One reason telcos struggle to leverage user data as quickly as digital players is the time it takes to clear services with internal Ethics Committees. Post-Facebook, it seems they were on to something.
Two years ago I was at a conference, and we were discussing the behavior of the ‘new’ digital players, and how it differed from telcos. Bearing in mind that the audience was mainly telcos, the conclusion – not surprisingly – was that digital players had the advantage of being able to try stuff, see if it worked, ramp it up or tear it down, fast as you like.
Even though we were all agreed that telcos and digital players were natural partners, there was an element of ‘it’s alright for some’ about it.
We discussed an example of being able to use customers’ data to offer them relevant services. For example, let’s say a customer, 22 days into the billing cycle, is about to exceed his data cap. He is a big Facebook fan (as noted, this was a couple of years ago). Instead of letting him run out of data, throttling his usage, or charging him overage, the telco might instead send him a message saying, “You are about to run out of data, but for €5 euros you can continue to use Facebook (other social media sites are increasingly available) as much as you like.”
Why, we asked, could telcos not do something like that?
After a silence, one telco representative said that it was a great idea but wouldn’t work. For one thing it would take too long to set up, implement, get the plan approved and all those tedious things. And for another he would have to put the case to his Ethics Committee.
There was what my aunt would have called a pregnant pause in the conversation.
The other telcos started to nod in agreement. Yes, they too, would have to take it to their Ethics Committees.
I was, to use an expression my aunt would never utter, gobsmacked.
Ethics Committees? Really?
Yes, apparently, really.
At the time, my conclusion was that telcos were definitely on a losing wicket. They were not only incapable of moving fast, but they also had the burden of regulation, ethics, liability and probably a whole lot of other stuff to worry about that made rash product launches before things were ‘perfect’ not worth the risk.
How times change.
We have, of course, been saying to anyone who would listen that Facebook would get its comeuppance. We said it would be because they had gone from a social network to a commercial network, and had become an anti-social network at their users’ expense. What we underestimated was that when the extent of the data plunder was revealed, there would be so much else that they had ignored and not thought through.
This has led Mark Zuckerberg to admit, well, loads of mistakes and take personal responsibility.
Which is fine, but probably too late.
This series of events will trigger the rise of the subscription alternative as customers realize that internet economics actually means data plunder on a massive scale. Spotify spotted this early on, and their premium service was taken up by many customers – and many millennial customers to boot. As one father told me, “My daughter would rather spend her allowance on not having adverts than on almost anything else.”
As well as providing a boost to the ‘subscription economy’ the latest debacle may also provide a window of opportunity for a Next Big Thing – a product or service based on ethics (a nice way of packaging trust).
It may well be time to make the Ethics Committee customer-facing and appoint a CEO – Chief Ethics Officer. It worked for coffee, why not for communications services?