Data monetization for telcos: 3 ideas to inspire your next move

By: Hemang Davé

Data monetization in the telecommunications industry is undergoing a transformation.

With costs rising and margins shrinking, communications service providers (CSPs) can no longer rely on selling user information to third parties as their primary revenue strategy. Instead, telecommunications companies (telcos) must think creatively and pivot to remain competitive in this continually evolving market.

Whether you’re already updating your company’s data monetization plans or you’re still searching for inspiration, the three use cases below should help spark new conversations about how to generate revenue using your enterprise’s data trove.  

Use case 1: IoT and IIoT applications  

The advent of 5G, coupled with distributed cloud architecture and edge computing, allows telecommunications providers to host content, applications, and information closer to the end user.

By designing edge solutions that connect IoT devices over secure cloud platforms, telcos can help enterprise-level customers incorporate AI and other next-generation technologies into their operations. End users can then use these applications to boost productivity, increase efficiency, and improve workplace safety,¹ all while enhancing experiences for their customers.

Recently, our team collaborated with an alliance partner and Bucknell University² to develop a predictive maintenance solution for wind turbines that illustrates one of myriad possibilities for IIoT and IoT applications. Utilizing edge computing enabled by software-defined wide-area networking (SD-WAN), the invention is designed to improve safety and reduce downtime for wind power plants.

Once activated, a thermal camera can send images of the turbine to an edge node, where a machine learning (ML) algorithm analyzes the images to detect abnormalities in the turbine operation. SD-WAN provides a secure uplink to send the analysis results to an operations center.

Running a ML algorithm at the edge also dramatically reduces bandwidth usage and can provide intelligent, real-time decision-making capabilities. The software can even send commands to the local programmable logic controllers (PLCs) to shut down the wind turbine automatically, without human operator interaction, to prevent catastrophic turbine failures.

Key takeaway:
Increase your B2B market presence. The number of enterprise IoT connections is expected to surpass 16.7 billion by the end of 2023 and reach a market value of $483 billion by 2027, generating significant demand for 5G networks.³ Companies in the manufacturing, retail, and transportation industries will drive much of this growth as they combine private 5G networks with cloud capabilities to develop secure, personalized, low-latency applications for both internal and external uses.

Use case 2: Autonomous and 5G-enabled vehicles

In-vehicle technologies, IoT innovations, and high-speed networks have revolutionized how manufacturers design—and drivers engage with—vehicles.

Automobiles enabled with 5G technology can connect to each other, infrastructure, and network services, making roads and the vehicles on them safer, faster, and more energy efficient. Meanwhile, data from autonomous vehicles enriches in-car driving experiences and yields insights that can be used in retail and other industries.

As part of its expansion strategy, one multinational automotive manufacturer with 14 brands is leveraging 5G technology to automate many of the organization’s systems and processes. Our team and the company’s telecommunications provider are designing an open integration platform to deliver real-time insights and provide greater control over the organization’s IT environment.

Once complete, the high-speed data transfer and low latency of 5G will reduce response times and help to improve safety and innovation throughout the company. The project will also facilitate smoother and more efficient IT operations across manufacturing facilities spanning the United States, Latin America, Europe, and India.

Key takeaway:
Create new consumer revenue streams. While competition in the consumer space is fierce, it remains the primary source of revenue for telcos.⁴ The emergence of immersive technology (virtual reality, augmented reality, and mixed reality), connected cars, and smart homes and buildings will create more data monetization opportunities around connectivity, fixed wireless access (FWA), and digital services.

Use case 3: Location-based services

The proliferation of smart phones, laptops and tablets, smart watches, and other wearables has transformed location-based services into powerful data monetization tools.

IoT sensors embedded in these digital devices collect location information, analyze users’ behaviors, and push recommendations based on location and preferences.

Demand for location-based services should continue well into the next decade, providing more opportunities for telcos to help retail brands use the technology to surprise and delight customers in person and online.

For example, one high-end retailer needed to create operational efficiencies and elevate customer service at its brick-and-mortar locations. We partnered with a telco to build a modern network infrastructure that integrates inventory management and enables wifi to support augmented reality⁵ and other digital features that boost engagement between employees and customers.

Shoppers can now use handheld devices in stores to view merchandise virtually, request and “try on” different sizes and colors, and even ship items to their homes if they aren’t available in stores. Sales associates can also interact with customers in real time throughout the store, serving as personal shoppers for enhanced in-person experiences.

Key takeaway:
Move beyond individual network connections. With the vast amount of data that resides on telco networks, one of your biggest business opportunities is to analyze available data, derive patterns, and generate insights.⁶ You can then use the findings to help customers design solutions to better serve their customers or establish new business models for your company—or both.

The big picture

Moving forward, telecommunications companies will struggle to produce sustainable business outcomes using old revenue strategies.

However, the rise of 5G networks, edge computing, AI, and other disruptive technologies should create numerous income-generating opportunities for CSPs that approach select markets with customized solutions.

By taking an inspired approach to data monetization and strategy creation, you should be able to set your telco on a growth trajectory for years to come.

Hemang Davé is the Client Technical Leader for the Manufacturing, Communication, and Energy market at Kyndryl.

¹How AI is changing IoT, InfoWorld, June 2023
²VMware, Kyndryl, Bucknell University Show Smart Wind Turbine Predictive Maintenance at Hannover Messe 2023, VMware Blog, April 2023
³Winning in IoT: How the enterprise IoT market is evolving, IoT Analytics, June 2023
⁴Thinking like a 'servco': How telcos can drive B2C growth, McKinsey & Company, November 2022
⁵Augmented reality in retail: How retailers are using AR for better shopping experiences, Shopify, July 2022
⁶Unlocking the value of personalization at scale for operators, McKinsey & Company, February 2022