Telcos face challenges in being loved brands

Loved brands create strong emotional bonds with their customers, through a set of values and beliefs
that customers can identify with and incorporate into their daily lives. In theory, businesses with loved
brands have a range of advantages over others, which over time create significant financial benefits.

Business advantages for loved brands

Source: STL Partners

Like other businesses, many telcos strive to build strong emotional engagement with their customers. However, over time, telcos have found it increasingly difficult to realise this ambition.

How are telcos brands viewed by their customers?

In developed markets, telcos have generally become more functional than attractive. While the main services (voice calls, internet access) remain essential, telcos are no longer making a transformative difference in their customers’ lives. Therefore, they are perceived by customers like water, electricity or gas utilities.

There will always be some customers that have a poor opinion of telcos, particularly if they have had a recent bad experience. However, in general, telcos are not disliked, especially after the recent steps taken during the COVID-19 lockdowns, but they are no longer loved by their customers.

Brand affinity remains relatively strong in developing countries, where telcos are still able to bring new and transformational innovations to market.

What strategies could telcos adopt to succeed going forward?

It is critical for telcos to recognise that they now exist in a new environment where their relationship with their customers has significantly changed. Their core service is no longer seen as transformational or making a radical change in customers lives. Therefore, they need to create new ways to increase relevance and drive an emotional connection.

To create this emotional connection, telcos must develop a clear and consistent vision with purpose and values that are right for the new environment. They must do more than simply “dress for the interview,” and all actions must match the brand image they are creating, so as not to be superficial.

Telcos must prove to their customers that their new positioning is real. While consistency is important to building and sustaining the brand vision, its only valuable if the vision fits to the current market environment and customer expectations. As outlined above, telcos must first adapt to a changed environment and then focus relentlessly on this new position in a very clear and consistent manner.

STL Partner’s May 2022 report How can telcos be loved? offers looks at how TELUS, O2 UK, MTN, Telstra and Orange illustrates how a telco can successfully adapt to the new era and build strong emotional bonds.

5G Consumer propositions and benefits

How is consumer 5G doing so far?

With the rollout and commercialisation of 5G consumer tariffs in 2019, it is still early days in terms of seeing new 5G supported services being developed and launched. The most visible services today are currently in areas such as video, gaming, VR and AR. All operators are still in the process of migrating the bulk of their customer base from 3G and 4G to 5G. SK Telecom is one of the few operators that expect 50% of their handset subscribers to be 5G customers by the end of 2022.

Elsewhere 5G customer base penetration varies by market. For example, EE and Deutsche Telekom have 5G penetration rates of 19% and 29% while approximately 6.3% of AIS Thailand subscribers are 5G customers and 4.3% of Singtel subscribers are 5G users.

In this competitive and macro economically challenged environment (with now rising inflation), operators remain challenged in sustaining and growing ARPU as we show in the graphic below. In fact, out of the five operators shown below, only Orange France has maintained a stable ARPU in recent times. This would indicate that operator approaches to promoting and selling 5G connectivity on its own may not offset or grow ARPU for all operators and new approaches towards selling 5G connectivity and new 5G advanced services are needed to re-invigorate service revenues.

Below we outline elements of the 5G consumer propositions currently promoted by Orange France, EE UK, Deutsche Telekom, Singtel Singapore and AIS in Thailand.

Source: STL Partners

Orange France

Orange France launched 5G in December 2020 and currently covers over 1,100 municipalities of metropolitan France. The operator offers consumers very generous 5G plans (compared to 4G tariffs) with inclusive data ranging from 120GB to 200GB, the ability to connect multiple devices anywhere and tethering from the handset. From October 2022, consumers can also enjoy 5G roaming in Spain, Switzerland, and/or Luxembourg.

5G-enabled phones to take advantage of the Orange 5G network

Orange France offers a wide range of 5G-enabled phones, including the Samsung Galaxy Z Fold3, Samsung Galaxy Z Flip3, and the Xiaomi 12. The Samsung Galaxy Z Fold3, for instance, has two different prices: €989 with a €200 deferred repayment if a customer is on a 5G tariff offering (as seen in figure 1), or the customer pays €1,799 for the handset outright without the 5G tariff offering.

Orange France and Samsung offer a deferred repayment/reimbursement policy for customers who purchase select Samsung phones. Samsung will reimburse Orange France 5G customers up to €200 euros if they buy a Galaxy Z Fold3 5G phone, Galaxy A53 5G/Galaxy A33 5G phone, or Galaxy Buds2. Customers are also eligible for trade-in bonus of up to €150 for their old phones when purchasing a new 5G handset. 

Customers purchasing a new 5G tariff subscription before 1 June 2022 can also receive a €15 monthly discount for 12 months. The offer applies to select 5G 120GB, 130GB, or 200GB tariffs. The 120GB plan is a non-binding commitment, while the 130GB and the 200GB plan are binding 24-month contracts. The 120GB plan costs €20.99 per month for the first 12 months and then €32.99/month thereafter. The 130GB plan costs €29.99/month for the first 12 months and €44.99/month thereafter, while the 200GB plan costs €49.99/month for the first 12 months and then €64.99/month.

Orange 5G mobile tariffs

Source: Orange France

Unlimited Video Gaming Services

Orange France offers unlimited video gaming services as part of its 5G consumer propositions. Customers get unlimited access to over 250 games with a Video Games Pass, which is free for the first month and then costs €14.99/month thereafter. The Video Games Pass allows internet, open (internet, TV, mobile) and mobile-only consumers to play anywhere without a console, directly on Orange TV, on PC/Mac, tablet and mobile device. Customers can play with different game controllers like PlayStation 3 or 4 or Xbox 360 or Xbox one. Controllers vary in cost; the Nacon Cloud Gaming controller is €39.99 and the Xbox Series Controller + MOGA (mobile gaming) Clip is €64.99, both with free shipping, Video Game Pass compatibility, and Bluetooth connectivity. Both controllers come with a 2-year legal guarantee for repairs or exchange, including the digital elements integrated into the device itself.  

Orange France also offers a Mobile Game Pass where consumers can download unlimited mobile games with a €2.99 weekly subscription. Mobile games are available on both Android and iPhone and users can enjoy a variety of games free from ads, contract commitments or in-app purchases. To play, customers must access the free Orange games application from the games website or download the Orange Games app available on Android and iOS.  

Orange’s gaming propositions

Source: Orange France

AIS Thailand

AIS customers enjoy the fastest 5G speeds in Thailand according to Opensignal which found average download speeds of 220 Mbps – much faster than its competitors. AIS 5G offers customers services like Disney+ Hotstar, YouTube Premium, Google One, and AIS 5G Play VR.

AIS 5G postpaid proposition

Source: AIS Thailand

AIS content and service features

Disney+ Hotstar is a streaming platform that offers over 100,000 hours of TV content and movies across nine languages, bringing together Hollywood movies and content from Disney, Marvel, Star Wars, Pixar, National Geographic. There are special packages for AIS 5G customers only, costing a monthly subscription of THB 99 ($2.90) and a yearly package of THB 499 ($14.50) ending on 31 May 2022.

AIS PLAY packages for AIS mobile customers include PLAY Premium and PLAY Premium Plus. The PLAY Premium package starts at THB 19 ($0.55) on the first month and THB 199 per month ($5.80) thereafter. The PLAY Premium package comes with six months free Disney+ Hotstar, On Demand movies and cartoons, VIU Premium and beIN Sports Connect. The AIS PLAY Premium Plus has the same benefits as the Premium Package but with an added AIS Karaoke App. The karaoke app is exclusive to AIS customers and allows them to listen to different kinds of music, from Thai and Korean to pop, rock, and indie. There are also specific packages for customers who only want the Karaoke app, ranging from THB 19 ($0.55), with 300MB of data and speeds of 512 kbps, to THB 37 ($1.10), with unlimited data and speeds of 4Mpbs. Overall, AIS Play Premium Plus package costs THB 29 per month ($0.84) for the first month and THB 299 per month ($8.70) thereafter. It also comes with 12 months free access to Disney+ Hotstar.

