
connected objects representing the IoT ecosystem is expected to reach
50 Billion by 20205. Beyond playing a key role in managing the connectivity
requirements of the 50+ Billion connected devices, CSPs are trying to
leverage the IoT opportunity to move up the value chain from providing
just connectivity services, to providing end-to-end M2M solutions, platforms
and data analytics services. As data volumes from IoT are expected to
increase at an accelerated pace, CSPs, due of their inherent proximity to
data generated, can play a dominant role across the value chain from
collecting the streaming data, to processing, storing, analyzing and serving
intelligence back to their end customers. More importantly, CSPs have the
ability to add location based and geo-spatial elements to the streaming
data to enrich the insights of the data coming so that it can provide valuable
insights to the enterprise verticals. Also since most of the streaming data
from sensors needs to be encrypted before they can be transferred across
a WAN, CSPs are ideally positioned to be the data integrators and aggregators
providing security and analytics to the data. With petabytes of data streaming
5
Source: Source: Cisco - Connections Counter: The Internet of Everything in Motion, 2013
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in multiple formats in real-time from sensors across multiple geographies,
CSPs are leveraging Hadoop as the ideal platform to collect, store, secure,
manage and analyze these data sets in real-time. Today, CSPs are already in
the forefront driving the evolution of key IoT concepts including connected
homes, connected cars, e-health and smart cities, and the demand for data
management and analytics services will only continue to grow as these
offerings mature.
This is just a summary of some of the most prominent use cases within the
Telecom domain today and as the industry evolves, big data and analytics
will continue to transform and be an inherent part of Telco operations with
multitude of new use cases and applications. Harnessing big data presents
Telcos with tremendous opportunities to effectively leverage the enormous
amounts of data that they have in order to enhance customer experience,
build more efficient networks, drive down costs and open new revenue
generating engines.
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