Things are shifting in the telecoms market in Latin America. Operators are moving away from their legacy systems, and embracing digitisation.
They’re keeping a close eye on what operators are doing in Europe. A few years ago, the European market would have been too distant. But now, they’re asking: “What’s working in Europe that could work for us? What’s changing, and what can we adopt here?”
As the market matures and opens up, operators are changing their mindsets. With that has come a philosophical shift. Gone are the days of relying on minimal competition and revenues that rely on voice calls. Operators have an eye to the future possibilities of selling new services such as OTT and IoT, streamlining and integrating billing systems, and creating customer retention tools that will equip them for a new generation of people who switch provider as readily as they switch TV channels, to chase the better deal.
With that has come a shift in approach to how to develop the technology that supports these new services. When I started working in the industry, operators would develop everything in-house. Often, CRM systems were built on Excel, or other basic technology systems. But in the race for new customer services and revenues, operators are realising the need to improve their infrastructure. That means investment, and with that investment comes a willingness to bring in outside help.
What’s really interesting to me is that across Latin America, supply is driving demand, rather than the other way around. Operators are trusted here. They’re creating demand for new services where there was none. People are watching Netflix or using Skype for the first time. In part that’s driven by governments putting in place incentives to deploy fibre across the region - as they’re doing in Uruguay for example - which is driving demand. In other countries, operators have to decide whether to invest themselves in deploying fibre, or spend the money elsewhere – for example upgrading their own systems, or in fulfilling an obligation (as is the case in Colombia) to deliver services in the most rural areas. That doesn’t make for great network planning, but they have no choice.
Across the region, people have traditionally been fairly conservative, and wouldn’t change supplier easily, particularly when the operators were all selling voice services and there was little differentiation between them. But now three things are happening:
- The market is not about voice any more, but about data and services such as OTT.
- New NVMOs are making inroads to this new market, without the burden of legacy systems and cultures, happy to offer shorter contracts and more flexibility.
- A generation of people who are very conscious of cost and value is coming of age, and they’re switching providers to get the best deal.
Operators have to respond to this movement. They want to ensure they have a future, that their future has a secure revenue stream, and is profitable. That means investing in infrastructure and in streamlining systems so they work more efficiently and talk to each other.
It also means understanding who your customers are, what they want, and what they’ll pay for your services, so you make intelligent decisions and invest in the right areas. That comes from using data, which is the other big movement we’re seeing in the region. Operators realise that they’re sitting on a goldmine of information that they and their business customers can use to innovate and create new services and revenue channels. For example, in Chile, one operator has a neighbourhood app that connects you to a security company if you’ve been burgled, so you can track your car if it’s been stolen. In Peru, consumers can use an app to see where their nearest pharmacy is, and how much it sells medicine for compared to others in the area (this relates to a local law that means pharmacies have to publish their medicine prices each week). Initiatives like this create valuable data, tracking movement and trends that can be used to create location-based offers, or track bigger trends in behaviour.
It’s an exciting time in Latin America. Some companies are truly innovating (Telefonica Argentina has a whole department dedicated to innovation), although others are more reluctant to take the first step into the unknown.
Underlying all this change is the need to get the fundamentals right. We need strong Wi-fi. We need great connectivity in rural areas. We need a unified approach to deploying fibre. And the operators need robust systems and technology to take them into these new areas. Those that choose to invest in their own technology will be those that are protecting their futures.
Victoria Escudero is the Head of Latin America sales at Comarch’s telecoms division.