AIS PLAY packages

Source: AIS Thailand

Google One

Google One is a subscription plan that offers its users additional cloud storage to use across Google’s portfolio of services, such as Google Drive, Gmail, and Google Photos as well as automatic phone backup. Customers get access to Google experts for all things Google, from questions on products to personalised human assistance via live chat and email. The Google One subscription includes exclusive extra member benefits like Google Play credits, cash back on Google products, and special rates on the AIS 5G Max Speed package, with storage space of 100GB. If using an Android device, customers also benefit from automated mobile backups that securely store all your important data like personal photos, videos, and contacts in the Google cloud. Should a customer damage or lose their phone, the automated backup system will enable customers to transfer data from one device to another easily via the cloud. Customers can also invite up to five family members to Google One, making it easier to store and share family data. Customers who register for a package costing THB 699 ($20.40) or more, get free Google One access for the first six months. Those who opt for a package costing less than THB 699 ($20.40), get free Google One access for the first three months. Once the three- or six-month period is over, the cost for Google One is based on data usage from the customer’s chosen package.

Google One

Source: AIS Thailand

YouTube premium

YouTube premium is a subscription service that allows users to watch videos on YouTube without ads, play videos in the background, and to download them to view offline. AIS 5G monthly customers get free YouTube Premium for four months on any package costing THB 699 ($20.40) or more. AIS Thailand offers this on postpaid 5G Max Speed packages. Customers subscribing to AIS 5G Max Speed packages under THB 699 ($20.40) get YouTube Premium free for three months.

YouTube premium

Source: AIS Thailand

AIS 5G Play VR offers consumers the ability to watch VR video content like Thai music videos, performance videos like Moon’s illusion Magic Show and education videos on the Phaya Thai Royal Palace. AIS 5G Play VR is an application that contains the VR content on a customer’s smartphone, while it is the AIS 5G VR Port that offers customers the actual VR experience. Customers on the AIS 5G Max Speed THB 1,199 package ($35.00) or more get AIS 5G Play VR for 12 months and the 5G VR Port for free. For subscriptions costing less than THB 1,199 package ($35.00), customers get the 5G VR Port at a discounted rate of THB 550 ($16.00), and AIS Play VR for 6 months, while the standalone cost of the VR Port is THB 690 ($20.00) without any package. VR music events give customers the ability to view and enjoy music as if they were on stage or at the event itself, with 180- and 360-degree camera views. The VR technology allows customers to have exclusive access to content such as K-Pop idols, and travel all over the world viewing different cities like Athens and Barcelona. Customers can subscribe to AIS 5G Play VR without the 5G Max Speed package; the standard cost is THB 199, but it is currently free for AIS customers until 31 December 2022.

Other 5G benefits, as part of the Max Speed package, include AIS 5G Play AR and 5G cloud gaming. Play AR uses a 3D volumetric camera, which refers to technology that captures a three-dimensional space, environment or object and digitises it, thereby creating the augmented reality. Play AR is only included in 5G Max Speed postpaid packages costing THB 699 or more, with a minimum duration of six months. 5G cloud gaming is also part of 5G Max Speed packages costing THB 699 or more for six months. AIS Thailand also offers both cloud gaming and AIS 5G Play AR as a service without subscribing to the 5G Max Speed package; cloud gaming costs THB 55 ($1.60) per week or THB 299 ($8.70) per month, while the AR subscription is free until 31 December 2022 but usually costs 199 THB.

AIS 5G Play VR and the 5G VR Port

Source: AIS Thailand

AIS 5G Play VR offers consumers the ability to watch VR video content like Thai music videos, performance videos like Moon’s illusion Magic Show,and education videos on the Phaya Thai Royal Palace. AIS 5G Play VR is an application that contains the VR content on a customer’s smartphone, while it is the AIS 5G VR Port that offers customers the actual VR experience. Customers on the AIS 5G Max Speed THB 1,199 package ($35.00) or more get AIS 5G Play VR for 12 months and the 5G VR Port for free. For subscriptions costing less than THB 1,199 package ($35.00), customers get the 5G VR Port at a discounted rate of THB 550 ($16.00), and AIS Play VR for 6 months, while the standalone cost of the VR Port is THB 690 ($20.00) without any package. VR music events give customers the ability to view and enjoy music as if they were on stage or at the event itself, with 180- and 360-degree camera views. The VR experience allows customers to have exclusive access to content such as K-Pop idols. Users can also experience traveling all over the world, viewing different cities like Athens and Barcelona, through the VR technology. Customers can also subscribe to AIS 5G Play VR without the 5G Max Speed package; the standard cost is THB 199, but it is currently free for AIS customers until 31 December 2022.

Other 5G benefits, as part of the Max Speed package, include AIS 5G Play AR and 5G cloud gaming. Play AR uses a 3D volumetric camera, which refers to technology that captures a three-dimensional space, environment or object and digitises it, thereby creating the augmented reality. Play AR is only included in 5G Max Speed postpaid packages costing THB 699 or more, with a minimum duration of six months. 5G cloud gaming is also part of 5G Max Speed packages costing THB 699 or more for six months. AIS Thailand also offers both cloud gaming and AIS 5G Play AR as a service on their own; clouding gaming costs for THB 55 ($1.60) per week or THB 299 ($8.70) per month, while the AR subscription is free until 31 December 2022 but usually costs 199 THB.


Singtel launched 5G services in September 2020 with its 5G non-standalone (NSA) network. In May 2021, it launched its 5G Standalone network, and now promotes advanced content rich services such as Bookful, Melody, and RiotGo.


 Source: Singtel

Bookful is a digital augmented reality (AR) reading app for children aged ten and under. The books are animated and characters, such as Peter Rabbit, are brought to life through AR and 3D animations. Bookful includes popular child friendly titles like Barbie, Sesame Street, and Dinosaur Days. Select Singtel postpaid and SIM-only customers can subscribe to Bookful. The service costs SGD 8.90 ($6.50) per month without a contract. 5G customers (subscribing to XO plans 68 or more) get three months free while postpaid (4G) customers on select tariffs can qualify for a one- month waiver. 


Source: Singtel

Melody is a virtual reality live music streaming service. Customers can watch shows by global artists like Imagine Dragons and Kelly Clarkson, as well as live music experiences from their phone or headset. The service is free for the first three months for Singtel postpaid mobile customers on a 5G subscription then costs SGD 8.90 ($6.50) per month with no contract requirement. Non-5G customers pay SGD 8.90 ($6.50) per month, with the first month free.

RiotGO (Riot Games)

Source: Singtel

RiotGo is an exclusive gaming bundle that Singtel offers its consumers giving them access to in-game content every month (free for the first three months). Customers receive data-free gameplay for mobile games such as League of Legends: Wild Rift. Riot Games League of Legends is an online multiplayer battle video game that operates globally on cloud-based virtualised live-production workflows. RiotGO is available to Singtel postpaid mobile customers and SIM Only plans. Both 5G and non-5G customers pay SGD 6.90 ($5.00) per month for the service. However, non-5G subscribers get the first month free, while 5G customers get the first three months free

Singtel also offers customers RiotGO+. This is the same as RiotGO, but RiotGo+ subscribers receive an extra 1GB of data for Riot Games. Non 5G RiotGO+ customers get one month free then pay SGD 9.90 ($7.20), while 5G subscribers get three months free then pay SGD 9.90 ($5.70). Both RiotGO+ subscriptions are also without contracts.


Exclusive 5G phones

Source: EE

EE’s latest smartphone tariffs include a range of smart benefits which are not entirely exclusive to 5G. These smart benefits include Apple Music, Apple TV+, Apple Arcade (with an offering 180 mobile games), BT Sport Ultimate, and Video Data Pass. Other promotions bundled to EE 5G smartphone and tariff plans include limited period subscriptions to YouTube Premium and the Xbox Game Pass. STL Partners May 2021 report Monetising 5G with consumers: what are the options? highlighted these 5G tariff benefits.


EE offers a 5GEE home router broadband service, which enhances the customers’ gaming experience by improving connectivity and data transmission. To buy the 5GEE home router, customers can choose the 500GB 5G data plan or the unlimited 5G data plan. Both are 18-month contracts, with a £50 upfront cost. The 500GB plan then costs £45 a month, while the unlimited 5G data plan is £50.

The Xbox Game Pass Ultimate is a gaming add-on costing £10 per month that comes with an Xbox Live Gold gaming subscription, offering over 100 games with new games added every month. The exclusive Xbox bundles include the Xbox Series X Gaming Bundle from £31 per month and the Xbox Series S Gaming Bundle from £21 per month. EE offers these benefits to 5G mobile customers and 5GEE home broadband customers. It also includes the Xbox Gaming Pass Ultimate in the Fibre Max 500 or 900 plans, with up to 20GB mobile data boost for fibre customers with an EE 5G phone plan.

