Digital Disruption in Telecom, Part 3: The Power Shift to the Customer
This is part three in a three-part series on digital disruption in the telecom industry. Read the first and second installments, and stay tuned for a new thought leadership piece at the beginning of December.
Over the past two blogs, we’ve discussed how eSIM, IoT, digital identity and blockchain are converging. eSIMs have made it easier for customers to switch between the plans network operators offer. With IoT, companies with thousands or millions of devices equipped with eSIMs can switch connectivity from one plan to another. Customers can authenticate themselves on their mobile device and securely log into other services with digital identity, and blockchain ensures all these interactions are secure.
These four technologies place the customer at the center, driving digital customer experience 2.0. And digital customer experience 2.0 is all about choice. Before, customers could choose any device, any time, anywhere. Now, not only can they do that, but they can also choose any network operator and any plan, and switch between them at will. Customers can also have multiple plans from different vendors activated at the same time.
This customer power shift puts network operators in a tough spot. If a customer has a new eSIM smartphone that they buy directly from an equipment provider like Apple, they can swap across vendors quite easily. And they can swap plans quite easily, too. In fact, there could be a scenario where customers with a surplus of data could sell their excess data to other mobile users cheaper than they could get it from the network operator themselves.
Now, many skeptics argue that this is far from this being a reality. But what if there was a layer sitting between the network operators and the mobile subscribers—say, a global MVNO with agreements and integrations in place with all the key carriers? What if they leveraged eSIM and mobile identity and could offer this to their global customer base?
This is no longer a futuristic projection—it’s already happening. A company called KeepGo has 119 operators signed up as an MVNO across 105 countries. KeepGo are offering eSIM phones with digital identity and blockchain built in. In short, KeepGo is a decentralized exchange for mobile data, letting users buy, sell, or exchange megabytes of data around the world. When customers need to roam to a different country, they can buy data for that country from subscribers in that country. In essence, they’ve created a new customer exchange that puts customers on the top and the carriers on the bottom.
If customers can now leverage the best plans and networks for their connectivity, without going to a mobile network operator, then the convergence of eSIM, digital identity and blockchain means network operators are now just commodity players. They’ll only be used when customers need them, and the envious relationships they once had with customers will further weaken. Customers can now sidestep the carriers to purchase connectivity and do it with multiple carriers across the world.
This is exciting for customers as they no longer have to be tied to a specific network or plan. They can choose the plan that suits them for the time that suits them, no matter where they are in the world, and do it easily and seamlessly without having to buy additional SIM cards.
But as a network operator, this means eSIM and blockchain are going to shift mobile data subscriber ownership. And when you think about network operators today, their whole core business is mobile. This shift in customer power is going to do exactly what OTT did to the cable industry with cord cutting. That last hold network operators had on customers is about to be torn away by eSIM, mobile identity and blockchain.
So how can network operators avoid commoditization? We’ll break that down at the beginning of December.