The telecommunications industry has facilitated the rapid adoption of social networking and social business on a global scale. But to what extent have communications service providers (CSPs) used social networking and social tools to transform their own businesses? The adoption of social media by CSPs to engage with customers is still very low. And with respect to applying social tools to drive innovation, CSPs are clearly outpaced by over-the-top service providers. A new IBM Institute for Business Value study reveals how CSPs use social approaches to adapt to the evolving marketplace.

1. Rob van den Dam, Global Telecom Leader IBM Institute for Business Value
27 June 2013
Telecom’s future is social
The value of social business for telecom providers
© 2013 IBM Corporation

2. The IBM Institute for Business Value creates fact based thought
leadership that help clients realize business value
Future
Agendas
CXO
Surveys
3 to 10 year industry outlook
with action oriented next steps
2
Value Realization
Studies
In-depth assessment of today’s
critical issues, opportunities, etc
Chief Officiers studies – CEO,
CIO, CMO, CFO, CHRO, etc.
© 2013 IBM Corporation

3. Content
 Why is Social Business important for Communications Service Providers (CSPs)?
 Create valued customer experiences
 Drive workforce productivity and effectiveness
 Accelerate innovation
 Questions to ask yourself
3
© 2013 IBM Corporation

4. Why is Social Business
important for CSPs?
4
© 2013 IBM Corporation
© 2013 IBM Corporation

5. CSPs increasingly realize that it is key to more effectively engage
with customers, employees and partners, ánd to stimulate innovation
93% of CSPs will
56% of CSPs plan
67% of CSPs focus
focus more on “getting
closer to the customer”
over the next 5 years.
dramatic improvements in
internal collaboration and
on industry model
innovation to find new
sources of revenue.
70% focus on significantly
improving collaborating with
other organizations.
– IBM CEO Study 2010
5
– IBM CEO Study 2012 2010
– IBM CHRO Study 2010
© 2013 IBM Corporation

6. More and more CSPs are planning to use social business to connect
to customers, employees and partners, and to spur innovation
A Social Business uses collaborative tools, social media platforms
and supporting practices to engage Customers, Employees,
Business partners and other stakeholders in an ongoing dialogue.
Create valued
customer
experiences
6
Drive
workforce
productivity and
effectiveness
Source: Institute for Business Value, 2012 Business of Social Business Study
Accelerate
innovation
© 2013 IBM Corporation

7. CSPs are increasing their SB investments, but many remain
underprepared for changes required, and uncertain about the impact
CSP overall SB investments
Likely to increase in the
next three years
Investment has
increased in 2012
58%
49%
Percentage underprepared for SB
Underprepared for
the necessary
cultural changes
Unsure about impact of
social business over
next three years
Limited understanding of
the business value
we intend to obtain
85%
66%
55%
Source: Institute for Business Value, 2012 Business of Social Business Study
7
© 2013 IBM Corporation

8. Create valued customer
experiences
8
Create valued
customer
experiences
© 2013 IBM Corporation
© 2013 IBM Corporation

9. Internet, the mobile and social media has led to an amazing
consumer revolution as profound as any seen before
Today, there are roughly
1.3 Billion users online
in Asia
9
Source: Internetworldstats
900
There are close to
Million social media
users in Asia
Source: wearesocial.net (March 2013)
800
Roughly
Million users
in Asia are assessing the
internet from mobile devices
Source: eMarketer
© 2013 IBM Corporation

10. Despite CSPs are at the center of all this – they carry all this traffic –
they have not kept pace with all of the changes in today’s environment
Global CSP Marketing Priority Matrix
3
11
1
7
60
2
4
8
50
12
7
11
Factors impacting
marketing
Percent of CMOs selecting
as ‘Top five factors’
40
10
0
20
40
60
6
ROI accountability
8
Regulatory considerations
Emerging market opportunities
10
5
6
Decreasing brand loyalty
Shifting consumer demographics
9
10
9
Data explosion
5
3
Social media
7
70
Growth of channel and device choices
4
Percent of CMOs reporting
underpreparedness
Customer collaboration and influence
2
6
Underpreparedness
1
Financial constraints
11
Privacy considerations
12
Corporate transparency
13
Global outsourcing
Mean
© 2013 IBM Corporation