5G home router

Source: EE

In June 2021 EE also launched two Gaming on the Go Pit Stops in two 5G locations (Brighton seafront and Liverpool Royal Albert Dock) to promote the release of its new Xbox Game Pass Ultimate add-on. The Pit Stops are custom-built benches that allow EE 5G customers to make full use of the 5G network through uninterrupted gameplay and superfast gaming chargers. The aim is to help gamers return to outdoor gaming, as the operator cited three quarters of gamers in 2020 had gamed outside of their home, with a fifth doing so while also on their mobiles. Apple Arcade is also one of the Smart Benefits available (to Apple iPhone Full Works customers), worth £4.99 a month offering 180 free games with no advertising and no in-app purchase.                                                            

Exclusive Xbox bundles

Source: EE

BT Sport Ultimate App

The BT Sport App uses Augmented Reality (AR) across Apple’s 5G iPhone range. Since October 2020, the app comes with features such as Watch Together (with three other friends); 360-degree camera angles with pinch and zoom options; Stadium Experience – an AR experience of select stadia areas such as dressing room, tunnel and dugout; Match Day Live – AR layer of team line-up, formation and in-game statistics, Manager Mode – adding further real-time stats such as mini-map tracking of team formations, and player speeds.

BT sport ultimate

Source: BT

5G Edge XR

BT and EE aim to bring further 5G extended reality (XR) innovations to live sports and performing arts through its 5G Edge XR project, which prototypes interactive real-time mixed reality content overlays for smartphones, tablets and VR headsets. The use cases include live events such as rugby, boxing, MotoGP, dance/music/theatre, and football. BT Media and Broadcast TV also support outside broadcast (OB) services which use 5G and edge connectivity to deliver live video feeds of events to TV broadcasters. For example, the XR Rugby broadcast overlay features include game data overlaid onto players, ball trajectories, gain-line visuals, kick distances, possession data and alternative camera viewpoints. Other features include game commentary from supporters, localised stadium advertising and route-finding information to the stadium.

5G Edge XR

Source: 5G Edge-XR

Parallel hybrid 5G-powered music event

In summer of 2021, EE and Beatport (online music store) joined together to stream live concert DJ sets from various music venues in city locations like Liverpool and Manchester. Travellers have the option to attend the event or watch the live stream from the 5G powered night club.

Beatport and EE present parallel, the UK’s first 5G event

Deutsche Telekom

Deutsche Telekom (DT) postpaid customers can purchase 5G phones both with and without a fixed contract. 5G tariffs such as Magenta Mobile S start at 6GB €39.95 per month on a 24-month contract term. Inclusive benefits include EU roaming and HotSpot Flat Rate. Other benefits include StreamOn Gaming and StreamOn Music (for free) plus Apple TV+ (3 months free). Other tariffs such as Magenta Mobile M 12GB cost €49.95 per month on a 24-month contract, with the same benefits offered. DT recommend the Magenta Mobile L tariff with 24GB inclusive data at €59.95 per month. Benefits include Apple TV+ (free for 3 months), StreamOn Gaming, StreamOn Music&Video, and StreamOn Social&Chat (all for free). The most expensive tariff is Magenta Mobile XL with unlimited data for €84.95 per month, which includes all the same benefits as Magenta Mobile L. All tariffs include a Disney+ by Telekom option free for 1 month. Additional options with DT’s 5G postpaid tariffs include Disney+ and Apple TV+.

Offerings with MagentaMobil

Hybrid wireless connections

Since 2014, Deutsche Telekom (DT) has been offering MagentaZuhause with hybrid based on LTE (4G). Now, DT is launching a hybrid fixed access and mobile access 5G broadband solution with its Speedport Smart 4 router. As DT highlight “the difference between hybrid 4G and hybrid 5G is that the antenna modules for receiving the mobile signal are no longer installed in the router, but in an external unit – the 5G receiver. This is because the higher 5G frequencies hardly ever get inside the building and the received signal is therefore too weak for high-performance transmission”. The Speedport Smart 4 is a Wireless Local Area Network (WLAN) router that becomes hybrid-enabled when connected to an outdoor 5G receiver. This hybrid combination provides more bandwidth and a more stable home network which act as a back-up if the fixed service connection drops, or in areas where fibre connectivity is yet to be rolled out. DT has not yet decided on pricing for the 5G receiver. The operator is currently giving up to 800 customers the opportunity to partake in a field test where participants can obtain an out-door 5G receiver free of charge until August 2022. Qualifying customers must already have an existing DT fixed-network line with a MagentaZuhause (Mobile Home) rate plan and 5G reception. The cost of the Speedport Smart 4 is €5.95 as part of the ‘Smart home network package’, or customers pay a one-time fee of €169.99.

Hybrid 5G connection diagram

Source: Deutsche Telekom

Virtual and augmented reality

Source: Deutsche Telekom

Deutsche Telekom has been experimenting with VR and AR for entertainment in areas such as air hockey and basketball. Customers can play AirHockey on a virtual table three metres long in an AR environment on their phone. To do so, they must use an AR marker (which is an image or object that players create through an AR mobile app) to superimpose the AR features. Customers then open the game app, create a game session, and connect the two players’ devices together. Some AR experiences may require virtual reality glasses to immerse the customers in the experience. Customers can also partake in AR basketball simulation on their smartphones. If both players have a 5G smartphone, they can place a virtual basket wherever they want and use their smartphones to throw the ball into the basket. Through AR glasses like NREAL, DT also enables customers to watch the news over a 3D projection, while VR glasses allow customers to experience 360 concerts with MagentaMusik.

5G cloud gaming

Source Deutsche Telekom

DT launched its cloud gaming service, MagentaGaming, in 2020. Customers could game on the 5G network, resulting in a user gaming experience that paralleled consoles like PlayStation or Xbox. However, in February this year, DT discontinued MagentaGaming cloud gaming service and now offers StreamOn Gaming, a service that allows customers to play video games of other companies like NVIDIA GeForce NOW, with zero rating of inclusive data. This is not explicitly a 5G service.

Live video productions

In partnership with the German TV/media group RTL Deutschland, Deutsche Telekom (DT) is testing the production of live video content in their 5G standalone network through network slicing technology. Consumers can use the virtual network to broadcast data-intensive events like concerts, football matches, or any other live action environment.

How can telcos be loved?

Why should telcos care about being a ‘loved brand’?

If you are from an engineering or financial background, it can be tempting to look at branding and think it is a trivial or ‘soft’ aspect of business. This is valid in the sense that perceptions are inherently subjective, but this subjectivity does not mean that such perceptions are unimportant. People respond very strongly and instinctively to emotional stimuli. These responses are deep in our nature. We have evolved to quickly learn the characteristics of things that we want to repeat; the things we like. This extends to social behaviours too: Who do we want to be with, and be seen to be with? Which ‘tribe’ are we in, and who do we associate with?

Businesses have learnt a lot about this, because it has proved hugely valuable to the best practitioners, and the study and practices of marketing, advertising and branding have developed significantly in the past seventy years as a result. To be a ‘loved brand’ is a shorthand description of the ideal state.

What is a loved brand and what are the advantages?

Loved brands create strong emotional bonds with their customers, through a set of values and beliefs that customers can identify with and incorporate into their daily lives. In theory, businesses with loved brands have a range of advantages over others, which over time create significant financial benefits.

Business advantages for loved brands

Source: STL Partners

They enable businesses to charge a premium over other competitors as consumers pay less notice to the price of products sold by the loved brand.

  1. Loved brands can charge a premium over other competitors as consumers pay less notice to the price of products sold by the loved brand. Apple iPhones are generally more expensive than competitors’ phones with similar feature sets. However, many Apple customers remain loyal with the status of owning the latest iPhone outweighing the additional cost.
  2. The emotional bonds with loved brands can become so robust that their customers do not consider their competitors and forcefully defend the brand. Customers are even willing to forgive the brand for making some mistakes.In 2010, Ferrari recalled more than one thousand Italia 458 cars after reports that a design fault could cause them to catch fire.Despite the obvious negative publicity, which would have had a catastrophic consequence on many manufacturers, Ferrari’s strong emotional connection with its customers protected their position in the luxury car market.
  3. Customers become valuable promotors of loved brands on their social networks, pushing the benefits and encouraging others to join. Tesla provides a great illustration of this advantage, where many of the customers are not only delighted with their new electric vehicle, but they are also strong advocates in persuading their friends and family to purchase a Tesla for themselves.
  4. Loved brands attract the best talent, which helps the business to sustain its success.

