By: Rob van den Dam

Big Data is making a big impact on communications service providers (CSPs).

Carriers that are diving headlong into the data analytics sea expect to enjoy differentiating advantages that can set them apart in an exceedingly competitive marketplace. Those that are lagging behind in Big Data—well, they’ll lag behind in business performance too.

So said more than 50 telecommunications-industry professionals who participated in IBM’s most recent Big Data @ Work Study, conducted by the IBM Institute for Business Value in partnership with Saïd Business School at the University of Oxford. Those participants were among more than 1,100 IT and business executives from 26 industries who shared their opinions on the topic of Big Data, which is increasingly becoming a key corporate asset.

CSPs have been collecting and analyzing data for decades, with much of that activity centered on network-performance metrics. That endeavor remains critically important in our “always on” world, but the key to unlocking the mystery—and relevance—of Big Data lies in its ability to generate information about customer behavior and demographics that can fuel smarter, revenue-generating business decisions.

Interestingly, 40 percent of CSP executives—more than double the percentage of all other industries surveyed—define Big Data as the necessary competencies for real-time information analysis. Especially in their dealings with existing customers or prospective ones, CSPs are more likely to value contextual, in-the-moment information culled from data that can propel personalized marketing campaigns, change the minds of about-to-churn customers and stop fraudulent activity before it happens.

Today, CSPs have the opportunity to mine the modern-era devices and services that their networks empower, from smartphones and tablets to RFID tags and social media, for new insights and predictions that can significantly affect revenue and profitability. As you might imagine, the ones that are already doing so are reaping the rewards.

Predicting the future, profitably

Consider the Big Data-driven work being conducted by XO Communications. A CSP that primarily serves business customers via its metropolitan fiber network, XO sought the aid of Big Data in 2011 to reduce its churn rates as efficiently as possible.

Deploying a predictive-analytics solution that evaluated more than 500 variables in order to ascertain the likelihood of small-business customer defections, XO was able to build a statistical model that keyed in on only the most relevant variables (approximately 25). Armed with that information, the company’s customer-intelligence team prioritized at-risk accounts that could benefit from examples of proactive outreach, including personalized pricing and other offers.

Within the first year of its Big Data-driven program, XO witnessed a 60 percent improvement in revenue retention rates, earning millions of dollars in annualized revenue protection. Most importantly, the company’s prioritization efforts reduced the number of client-services managers needed to generate the same level of risk coverage.