How Telcos Can Use Data Analytics to Save Money

As US mobile operators engage in an all-out price war to attract rival customers, analysts are expressing rising concerns that carriers could be facing tighter profit margins.

In fact, Roe Equity Research analyst Kevin Roe sees an “unhealthy market dynamic” since he’s not convinced that AT&T’s recent $200 credit offer to entice T-Mobile customers will stop there.

“There’s more to come, and it will continue until AT&T has market-share stability,” Roe says.

If the marketing battle for customers does eat into profit margins as some industry experts have speculated, carriers will need to find other ways to offset these costs.

One way that wireless providers can do this is by using big data analytics to identify areas for operational cost savings across their networks.

Software-defined networking (SDN) could deliver up to $9 billion in operational savings for mobile operators across the world by 2017, according to a recent study commissioned by Tellabs.

The biggest savings opportunities reside with Wi-Fi offload/video redirect applications that offload mobile broadband traffic to fixed Wi-Fi and associated backhaul capacity on an application-specific or user-specific basis. Through the use of these applications, global carriers could reduce operating expenses by as much as $3.14 billion.

Other applications where SDN could produce savings include metro aggregation/load redistribution (exploiting the partial mesh or ring connectivity of high-speed metro area networks); and local breakout/Internet IXP (where certain types of mobile traffic are directed straight to the Internet at the edge of the wireless network instead of through the core mobile network).

Meanwhile, wireless carriers can also apply analytics against data traffic to identify opportunities for routing calls through their lowest-cost network options.

Because carriers also have inter-carrier traffic agreements in place (for national or international call routing on each partner’s network), analytics can also be used to analyze traffic handled along with rates charged to ensure that they aren’t over-paying or under-charging under contract rates.