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Table of Contents

  • Executive Summary
  • Loved brands
    • Why should telcos care about being a ‘loved brand’?
    • What is a loved brand and what are the advantages?
  • Challenges for telcos in being a loved brand
    • How are telcos viewed by their customers?
    • Why do telcos find it hard to be loved?
  • Common telco strategies that have had limited success to date
    • Focus on having the best network
    • Offering the lowest prices in the market
    • Differentiating on customer relationship
    • Offering content bundles
    • Launching new service innovation and diversification strategies
  • What strategies could telcos adopt to succeed going forward?
  • Case study 1: TELUS brand positioning
  • Case study 2: o2 Priority Moments
  • Case study 3: MTN – sustainable economic value
  • Case study 4: Telstra Health
  • Deep dive: What learnings can be drawn from successful strategies adopted by Orange
    • What has Orange done?
    • What has been the impact on Orange’s results?
    • How has strategy contributed to Orange being a loved brand?
    • What lessons are there for other operators?
  • How do others develop and sustain “the love”?
  • Recommendations for being a loved brand in the new era for telecoms
  • Index

Related research


Metaverse and VR to drive traffic growth

If you take a loose definition, the Metaverse is already generating a lot of traffic. Gaming generated 5.67% of IP traffic globally in 2021, according to network performance monitoring company Sandvine. Much of that will involve gamers interacting with each other in virtual worlds, such as that in the popular game Fortnite. The vast majority of this traffic has nothing to do with VR – people typically play these games using a TV, headphones and a games console.

We think the intensity of VR and individuals’ reluctance to cut themselves off from the real world will limit usage. Even by 2032, one hour a day of VR usage per adult could be the average consumption in developed markets. But visits to the Metaverse through conventional screens will also drive traffic growth.

STL Partners hasn’t attempted to model traffic levels 10 years from now, as there are too many uncertainties, particularly with respect to the business models and what consumers will be prepared to pay for. If telcos don’t have sufficient incentives to invest, then traffic levels could be limited by congestion, particularly during peak periods. But we have estimated that in developed markets, such as the U.S., VR could generate about 13% of total traffic by 2025 (compared to about 10% for conventional gaming traffic).

IP traffic in the U.S.

Source: STL Partners analysis

The VR forecasts shown in the figure above are based on fairly conservative assumptions. For example, we estimate that 10% of Americans (36 million people) were active users of VR in 2021. That figure is based primarily on the ARtillery survey – we have estimated that about 18 million U.S. households are actively using VR (since 28 million have tried it), and we assume an average of two active users per household. Note, an active U.S. user base of 36 million is well below the eMarketer estimate of 61.5 million, but well above an estimate that would be derived from the Omdia data. If we assume about half of the active VR headsets tracked by Omdia are in the U.S., that would point to an active U.S. user base of around 25 million.

STL Partners anticipates that penetration of VR gaming (the most popular use case) will rise to 21% in 2025. We have conservatively assumed that the incremental data traffic per VR gamer per month will be 190GB per month in 2025. That figure is based on the belief that many people will only want to play VR games for short bursts – maybe as little as 10 minutes at a time – because they won’t be comfortable cutting themselves off completely from their surroundings for any longer.

But we are more bullish about educational/training/design use cases for VR. By 2025, we have assumed 25% of the U.S. population will be using VR for this purpose at least once a month – we think employers will make use of VR to show staff new product and service concepts, while also teaching them how to operate new machinery or products. Some educational establishments will also begin to use VR to train medics, engineers and technicians. We think these kinds of use cases could be generating as much as 60GB per active user per month by 2025 in the U.S.

In the medium to long-term, we also think VR is likely to become a mass-market medium for consuming live concerts and sports events, as well as some movies and documentaries. Implemented well, a live VR application could give the user the sense that they are actually at a live football match or rock concert. Although it will likely go through a series of fits and starts over the next decade, VR should ultimately transform the entertainment industry in the way its proponents hope.

For more details please see our report The three telco metaverse strategies

STL Partners related reports:

MWC 2022 – 10 Observations

SK Telecom Stand at MWC 2022 – STL Partners

GSMA’s Mobile World Congress – MWC 2022 revealed a subtle but significant shift taking place in the telco industry, showing how the market’s need is changing to ‘connecting technologies’ rather than ‘connectivity’. This has deep implications for the industry and telcos in particular.

Here are 10 observations the STL Partners’ research team came across as they traversed the halls of the Fira Gran Via Exhibition Centre, Barcelona at MWC 2022. A full overview and analysis of the event is available in our report: MWC 2022: Sensing the winds of change

1. CAMARA, the Telco Global API Alliance

Deutsche Telekom exhibited CAMARA, a new Telco Global API Alliance, which includes many leading telcos such as AT&T, Vodafone, Telefónica and Orange, as well as technology players such as Ericsson, Google Cloud and Microsoft. DT was at pains to demonstrate that it had learned from past mistakes, emphasising the inclusion of a wide range of partners – beyond just operators. Its first API came quickly to market within six months of establishing the alliance. The “Quality-on-Demand” API prioritises data packets to ensure high reliability and stability. One proof of concept (PoC) in Munich is enabling BMW to deliver Automated Valet Parking, where a BMW driver can leave their car at the entrance to a parking lot and the car drives autonomously to an available parking spot.

2. Becoming better partners

Operator’s discussed how to partner better, both on the network technology side as operations move to the cloud, and with start-ups, content and industry specific service providers to build and expand new services. Some operators expressed their wish to kill off request for proposals (RFPs) explaining how they can limit the scope of what can be achieved in a partnership, while also taking away from the customer outcome as the priority of the partnership. Some expressed instead a need to shift away from narrow partnerships with a specific focus, to more broad ranging ones that covering multiple areas across both B2C and B2B. 

3. Metaverse

It didn’t take long to find the Metaverse at MWC 2022. As the buzzword de jour, it was pretty much everywhere, often accompanied by NFTs – non-fungible tokens or certified digital goods. MTN, SK Telecom and Telefónica were among the telcos talking up the Metaverse. MTN Group, for example, claimed to be first African company to enter the Metaverse by purchasing land in Africarare while SK Telecom presented its ifland social VR and virtual meet-up metaverse platform as part of its “4D Metaverse” exhibition which also demonstrated future urban air mobility transportation.  There was surprisingly little discussion about the one thing that will determine whether these concepts fly and flop – trust. Neeraj Roy, founder of Hungama Digital Media conveyed that it will be critical for “the seven big tech companies who’ve all sort of announced their plans of the Metaverse” to ensure their creations are interoperable – it ought to be a single Metaverse. If not, people won’t be able to move their digital identities and assets from one platform to another, limiting the usefulness of the whole concept. 

4. AR and VR Applications

Metaverse and VR applications were popular throughout the show highlighting an emerging ecosystem of VR/AR and 3D developers seeking to build metaverse applications for both consumer, enterprise and government (education). VR for enterprise solutions included facilitating company meetings, sales and marketing of products as well as company training. Meanwhile Korea Telekom (KT) also showcased its developmental K-pop dance coaching smartphone app called “KT Real Dance” which features KT video-based AI capabilities. Users dance to a virtual dance instructor displayed on their phone. 

5. Video and AI 

SKT showcased its camera and vision AI service which offers real-time safety applications for enterprise and smart city by analysing and processing live video in the cloud to monitor real-time human activity and provide alerts in cases such as patient falls in hospital settings, driver behaviour monitoring to detect when drivers’ heads drop as they are falling asleep and social distancing regulations. The camera and vision AI service is part of SKT’s efforts to enter the era of hyper connected intelligence connecting people, things and society. 

6. Sustainability

Operators such as Deutsche Telekom and Vodafone showcased their sustainability efforts which included Deutsche Telekom’s Fairphone 4, a modular 5G device with interchangeable parts that enable easy repairs and increase the overall lifetime of the device – which has a guaranteed service life of five years. Vodafone also highlighted that where customers hold on to their phone for an additional year, the device’s carbon lifetime impact is reduced by 29%. At MWC 2022, Vodafone announced its circular economy plan for extending the lifetime of devices and encourage reuse and recycling. 

7. Heavy and highly physical industry emphasis

There was a new emphasis on heavy and highly physical industries: ports, airports, mining, manufacturing, construction, energy, logistics and healthcare for example. In the next ten years STL Partners believes the efficiency and productivity issues of these businesses must be addressed. To reach sustainability and carbon goals anywhere near net-zero, the profile of emissions, waste and efficiency in these businesses must be radically improved. There were a plethora of examples and use cases on show, widely varying in quality and depth, but nonetheless demonstrating what can and is being done.