11. In fact, in this amazing consumer revolution they feel their
customers pulling away rather than getting closer
2011 IBM Telecom Consumer Survey across 25 countries: Global
average of advocacy levels in Telecommunications industry
18%
22%
60%
Advocates
Apathetics
Antagonists
UK
Germany
Italy
France
Canada
US
Mexico
Brazil
Retail
Industry
34%
33%
25%
26%
32%
39%
52%
51%
Telecom
Industry
20%
16%
17%
21%
13%
20%
24%
17%
Customer advocacy in Retail industry is close to twice that of the Telecommunications industry
11
© 2013 IBM Corporation

12. Consumers increasingly rely on recommendations and suggestions
from friends/peers and social networks to help make decisions
“What are your preferred sources of information when you are
looking for communications products and services?
70%
66%
Internet search
Social media
51%
28%
45%
35%
Websites of communication providers
Traditional advertising
28% of internet users
31%
19%
Emails/ promotional offers
22%
13%
Retail stores
19%
23%
Shopping portals/ auctions
users in Asia use social
media to inform purchase
decisions
64%
51%
Recommendations/ advice
Emerging Markets
Mature Markets
17%
8%
0% 10% 20% 30% 40% 50% 60% 70% 80%
12
60% of internet
Source: IBM 2011 Global Consumer Survey (25 countries, 13237 consumers)
in Asia would buy a brand
because a friend ‘likes’ it
on social networks
Source: Nielsen (2012) as cited in the ADMA yearbook
© 2013 IBM Corporation

13. The good news is that an increasing number of CSPs have started
using social media to ‘listen & engage’ with customers
Applying social approaches to listen & engage customers (±2/3 of respondents)
59%
Respond to
customer questions
79%
Capture
customer data
47%
Solicit customer
reviews and opinions
Identify and manage
key influencers
Today
13
Mine
Conversations
Crowdsource
Insights
Provide
Answers
Influence
Influencers
Reactive
Proactive
47%
Groups
79%
68%
35%
Individuals
68%
Next two years
Source: Institute for Business Value, 2012 Business of Social Business Study
(% CSPs with customer-related social business activities)
© 2013 IBM Corporation

14. Also ‘building communities’ and shifting social business activities
‘towards sales & support’ have become key CSP focus areas
Building Communities
Shift to Sales & Support
76%
82%
Promote events/
marketing campaigns
Generate sales leads
and revenue
Provide product and
services support
Sell products directly
to customers
Giffgaff (owned by O2 Telefonica) has developed a
unique approach to establish a community,
engaging customers, and driving social commerce
14
Source: Giffgaff Case Study
Today
59%
79%
35%
76%
29%
71%
Next two years
Source: Institute for Business Value, 2012 Business of Social Business Study
(% CSPs with customer-related social business activities)
© 2013 IBM Corporation

15. Drive workforce productivity
and effectiveness
15
15
Drive
workforce
productivity and
effectiveness
© 2013 IBM Corporation
© 2013 IBM Corporation

16. Only one third of the CSPs in the Social Business adoption survey
has used social approaches to address workforce issues
The Value of Social Media is not limited to customers
CSPs in the forefront are using social business tools
to facilitate sharing and collaboration across the
business, including employees, business partners
and suppliers
16
© 2013 IBM Corporation

17. For example, AT&T created a social network for their employees to
connect on new level and improve customer outcomes
Challenges:
Results:
Break down business unit and geographic
silos during the post- acquisition, postrebrand workforce
124,000 employees have increased productivity through
the use of social platforms (wikis, blogs, profiles, file
sharing, etc.)
Create a culture of collaboration and
Provide access to people, information
and ideas
Collaboration and innovation have become embedded
in AT&T’s culture as demonstrated by 98% growth in the
total number of communities
Share employee knowledge and
skills
Business problems can be resolved in half the time or
even prevented through real-time discussion groups or “TStorms”
"Today, more than 124,000 employees are using AT&T's TSpace to better
engage with their teams, increase productivity and promote innovation.“
- Blair Klein Executive Director Emerging Communications, AT&T
17
© 2013 IBM Corporation

