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Telecom Insights

Telecom Insights

Insight | Potential

5G potential far exceeds Initial rollout

As brands roll out 5G, consumers will benefit not just from much higher data speeds, but from lower latency communication between devices. While these faster speeds will be a big boost out of the gates, once the buildout of the technology advances, the applications will be game changing. Cars will instantaneously communicate dangers to each other, sensors throughout cities will help governments allocate resources effectively. The higher frequency signal required for 5G means that more access points are needed to blanket the same area with service, and that it won’t penetrate walls very well. This means that a 5G internet service provider could provide broadband speeds on par with fiber with a small amount of additional infrastructure in a building or home. This has the potential to be dramatically disruptive for existing wireline internet service providers.

Ben Edelman

VP, Syndicated Telecom

Kantar

Ben.Edelman@kantar.com

Insight | Complications

Expectations exceed reality of 5G today

It seems as if all the carriers are about to launch 5G networks, but they are not there yet because the investments are substantial. At the Consumer Electronics Show, Samsung launched its Galaxy S10 with 5G capability, but it will be difficult to find a 5G network for it to operate on. The situation with the Internet of Things is similar, at least on the business-to-consumer side. It’s still too complicated. Intuitive and reliable Smart Homes including connected appliances are not there yet. Brands are launching bits and bobs, but the fragments don’t add up in the minds of consumers. And the offerings are not compatible across brands, which leaves people confused and concerned. And do they even want their fridges watching over them?

Carlos Werner

Senior Director, Strategy & ROI

Kantar, Consulting Division

Carlos.Werner@kantar.com

Insight | Differentiation

Benefits must be explained more clearly

Other than presenting consumers with just one bill, the telecom provider brands have not done a good job of explaining the benefits of having a converged offering, where one brand provides a range of services—such as mobile, internet, and TV. Now, telecom brands are in a precarious position with 5G. They believe they need to have it, but they don’t really know why, and the cost of it is monumental. They need to communicate about something that they don’t quite understand and isn’t there yet. In addition, key people at many of the telecoms come from an engineering background, which mean that their expertise is in building and they often do not start with the customer point of view. Some of the companies are attempting to recruit people with broader skills. They also need to break down the siloes.

Charlotte Brown

Associate Director

Kantar

Charlotte.Brown@kantar.com

Insight | Expectations

Brands must manage 5G expectations

It is difficult for telecom brands to communicate about 5G since its benefits are not clear. But is also dangerous for the brands not to communicate. We saw this happen with 4G, when the lack of adequate communication created false expectations about what the service would deliver. In our research, consumers said the telecoms should perfect 3G before they move on to 4G. They asked why they needed 4G. This misunderstanding could easily be repeated with 5G, and with the Internet of Things. It would lead to a huge disappointment. Also, people may see a benefit in communicating with their Alexa, but they have little idea that a telecom brand is enabling that service.

Gaelle Bertrand

Head of Insight, Brand

Kantar, Media Division

Gaelle.Bertrand@kantar.com

Insight | 5G

Communication around 5G needs more focus

With the slow rollout of 5G underway, the challenge facing telecom brands is figuring out—and communicating—what this technology will mean for the consumer. They need to explain why the consumer needs 5G—why it’s not just another utility and what the consumer benefit is. And the brands need to have a successful launch without diluting other products and services. Larger brands, which operate in siloes and have various product strategies, may especially struggle to communicate a single-minded message explaining the benefits of 5G to the consumer and fitting it into a bigger connectivity story. This is where understanding your audience plays a critical role, where you can segment and target based on customer profiles without the harming the customer experience.

Joe McGlynn

Business Director

Wunderman Thompson

Joe.McGlynn@wunderman.com

Insight | Differentiation

Being different is the persistent category challenge

For the telecom providers, there is still a huge divide between the attitude of the business clients and consumer clients toward the Internet of Things. Businesses are pretty clear about the benefits of the IoT, with machines talking to each other. Consumers are less clear. Brands are looking to put more SIMs in more things, but the actual benefit for consumers is still being studied. There is a macro trend that sits behind the movement to content, services, and the Internet of Things. It goes back to the notion of telecom provider brands as “dumb pipes.” The problem is that in B2B services all the telecom brands are offering much the same thing, and on the consumer side, the telecom brands are offering similar bundles. With such little ability to differentiate in offer in the market—but with the need to invest heavily in the basic infrastructure to keep up anyway—a strong brand for telecoms becomes even more important. AT&T’s acquisition of Time Warner shows one part of this play, which is a classic one, to diversify its brand and reinforce its subscriber base through exclusive content.

Michael Quirke

Senior Strategist

Superunion

Michael.Quirke@lambie-nairn.com

Insight | Privacy

Privacy concerns, importance of trust will only increase

There is a flipside to the conversation about the Internet of Things and 5G. People are becoming more aware of privacy and the security of their personal data. In Europe, we’ve seen the General Data Protection Regulations and we may see some regulatory activity in the US. With IoT, there’s a push to get more devices connected. The play there for brands is not about having the most devices, it’s about which brand is in control of most of your data. All the telecom brands want that, so do tech brands. The value is in the data they collect, not in the widgets they put in your house. For the consumer, it’s about what brand you trust to hold your data. Or, do you completely opt out, which seems almost impossible now. Brands need to convince consumers that they not only can make the consumer’s life easier, they can do it while protecting the personal data. The challenge is so new and scary, and none of the brands has a handle on it yet.

Nick Vincent

Global Head of Data Engineering

Wunderman Commerce

NVincent@salmon.com

Insight | Vision

Brands should stress societal benefits of 5G

With Donald Trump’s earlier call for 6G signals, we should reflect on whether the current hype around the “Gs” helps telecom providers—or not. They now focus on speed, with the promise that 5G will be great for gaming and watching movies. While this is true, it creates a dilemma: We are becoming more concerned with digital wellbeing and are trying to moderate the time we spend online. But 5G will keep us glued to our phones for even longer. The real advantage of 5G is to realize services that have been talked about for years: autonomous driving, smart cities, telesurgery. Services that will fundamentally improve our lives and societies. A focus on speed is reductive and narrows the 5G narrative for the telecom brands. They should tell us how 5G will really impact us as consumers. An estimated 40 percent of the world’s population could have access to 5G in the next few years. To deliver that vision, we need a conversation about the power of 5G as a force for good.

Robert Roessler

Director, Technology

Hill+Knowlton Strategies

Robert.Roessler@hkstrategies.com

Insight | Relevance

5G technology can make brands more relevant

Telecom brands have been talking about the Internet of Things and 5G. There is opportunity for brands to harness the opportunity to talk about them in a more consumer friendly and relevant way. The telecom providers currently struggle to differentiate and are seen more as a utility in their most mature markets. Some of the smaller brands, like Three in the UK, have been able to focus on targeted markets. Otherwise, the telecom brands seem to have a clearer role as enablers in developing markets, where mobile technology can help with financial wellbeing, improved health, and the empowerment of women and girls.

Winnie Cheng

Director, Client Services

Kantar

Winnie.Cheng@kantar.com