8. Telco cloud

Operators such as Telefónica outlined their progress in Open RAN deployment citing its four main markets: Spain, UK, Germany and Brazil where the operator is in its last phase of its pilot programmes. The operator indicated that carrying out interoperability testing (12 weeks minimum) is a timely exercise and that due to high integration costs, open RAN as of now is more, not less, expensive, than legacy RAN. Meanwhile, Dish Network’s Marc Rouanne spoke enthusiastically of the operator’s cloud native standalone core and open RAN architecture that delivered an all software, fully autonomous, self-healing network. Having outsourced all its cloud operation to AWS in 2020, Dish’s network architecture team consists of fewer than 20 people. 

9. Further Analytics, AI and automation use cases

Spirent, with IBM and Palo Alto Networks, demoed a slice management solution with integrated security. Spirent’s active assurance product emulates security attacks both at activation and on an ongoing basis. It also, provides assurance for validation of initial end-to-end provisioning and any further scaling by IBM Cloud Pak. Lastly, the Spirent solution emulates traffic loads that trigger faults to identify the fault, apply impact policy and automatically trigger remediation to the orchestrator.  

Nokia demoed the use of its Network Data and Analytics Function (NWDAF) product within the telco ecosystem. Nokia discussed the ability to share network insights with an ecosystem of partners; allowing them to understand real-time quality of experience and past trends. It also provides predictive analytics from the NWDAF data to allow simple controls for the partners such as spinning up new slices or traffic rerouting when future issues were expected. 

10. Xiaomi AIoT and Huawei

Xiaomi showcased a range of IoT consumer electronics, (some) with artificial intelligence (marketed as AIoT), including its popular electronic scooters. A representative of the Chinese electronics manufacturer highlighted its three-pronged strategy focuses on growing smart home, smartphone and its retail footprint (stores and telesales). The company has experienced increased demand for its smartphones, particularly from customers who were previously Huawei device owners. Huawei mobile services such as Petal Search, Petal Maps, the Huawei App Gallery (App Store) and Huawei Ads was a reminder to the removal of Google’s Android Apps and services from its devices. 

Live events: An opportunity for telcos

For telcos, live events present specific challenges and opportunities. Providing millions of people with high quality images and audio simultaneously can soak up large amounts of bandwidth on networks, forcing telcos to invest in additional capacity. Yet, it should be feasible to make a return on that investment: live events are an enormously popular form of entertainment on which people around the world are prepared to spend vast sums of money.

New technologies can be used to enhance live events, enabling many more people to enjoy both the immediacy and the interactivity of the event, while increasing immersion. The combination of low-cost high definition cameras and microphones, high-speed connectivity and artificial intelligence are set to dramatically improve the experience of sports, concerts and talent shows.

The most obvious advance is the ability to stream very high-definition video from multiple angles, giving the viewer the opportunity to watch the action in a more personalised and immersive manner. Added to this, artificial intelligence (AI) can be used to help automate the production and editing of this footage. For example, image recognition can be used to enable football fans to track the movements of their favourite player, automatically switching between camera angles as appropriate. Similarly, image recognition solutions are increasingly being used to support referees and judges by automatically detecting infringements in real-time.

At the same time, AI can also be used to enable real-time analysis of live action, as it unfolds. In a game of football, for example, AI can be used to show how the formation of a team changes during attack and defence or the predominant style of play of individual players. That data can also be used to enable bookmakers to offer spectators more precise odds to support in-game gambling. Real-time footage, underpinned by low latency connectivity, is a key enabler of in-game betting and in-event competitions, such as quiz questions that spectators need to answer in a short window of time or head-to-head contests between viewers. In a similar vein, low latency connectivity can support in-event messaging and social media by ensuring everyone is viewing the same action at the same time.

Telcos have many of the key technological enablers required to deliver such enhancements to live entertainment. They could and should, of course, be in pole position to provide very high-speed connectivity to the event venue. They can also provide services such as digital identification/authentication (via a one-time password in a SMS message, the Mobile Connect specification or another mechanism for matching a mobile number to a specific individual) to prevent ticket fraud, authenticate access to VIP or member areas in a venue and more.

Telcos could also provide supplementary services, such as wireless connectivity (using either Wi-Fi 6 or private 5G) within the event venue and data processing/analytics at the edge of the network. Moreover, telcos can support ticketing and in-venue payments, via carrier billing or another digital payments offering.

In the professional entertainment market, the live events opportunity is a B2B2C play: Most of the services would be provided to an event organiser/broadcaster, rather than direct to consumers. However, there is a potential direct-to-consumer (B2C) opportunity too. The table below highlights B2C services for amateur events, and the enablers that telcos could leverage to support these.

Potential telco live events services for consumers

Source: STL Partners

Some telcos already sell high definition televisions and other kit, such as virtual reality headsets to consumers. Live events services such as the above would not be out of place among them.

Hundreds of millions of people around the world participate in amateur sports, drama and concert performances. These events can be of interest to hundreds of people who have friends or relatives among the participants, as well as the athletes, performers and musicians themselves. While amateurs won’t be able to afford to employ dozens of 360-degree cameras and microphones, many could deploy two high definition cameras, such as those sold by Danish start-up Veo. Its solution is comprised of a single unit housing two 4K cameras pointing in different directions. The cameras can simultaneously film both halves of a pitch or court, without the need for a camera operator. Additionally Veo uses artificial intelligence to track the ball and produce footage of the game that follows the action. The current model costs £700 in the UK and US$800 in the U.S.. The solution is currently being used by more than 6,200 clubs.

  • Veo charges a monthly subscription fee of £36 to buyers of its cameras, which gives them unlimited access to the Veo Editor, unlimited storage of recordings and the ability to download highlights. There are volume discounts, but that subscription fee represents a major financial commitment for an amateur sports team (on top of the up-front price of the camera), suggesting the Veo is primarily aimed at serious clubs (youth academies and adults playing in competitive leagues).
  • A team can also pay an additional £10 a month for Veo Analytics service, which uses AI to create heat-maps and other stats about the game.
  • Live streaming functionality carries a £13 a month charge, and clubs will need to provide their own SIM card and data plans, if Wi-Fi coverage isn’t good enough.

If live streaming of high definition videos of amateur events becomes commonplace, it could generate a significant volume of traffic for mobile operators. However, this is not expected to be a huge opportunity in the near term, as smaller amateur events are unlikely to be streamed because there won’t be sufficient interest to justify the additional hassle and expense. In cases where an amateur event is live streamed, there may also be demand for instant replays, statistics and highlights, all of which could be generated by AI. Over time, Veo and similar systems may even be able to provide a referee with an instant replay on their smartphone so they can check a decision.

As with professional event organisers, amateur clubs and societies may wish to run competitions around events and facilitate live chat among their distributed fan base.

BT is an example of an operator that is testing the live events market. In April 2021, BT announced that it had connected 70 grassroots football clubs across the UK with broadband/Wi-Fi, as part of a new initiative. The telco said it planned to connect 100 clubs by the end of the summer. The connected clubs are reported to be using the Wi-Fi for live streaming of matches, setting up contactless payments and guest Wi-Fi. As things stand, BT is providing the service on a pro bono basis: the telco is the lead partner with each of the four home nation football associations – The FA, Scottish FA, Irish FA and FA of Wales.

For more detail please see our report Telco plays in live entertainment.

AI and automation priorities in customer care since the pandemic

This January 2022, STL Partners has updated its 2020 report A3 for telcos: Mapping the financial value, published in May 2020, which estimated the financial value of A3 (analytics, artificial intelligence and automation) through bottom up analysis of potential capex/opex savings or revenue uplift from integrating A3 into 150+ processes across a telco’s core areas such as:

  1. Networks and operations – BSS, OSS and networks;
  2. Customer channels – contact centre and digital channels, retail;
  3. Sales and marketing – up-sell, stimulation, CX and retention.