18. Over the next two years, the number of initiatives that enable
employees to connect with external parties will rise significantly
Uses of social business for external
collaboration
Enable customer
interaction
Enable vendor/
partner interaction
29%
65%
18
 Staffing
 Procurement
 Supply chain
management
24%
59%
Leverage external talent 12%
(e.g., crowdsourcing)
Today
Customers
65%
Next two years
Source: Institute for Business Value, 2012 Business of Social Business Study
(% CSPs with workforce-related social business activities)
Vendors/
Suppliers
 Marketing
 Sales
 Product and
service
innovation
 Service
CSP
 Recruiting
 Onboarding
 Talent
development
Partners
 Business
development
 Education
 Sales and
service
delivery
Workforce
© 2013 IBM Corporation

19. Accelerate innovation
19
19
Accelerate
innovation
© 2013 IBM Corporation
© 2013 IBM Corporation

20. Forty-four percent of the CSPs in the Social Business adoption
survey has used social approaches to accelerate innovation
Social approaches to spur innovation
Developing new
compelling services
are essential for an
industry suffering
from declining profit
levels
20
Sourcing new ideas
from anyone
Using internal
communications to
innovate
Enabling structured
innovation efforts
© 2013 IBM Corporation

21. For example, China Telecommunication Corp created an innovation
platform to connect employees, partners and customers
Challenges:
Results:
Build on knowledge and experience to
innovative and create solutions faster
Enabled marketing teams to analyze new intelligence
gathered directly from consumers’ and launch new services
using insight on that subscriber
Anticipate & analyze future needs such as
addition of third generation (3G) licensing
Bring distributed work groups together
through a unified communication system
Reduced opportunity costs and risk by expanding sources
for new product ideas and by improving idea quality,
increasing the chance of marketing success
Allowed 554 new “voices” into the development process
during the first six months of the platform launch, with the
publication of the first idea a mere ten minutes after launch
“The solution enables us to deliver exciting products to the
marketplace at a faster pace than ever before.”
—Niu Gang, Associate Director, Shanghai Research Institute, CT
21
© 2013 IBM Corporation

22. Questions to ask yourself
22
22
© 2013 IBM Corporation
© 2013 IBM Corporation

23. Social Media analytics help in developing insights that can lead to
better decisions about customers and the workforce
Sentiment Analytics
Micro segment and
response prediction
Decisions
Source
Customer analytics
Market
Data sources
Financial Data
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Marketing campaign
optimization
Marketing Campaign
Data
Competitive Data
Sell
CRM Data
Sell Thru Data
What Do I offer ? When ? To whom ?
What should I invest in?
How do I identify and become more
intimate with audience segments?
How do I get a better ROI from my
marketing investments?
How can I better forecast demand in
different markets and channels?
How do I apply promotional tactics to
optimize revenue?
Scenario analysis
© 2013 IBM Corporation

24. Social business transformation is a journey leading your
organization towards fundamentally new ways of working
Key themes
Questions to ask yourself
 What approaches is your organization using to listen to, and engage
with customers?
 How do your marketing, sales, and customer service functions
coordinate around your social initiatives?
 What areas of opportunity exist within your organization to improve
collaboration through social initiatives?
 How could your organization use social approaches to better connect
with key stakeholders outside the organization?
• Where can improved idea generation have the greatest impact across
your organization?
• How could you better involve individuals outside the organization in
your innovation efforts?
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© 2013 IBM Corporation

25. Thank you
www.ibm.com/iibv
25
Rob van den Dam
Global Telecom Industry Leader
IBM Institute for Business Value
rob_vandendam@nl.ibm.com
© 2013 IBM Corporation