Big data has potential to double telco prepaid revenue: Globys

Data-analytics applications company Globys claims that it's possible to double a telcos' prepaid recharge revenue by using big data.

The company has long worked with telcos around the world for fixed-line and mobile billing offerings, but in the last three to four years, it has made a play in using big data for targeted marketing. This involves large-scale data mining, predictive modelling, and machine learning to allow the company to identify the right time to interact with telco customers.

"We have been using that to drive reductions in churn, increasing loyalty with mobile operator customers," Globys senior vice president of data sciences Oliver Downs told ZDNet.

This has proven to be particularly fruitful when it comes to prepaid mobile customers. While telcos value acquiring new post-paid customers for a consistent and locked-in revenue stream, retaining prepaid customers shouldn't be forgotten. With no contractual obligations, this client base is not obliged to stay with one carrier, and can make the switch as soon as their phone credit runs out.

"With prepaid customers, there is essentially a churn decision that gets made on a monthly or on an even more frequent basis," Downs said. "It's easier for us to use to our big-data solution to actually generate short-term impacts in prepaid mobile customers."

When phone calls are made, SMSes are sent, and — for prepaid customers — call credit recharges are activated are just some of the data that telcos collect on their users. With applications that plug in to the back end of telco systems, Globys can use the information to initiate contextualised marketing that is aimed at individual prepaid customers.

"What we'd like to do is identify when the middle of their recharge cycle is," Downs said. "You'd think it'd be easy, but turns out it can be vary a lot depending on what prepaid plan they're on, how they use their device, [and] so on."

Once that sweet spot is identified, it prompts an action on the telco's end by using Globys' software. It could be in the form of a mid-cycle SMS that reminds customers that they can top up their credit in low dollar denominations, or even a telemarketing call.

"We are then able to get feedback on how customers respond to these things, and continue to optimise the way we interact with those customers so they will respond positively," Downs said.

Globys works exclusively with one major telco provider for this kind of prepaid contextualised marketing through big data, but Downs declined to name the client, due to confidentiality reasons. However, he was able to talk about the tangible results of this kind of big-data marking approach.

"With a mid-cycle strategy, it's possible to get a 30-50 percent lift in monthly recharge revenue," Downs said. "There can also be a 5-10 percent improvement in active base percentage, so basically customers that haven't left the service at the end of the period you're running the marketing campaign for."

Other companies like Veda also use big data to keep telco customers loyal, although the company uses the information to identify when not to engage customers, particularly when it comes to bill-payment reminders.

"In telecommunications, churn is enormous," Veda head of commercial risk Moses Samaha said at the Big Data Summit in Sydney in October. "Often, it's when you touch a customer, and you mess something up, that you remind them you are there and they decide to churn."