In terms of contact centre and digital channels…

A3 is used to tackle four types of problem:

  1. It improves the understanding of both customer and agent needs. For example, ML (machine learning) is used in segmentation and to trigger activities to allow next-best-offers (eg. a discount on insurance if the customer has just purchased a new handset from an agent). It also includes the use of sentiment and text analysis to monitoring agent quality.
  2. Understanding customer experience through the use of analytics and ML to collect and understand the large volumes of telco data.
  3. Understanding customer problems – both those immediately occurring and those expected to happen in future – through analytics and ML to understand the root cause, predict what might happen in future and prescribe either the best reactive or proactive action to be taken.
  4. All types of automation requirements

Our graphic summarises how the pandemic has affected key A3 priorities for telcos since 2020

Source: STL Partners

  • Case management includes use of RPA (Robotic process automation) and some ML to assign tickets and manage the process. A little more financial value has been assigned to the automation of the agent desktop as more case studies have emerged. However, in general A3 uses in this area are simple automation or analytics so account for a small proportion of savings.
  • Issue resolution is a related area and includes use of A3 to personalise offers or best-next-actions. These use cases are typically built around case management, workflow management and knowledge management and include a variety of personalisation capabilities – such as best next offer or action, problem diagnostics, proactive engagement and contextual routing.
  • Contact centre infrastructure has had a small uplift in its financial value due to new uses cases around call recording. Although, most of the value continues to come from the addition of A3 into IVR containment, where the financial benefit has been well understood over the last couple of years.
  • CX management: in recent research we highlighted that customer journey management will become more important as product sets increase in complexity with 5G.
    • Anecdotally, customer journey management tools haven’t always provided the expected utility for telcos, being difficult to use and lacking robust data feeds. However, vendors in this space are beginning to demonstrate new case studies.
    • A3 is increasingly used within the tools to improve data management, provide sentiment and text analysis to improve customer understanding and voice of the customer. They are also leveraging ML to improve customer journey management.

* The update to this research shows a market just beginning to mature and the financial model created in 2020 is holding up well. The underlying values from revenue uplift or capex/opex decreases have shifted up and down, but without radical change. The value is measured on an annual basis in dollar terms and as a proportion of total revenue for an “average telecoms operator”.

A role for telcos in public safety

The pandemic, environmental concerns and increasing incidence of natural disasters and social unrest are serving to focus public attention on what can be done to preserve health and ensure the safety of people and property going forward. STL Partners supports the position that telecoms companies are strongly placed to help address these concerns. The vision is that telcos can connect large numbers and types of sensors to monitor different events in real-time. Telcos can harness the data collected by these sensors, cameras and other monitors, combine it with data already captured by mobile networks (e.g. subscriber location) and thereby alert organisations and individuals to imminent threats to their health and safety.

Public safety solutions now

Telecommunications providers are already involved in solutions of this kind:

  • KT Corp. is involved in Air Map Korea, which collects data from public telephone booths, telecom poles, and base stations nationwide to provide air pollution information through an app, as well as other service channels such as GiGA Genie and Olleh TV.
  • LG Uplus offers a consumer proposition (in partnership with Weather I) leveraging a small device to measure fine dust, temperature, and humidity indoors in order to provide the user with ventilation advice.
  • BT will integrate Everimpact’s climate monitoring system into next generation Street Hub units (i.e. telephone box replacements) in order to combine Everimpact’s satellite data and AI technology with air quality and CO2 data (collected via BT sensors) to provide local councils with the ability to track emissions.
  • IQ FireWatch, which uses AI and connected cameras to detect fires both visually and through heat disturbances, is being deployed in the Napa Valley by Illuminations Technologies – a relative of a large private telecommunications infrastructure provider.
  • ShakeAlert is working with Google and others (public and private mass alert system operators and cellular carriers) to send earthquake alerts to the Android operating system in smartphones in California (Google has also begun using accelerometers in Android phones to detect tremors).
  • The South Korean government has used a combination of electronic transaction data, mobile phone location logs, and surveillance camera footage to track (and publish) the movements of people who tested positive for Covid-19.
  • Magenta Telecom (Austria) is trialling the use of drones for search and rescue missions in Vienna, where 200 people a year fall into the Danube River.

Our report, How telcos can make the world a safer place, provides further detail on these solutions, and more. It considers opportunities for telcos to use data from connected devices in conjunction with data from its networks to tackle health and safety issues. It looks at who telcos are partnering with in trials as well as actual solutions and highlights prospective business models and the potential revenue streams that could result. In theory, at least, individuals, organisations, insurers and governments should be prepared to pay for systems and solutions that help protect them against serious threats to health and safety, such as infectious diseases, pollution and wildfires. In practice, it can be more difficult to sell systems that prevent an often-nebulous negative impact, rather than generate a clear positive benefit.

For more insights on the consumer opportunity, go to Recharging consumer revenues.

Where to use A3 for customer experience improvements

A3 (analytics, automation and AI) can be used to improve the customer experience and contribute financial value to telcos. Different types of A3 technologies are more or less important for enhancing different elements of customer experience. For example, analytics and machine learning (ML) can help to make sense of complex data, providing  insights into customer behaviour, preferences and experiences to increase customer understanding, while the use of bots and intelligence can remove routine work, speed up processes and increase quality. We identify the six main elements of customer experience below, highlighting areas where A3 can contribute meaningful value, across different functions.

A3 Customer experience

Source: STL Partners, Charlotte Patrick Consult

Four main themes for using A3 to to improve customer experience

A3 applications can be classified into four themes, as indicated in the diagram:

  1. Customer journey team: Telco teams that focus on individual customers could be equipped with suitable tools to understand and act on their issues. In the diagram, value-adding activity includes the addition of more machine learning to improve data management, the use of various AI techniques (such as sentiment and text analysis) to improve customer understanding and voice of the customer, and the use of ML to improve customer journey management tools.
  2. Automation: This is a broad category whereby automation can be used to speed up processes and transactions and improve accuracy, positively influencing customer experience.
  3. Personalisation: Another broad category which can be sub-divided further into two application areas, namely tools for marketing which allow more personalised recommendations, offers and actions (referred to as a “personalisation engine” in the diagram above) and tools for customer service, i.e. for personalisation of customer interactions in channels (the “customer engagement centre” above).
  4. AI: A collection of nascent tools which can solve specific customer experience issues and can provide better customer experiences in particular situations.

Telco progress on A3 for better customer experience

While telcos have made some progress in the application of A3 to improve customer experience, more could be done:

  • Analytics is commonplace for understanding the customer experience, but there is a delay in the application of ML. ML requires good quality data which can be difficult to obtain, particularly if it has to come from multiple channels. ML usage for customer experience across the first three themes is more limited than analytics usage.
  • In the early days of customer journey software (for understanding customer experience generally, rather than for understanding customer journeys across digital commerce), telcos often struggled to make good use of the insight provided, because it wasn’t understood by all teams which needed to use the product. Solutions to this issue include:
    • The requirement for product management roles and teams to assess particular journeys to ensure that there is an expert able to interpret the results and act on them
    • Continued work within these roles to increase the accuracy and relevancy of the customer journey maps created
    • A mix of technology and organisational change to allow access, use and sharing of journey maps
    • Improvement in data, processes and algorithms to create better insight. Telcos should especially focus on the use of ML in understanding patterns across very large data sets, where it will help to expose previously hidden issues.
  • So far telcos have only made limited progress in introducing additional data types from the network and OSS to enable views of experience with network, services, devices and applications to improve understanding of customer journey and personalisation of experiences in channel. There are a variety of vendors from the OSS space which have such products, but they are often a slow sell due to the need for the contact centre and other users to understand the benefits.
  • The box labelled “proactive technologies” on the diagram includes all solutions which use some form of personalisation to deliver proactive care or messaging to customers. For various reasons, it has been difficult to deliver certain types of troubleshooting for customers on-device. It is likely that the best solution to this will be to implement a mix of small proactive care solutions for particular customer issues and to focus on what can be easily delivered via new “assisted care” channels (such as messaging). For example, the pandemic has sparked the creation of services which connect technicians with broadband customers via video chat; the technicians can then use augmented reality (AR) to guide customers through device set-ups or resolve issues.

For more detail on how A3 can help telcos to improve customer experience, please see our report A3 in customer experience: Possibilities for personalisation

Related Research:

How 5G can support new concepts in public transport

The world’s transport systems could become a major consumer of 5G services, to support both remote monitoring and control of vehicles.

5G transport services


Alongside the road closures, bike sharing and electrification, another potentially even more significant trend is underway – the lines between public and private transport are beginning to blur to make more efficient use of the available space and people’s time. This trend is apparent in the way in which Google Maps’ directions features now blends ride-hailing and public transport services.

