The Big Data economy

The amount of currency that can be potentially generated by Big Data for service providers is huge. In fact, Alastair Hanlon, VP of market strategy for Amdocs, says an increase of 10 percent in data access will drive about $65.5 million in annual net income—a veritable fortune for many embattled CSPs around the world that are scrambling for a quick windfall of revenue.

It comes down to a simple value proposition between the customer and the service provider. Customers are willing to part with their data, but they want something in return—so what would entice them to share it? As reported by Amdocs in June:

• 65 percent would be encouraged to share their data for better pricing;
• 61 percent would choose an upgrade in network speed;
• 54 percent would select VIP customer service;
• 50 percent would prefer multidevice shared plans.

Unsurprisingly, customers can also be tantalized with cold, hard cash: 44 percent said they would prefer a straight cash reward in exchange for their data, while 36 percent of respondents indicated they’d be willing to share it for free.

In case there’s any question as to whether the biggest players in the market see the potential in a Big Data economy, the 800-pound tech gorilla in the room, Facebook, declared last year that it had invested more than $1 billion in Big Data infrastructure. Although most CSPs would be hard-pressed to fund a project of that size, they have something much more valuable than any over-the-top (OTT) player: a trusted, existing relationship with their customers. Amdocs’s Big Data survey shows that 56 percent of consumers think of their CSP as dependable, and though Coleman Parkes’s research doesn’t specifically pinpoint the psychology behind the trust that’s placed in service providers over OTT players, CSPs do enjoy a couple of clear-cut advantages.

Billions and billing

First, they’ve built up billions in marketing capital in a legacy media environment over many years. In 2012 alone, AT&T and Verizon were ranked fourth and sixth, respectively, on Kantar Media’s list of the top 10 advertisers in the US with a combined spend of just under $3 billion. That kind of money buys a lot of goodwill in the marketplace.

The second advantage is billing systems. Customers already have all of their billing information, some of the most intimate details a consumer in a capitalist society can share, on file with their CSP. Credit ratings, payment history, references—all of it lives in the records of the service provider, so the idea of exposing location information and other personal data to that same company doesn’t seem quite so intrusive.

Furthermore, the long-term relationship the service provider has with its customers enhances the quality of the billing data that’s collected (“a wealth of structured and unstructured consumer data,” as Rebecca Prudhomme, vice president of product and solutions marketing at Amdocs, put it in the press release announcing the findings of the company’s Big Data survey), which can then be leveraged into new services or revenue streams by selling the data to a third party.