Market Trends of Telecom Analytics Industry
The surge in need for churn reduction
- In the context of the telecom sector, churn can be defined as the percentage of subscribers who switch service providers within a predetermined time frame. Companies are putting a lot of effort into lowering churn since if the percentage increases year over year, it damages the company's brand. This badly impacts future sales and business for the corporation. According to krtrimaiq, New Jersey and California have the highest churn percentage in the US.
- By using telecom analytics, it cut churn by 15%. Telecom service providers demand customer churn analytics solutions to prevent revenue loss, enhance customer service, and save marketing and sales expenses. By implementing telecom analytics solutions, carriers can learn extensively from subscriber usage data to identify subscriber behavior patterns and enhance customer experiences. Additionally, it gives telecom providers the ability to cross-sell and up-sell.
- Telecom analytics is very important as it gives telecom companies an overview of their customers and allows them to identify the most profitable, least profitable, etc. At the same time, it also allows tracking the evolution of customer relationships (purchases, renewals, issues) and seeing where each customer is in the customer journey.
- Furthermore, one of the benefits of telecom analytics is in customer management all customer data is securely stored in one system and can be accessed at any time. As it's important to have a consistent way to collect details about each consumer for later analysis.
- Moreover, mobile phone companies such as Bharti Airtel, Reliance Jio, and Vodafone are using artificial intelligence to enhance customer experience through their customer service touchpoints call centers, and network offerings and try to find ways to improve subscriber stickiness and reduce churn.
- Additionally, companies in the market are providing telecom analytics solutions laced with machine learning to understand attitudes, enabling carriers to identify at-risk subscribers or the causes of current and prospective churn. As a result, businesses are developing marketing or customer service initiatives to reduce turnover. Additionally, it can spot subscribers ready for data plan upgrades and prospective customers for new services. In the telecom sector, churn analytics also makes it possible to predict when customers will likely transfer carriers or service providers.
- Customers in the telecom sector have a variety of service providers to select from, and they can actively switch between operators. The telecoms sector has an average annual churn rate of 15 to 25 percent in this fiercely competitive market. Customer retention has now surpassed customer acquisition in importance since it is 5-10 times more expensive to gain new customers than to keep existing ones. Retaining highly profitable consumers is the top business objective for many established operators. Telecom businesses must identify the consumers who are most likely to leave to reduce customer turnover.
- In the first quarter of Vodafone's financial year 2021/2022, the prepaid churn rate in Germany was 11.3 percent. Vodafone has the highest churn rate among its prepaying customers in the United Kingdom (UK), where the churn rate is 91.9 percent. Since the churn rate is higher in these regions, the need for churn reduction is growing significantly.
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North America to Hold the Largest Market Share
- North America is anticipated to occupy a significant market share in the telecom analytics market, primarily owing to the region's high expenditure on business intelligence solutions. Besides, telecommunications in the region is highly developed with intense competition among the communication providers, which is expected further to boost the region's telecom analytics market.
- The continuous advancements in IT infrastructure and technology used for customer support, the presence of a large number of market vendors, and the accessibility of proficient technical expertise in managing the modern customer experience and helpdesk software contribute to the telecom analytics market growth in the region. Furthermore, North American companies actively make strategic mergers and acquisitions. For instance, American technology giant IBM acquired Sanovi Technologies to bolster its cloud offerings. Sanovi provides cloud migration, business continuity, and hybrid cloud recovery software for enterprise data centres and cloud infrastructure.
- Moreover, the BYOD policy is probably driven by the growing popularity of tablets and smartphones in the US. For instance, the US Census Bureau and Consumer Technology Association predicted in January 2022 that sales of smartphones in the US would rise from USD 73 billion in 2021 to USD 74.7 billion in 2022. This is anticipated to increase further with the quick adoption of IoT across numerous sectors and companies. Hence, with the rise of smartphone users, the probability of fraud or scams is also increasing, which in turn is fueling the growth of this telecom analytics market exponentially.
- North America has a few of the world's largest cellular service providers, who rely enormously on consumer feedback. Thus, by opting for telecom analytics, CSPs in the region can offer better quality service at high efficiency. For instance, Verizon, a telecommunications provider in the United States, has deployed various analytic solutions and AI groups around the company. On the other hand, the Data Science and Cognitive Intelligence group focus on implementing analytics and cognitive technology in Verizon's customer interactions. The increased focus of other vendors in order to follow the same would boost the demand for telecom analytics solutions in the region.
- Furthermore, the rising government initiative and investment to support the internet penetration in the country will increase the demand for telecom analytics market. For instance, in July 2022, the United States Department of Agriculture (USDA) has announced a USD 401 million investment to bring high-speed Internet access to businesses and 31,000 rural residents in 11 states. This is part of the US government's commitment to investing in affordable high-speed internet and rural infrastructure.
- In a research study released by Stormforge in April 2021, 18% of respondents from North America claim that their firm spends between $100,000 and $250,000 per month on cloud computing. In addition, 32% of respondents predict that their organization's cloud spending will expand significantly over the following 12 months, while 44% predict a slight increase in cloud spending over the same period. Additionally, as per the research study by Statista Global Consumer Survey conducted in the United States in 2022, it has been found that 44 percent of respondents use online storage for files and pictures, while 40 percent of respondents use online applications to create office documents. This trend of high spending on cloud services will drive the growth of the telecom analytics market in the region.
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