There is a widespread view among transport experts that most people will ultimately want to buy mobility-as-a-service (MaaS) – the notion that an individual should pay-as-they-go to access multiple modes of transport. Analogous to cloud computing, rather than spending a large amount of money upfront, the buyer would just pay for what they need, as and when they need it. As well as potentially being more cost-effective and flexible, mobility-as-a-service could discourage solo journeys in a car, by making the cost of such a choice more transparent. This is a key area of focus for Uber, which says it is partnering with more than 50 governments to “extend the reach of public transit” and develop on-demand services.

Different individuals are prepared to make different trade-offs. Whereas one person may regard a 15-minute walk to a train station as acceptable, another may regard that as an insurmountable obstacle. Recognising that, the ideal transport system will be flexible, giving people a choice for each journey that fully reflects the financial and environmental costs of the different options. As working patterns change in the wake of the pandemic, people are less likely to go into an office five days a week. That makes buying a season ticket for train journeys (or a vehicle specifically for commuting) less appealing.

At the same time, there are many people who still have to travel to work every day and may value a subscription that will allow them unlimited usage of local services, such as buses, trams, shared bikes and scooters, and local trains. The subscription could also include a set number of taxi journeys a month to cover those occasions when public transport is delayed or the passenger has missed a train or bus.

Our report How telcos can provide a tonic for transport examines the role of connectivity in other potentially-disruptive transport propositions, such as remotely controlled hire cars, passenger drones and flying cars, which could emerge over the next decade. It builds on previous STL Partners research including:

5G-aliser: Can telcos launch new services without standalone 5G?

5G-aliser: Can telcos launch new services without standalone 5G?

This quarter we drop two of our wildcard factors in favour of two newcomers, and discuss how telcos are developing their 5G services ahead of the launch of standalone 5G cores.

New factors on the scorecard

  • This quarter we dropped COVID-19 and 5G conspiracy theories in the wildcards factors, as these have largely stabilised and are less relevant than newly emerging ones;
  • The first new addition is the IT / billing stack for advanced communications;
  • 6G is the second new factor;
  • We also retitled “US/China tradewar and other geopolitical issues” to Geopolitical tensions, which better reflects the multi-faceted regional tensions affecting 5G development, ranging from security to competitive dynamics in network equipment and software, as well as net neutrality.

5G-aliser-stl-partners-July 2021

Over a year into tracking 5G development, the bottom line remains that the disruptive and innovative elements of 5G are not possible without a standalone core and reliable indoor coverage. This is reflected in the results of the 5G-aliser analysis, where supply has increased from 10% to 19% y-o-y to July 2021, but demand has grown more slowly from 10% to 16%, mostly due to progress in factors that affect both supply and demand, rather than from purely demand-side factors (shown in red).

Another key enabling factor is implementation of next generation billing IT stacks that can handle much more dynamic, flexible and modular connectivity services. For example, leading Asian operator we spoke with is leveraging its 5G network to offer premium connectivity services, including a gaming optimiser solution for consumers, but its billing platform is the main roadblock to being able to commercialise some of them.

Although MWC didn’t bring too many real industry breakthrough announcements, TelcoDR’s $100mn investment in upstart billing platform Totogi did make a splash and is illustrative of the growing importance of the billing IT stack to monetisation of 5G services. STL Partners’ analysts are sceptical that an AI-infused billing platform that can adjust rates in accordance to a telco’s local market dynamics will raise ARPUs significantly, but the ability to bill for services in a more flexible and modular way will soon be table stakes for telcos.

Until the technology matures, 5G services will remain limited

Telcos’ ideas of what they want to do are starting to crystalise, but actual 5G services beyond cloud, early edge, and FWA are not convincing.

Key points of consideration in services are:

  • AR/VR: Some telcos are making bets here, experimenting with some initiatives, but nothing at scale. Orange, NTT Docomo, China Mobile are the biggest experimenters, while BT also launched AR features in its sports app.
  • 5G devices: There is a risk that semi-conductor chip shortages will impact some devices. This could also hit high value devices such as smartphones as well as lower cost IoT sensors and V2X communications. Last week (July 27) Apple’s CEO noted “supply constraints” will affect iPhone and iPad sales.
    • Aside from the chip shortage, the other challenge with 5G devices is that few (or none) of them are compatible with all spectrum bands
  • Moving from premium to mass market: Some telcos (e.g. Telstra – see STL Partners’ profile) have taken a premium approach to 5G services, but don’t have a clear strategy for how to adapt from a premium to a mass market strategy for consumers.

Addressing the infrastructure and skills costs

Finally, and linking back to the question of 5G standalone cores and network coverage, many movements in the industry are fundamentally about overcoming infrastructure costs and skills shortages.

  • Huawei, Ericsson and Nokia are all making noise about their sub-20kg 5G base stations. This is important because the lower weight means that a single engineer can install the base station instead of needing to hire a crane.
  • AT&T’s deal with Microsoft and DISH’s deal with AWS – both are about how to address the cost of network technology development at scale. AT&T has been a huge proponent of a DIY approach to developing its NFV / SDN technology. However, its deal with Microsoft suggests that it was reaching an inflection point, where it is potentially beginning to compete with major vendors. While it has built up a very large software team, realistically it can’t compete with global vendors? By offloading its Network Cloud technology to Microsoft, AT&T is securing much more significant funds and skills to scale its work. The ultimate question is that if AT&T judges that it cannot truly be its own software player, is it viable for any other telco?

Commercial 5G: Factors influencing the approach

5G monetisation

The commercial 5G services of 5G pioneers SK Telecom, Verizon and Telstra focused on 5G-ready versions of mobile and data plans across consumer and business segments, with SK Telecom the only operator promoting 5G-specific plans and applications early on. Some are now moving beyond the premium propositions that targeted early adopters/heavy data users with speed and data generosity, towards a mainstream audience as device pricing has come down and coverage increased. Efforts to secure new revenues have centred around FWA, Cloud/edge computing and private network services (skewed towards Enterprise).

Multiple factors are influence the approach that operators can take in terms of 5G monetisation: some constrain the choice of approach, while others enable new options. These factors can shift in intensity and change over time.

SKT was initially constrained by device availability and cost (it offers 5G-specific plans which would be of no interest to customers without a device). It offered generous subsidies to overcome this, but is now facing government pressure over those subsidies, as well as plan pricing as government wishes to democratise 5G access further. The South Korean 5G market is also highly competitive, which further impacts pricing possibilities. SKT is choosing to leverage several commercial enablers in order to extract revenue from its 5G network investments. Examples include providing unique 5G-optimised content (e.g. it has its own studio to create mixed-reality content), using non-communications specific capabilities (AI, robotics, cloud) to deliver 5G enterprise solutions and packaging up compelling 5G-inclusive propositions to address identified use cases.

Verizon’s choice of 5G spectrum constrained its commercial approach, particularly due to mmWave’s range and propagation issues. This has resulted in the sacrifice of some of its first mover advantage to T-Mobile, whose 5G mid band coverage is now wider. Verizon offers a “multi-band” 5G proposition, which has the potential to confuse customers as to the value of 5G (particularly versus its 4G network). On the plus side, it does offer a range of devices to improve 5G affordability and is leveraging unlimited data allowances and quality of service advantages in its 5G-inclusive propositions (particularly for 5G Ultra wideband offerings). It is also offering broad propositions for use cases including fixed wireless access and 5G Edge (it has initiated commercialisation of a 5G-inclusive IoT solution, venue/stadium specific services and private 5G, though these do not appear to be mainstream in the US yet).

Factors that confound 5G monetisation at Telstra include network coverage (5G coverage lags that of 4G) and market competition (competitors include 5G in all plans, while Telstra does not). Telstra has chosen to leverage its 5G leadership to boost the perceptions and performance of its network as a whole. Many of its propositions are not singled out as 5G services, though they may depend on the cost efficiency, capacity and performance improvements that are delivered by 5G (e.g. Network Optimisation Services, such as the Adaptive Mobility Accelerator). Telstra is focused on ensuring customer 5G readiness (it offers a wide range of devices) and 5G network development to maintain network leadership. It is building its understanding of 5G capabilities with new services and laying the foundations for new business models. Adjacent capabilities (provided by Telstra Purple) are a further monetisation enabler.

Operators are working to minimise the impact of constraining factors (e.g. extending device ranges, securing additional spectrum) whilst building/leveraging the enablers to provide a 5G monetisation toolkit. Their commercial 5G journeys continue.

See our in-depth case studies on commercial 5G

Achieving eCommerce best practice through data advancements

There are clear benefits to operators who successfully implement A3 (analytics, artificial intelligence and automation) within their organisation.

  • Analytics: Collecting and analysing data to drive better decision-making
  • Artificial intelligence: Using computing capabilities to perform human cognitive functions
  • Automation: Replacing or supporting activities that require human input with machines

This is evident in the industry’s investment in multiple telco domains, albeit with varying levels of maturity. Example use cases include:

  • Personalised marketing and call centre augmentation in sales and marketing
  • Customer value management and troubleshooting in customer experience
  • Infrastructre planning and predictive maintenance in network planning and operations
  • AI-as-a-service and product development and augmentation in service innovation
  • Supply chain management and SLA risk modelling in other operations

For more information, check our report A3 for telcos: Mapping the financial value


Commercial 5G at Telstra

Telstra’s 5G commercial approach involves propositions in each of the highlighted categories below:

Telstra commercial 5G

Given that four of the top five key purchase criteria across all Australian telco customer segments are network-related (i.e., coverage, speed, reliability and security), Telstra strives to be the market’s network leader. It views its early and continuing investment in 5G as enabling it to stay ahead of customer expectations as they evolve.

Network leadership has been the foundation of its commercial approach to 5G for customers to date. Due to the lack of early and obvious 5G use cases and less than ubiquitous coverage, Telstra has refrained from singling out 5G-specific propositions, emphasizing its network superiority as a whole.

From a consumer perspective, Telstra monetises 5G by promoting 5G-ready mobile and data plans to more premium customers (5G is not available on prepay or sub-brands). It also offers fixed wireless access services to a targeted customer set. Additionally, Telstra does not subsidise 5G devices and receives a nominal revenue contribution from device sales.

Its small business approach broadly reflects that of the consumer, however its enterprise portfolio demonstrates some differences. Telstra’s Adaptive Mobility solution, with mobile, data and enterprise wireless components, allows customers to select and change solution components and service tiers month to month. Tiers of services are defined by size of data allowance and speed caps (while 5G is not specifically called out, plans are marketed as “5G-compatible”).  Telstra has also introduced an Adaptive Mobility Accelerator add-on feature which boosts speed based on available networks (both 4G and 5G).

Telstra’s network-agnostic, flexible approach continues through to its network and technology solutions and managed services, i.e., the Telstra SD-WAN solution, cloud services (including edge computing) and private hybrid networking solutions (favouring consumption-based business models). Additionally, it leverages its technology services provider, Telstra Purple, to create bespoke over-the-top solutions (based on its adjacent expertise, e.g. AI, software development, cloud) that may/may not include 5G.

While Telstra does not currently offer bundled 5G-specific solutions, it is championing the concept of network-aware services facilitated by a modular, adaptable service infrastructure. This should stand it in good stead to develop and deliver new use cases (e.g. those leveraging network slicing) by combining network capabilities in different ways. 5G-specific solutions may be an aspiration going forward.

This July 2021 Report: Telstra’s journey in commercialising 5G examines the market factors that have enabled and constrained Telstra’s 5G commercial approach up to now and identifies lessons in the commercialisation of 5G for operators that are on their own 5G journey.

See our in-depth 5G research and our coverage of 5G monetisation so far:

AI for network-driven customer experience

Although customer-facing teams in marketing and sales have been quicker to adopt AI and automation than network operations teams, there is a growing understanding in telecoms that delivering a good customer experience must start with the network. Achieving this is easier said than done, since getting a full view of an individual customer’s experience of the network depends on bringing together data from potentially hundreds of systems, and then making sense of it. Figuring which metrics are most representative of a customer’s experience and how to combine and present them in an easy-to-understand way for network operations and customer-facing teams is one of the biggest challenges operators are grappling with today. However, it is well worth it – our research into the value of A3 (AI, analytics and automation) for telcos shows that improvement to top level customer experience from using A3 for network service assurance is worth US$27 million annually for the average sized telco.

How O2 is using AI to improve customer experience

O2's network customer experience metric

O2 introduced a single data driven customer experience metric called NCX (network customer experience). By using machine learning techniques to evaluate a customer’s perception of network quality, O2 were able to impact three key areas:

  1. Network operations: NCX supports O2 in network fault management and network optimisation to better invest its resources into improved fault detection, faster root-cause identification, smarter dispatch of engineers into the field.
  2. Network planning and investment efficiency: O2, like its peers, is under pressure to constrain its capex. NCX allows the organisation to take a nuanced view of CX across different parts of the network and determine which should receive investment for largest CX improvement ROI.
  3. Targeted marketing and CX management: The granular information NCX provides about individual customers allows O2 take a more tailored approach to communication. Shift from reactive to proactive has helped create a ‘stickier’ network, increase customer retention and improve upsell opportunities.

Ultimately, implementing a network-driven approach to customer experience management can feed into telcos’ customer-facing channels, enabling them to implement a successful omnichannel strategy.

See our in-depth research on A3 in customer experience


Consumer Internet of Things in 2021

STL’s June 2021 report: Why the consumer IoT is stuck in the slow lane considers the key B2C and B2B2C use cases for Massive IoT technologies – how NB-IoT and LTE-M are evolving and the implications for telcos’ strategies in terms of the consumer Internet of Things.

Despite the pandemic, the IoT continued to expand in 2020. In fact, in some respects, adoption of cellular IoT services is growing faster than expected.  In November 2016, Ericsson forecast 1.5 billion IoT devices with cellular connections by 2022, up from around 400 million IoT at the end of 2016.  However, in November 2020, Ericsson said there would be 1.7 billion cellular IoT connections by the end of that year (out of a total of 12.6 billion IoT connections).

But uptake varies dramatically by region. At the end of 2020, North East Asia will account for 64% of those 1.7 billion cellular IoT connections, according to Ericsson, a figure it believes will increase to 69% by 2026. That forecast reflects the hugely influential role of the Chinese government, which is pushing the country to lead the world in harnessing the IoT, partly to fulfil its strategic ambitions for artificial intelligence (AI) – the IoT collects much of the real-world data required to train machine learning systems.

The faster-than-expected growth is being driven by the use of conventional cellular connectivity for IoT, rather than NB-IoT and LTE-M. In the consumer market, conventional cellular networks are being used to connect consumer IoT devices such as vehicles, wearables (such as the Apple Watch), asset trackers and security cameras.

Market Trends: Cellular IoT connections are growing quickly (numbers in billions)

consumer internet of things

Source: Ericsson Mobility Report, November 2020


One of the primary reasons for using NB-IoT, in particular, is coverage. It has been specifically designed to deliver data connectivity in locations that other technologies fail to reach. In theory, at least, NB-IoT could cover more of the planet than any other wireless technology by riding on the back of existing cellular infrastructure and extending its reach. 

Although most mobile operators publicly back NB-IoT and LTE-M, enthusiasm has waned in some quarters. In March 2020, NTT DoCoMo said it would discontinue the NB-IoT service it launched a year earlier. DoCoMo’s decision may also reflect the fact that devices are increasingly being equipped with both LTE-M and NB-IoT connectivity – chipset and module makers now tend to combine the two technologies in a single solution. 


Although some major European operators, including Vodafone, are vocal advocates of NB-IoT, they tend to focus on the business market, as opposed to the consumer internet of yhings. In May 2021, Vodafone reported €800 million in IoT revenues for the year ending March 31st 2021. It predicted the number of connected devices within the Internet of Things will double by 2025, “driven by continued reductions in the cost of computing components, advances in cross-device operability and software, and the near ubiquity of mobile networks.” At the end of March 2021, Vodafone had more 120 million IoT devices connected to its network, including 33 million connected cars. 

Amazon’s consumer IoT play

Some of the leading Internet players have tacitly recognised that Wi-Fi isn’t ideal for many consumer Internet of Things use cases. Amazon, for example, is now rolling out a neighbourhood connectivity service it calls Sidewalk. A shared mesh wireless network designed to cover residential areas with low bandwidth connectivity, Sidewalk has been launched first in the U.S., where it is free to customers. But end-users do need to contribute up to 500MB of data connectivity per month.

“Massive” consumer Internet of Things use cases

There are a number of potential use cases for Massive IoT in the consumer market:

  • Asset tracking: pets, bikes, scooters, vehicles, keys, wallets, passport, phones, laptops, tablets etc;
  • Vulnerable person tracking: children and the elderly;
  • Health wearables: wristbands, smart watches;
  • Metering and monitoring: power, water, garden;
  • Alarms and security: smoke alarms, carbon monoxide, intrusion;
  • Digital homes: automation of temperature and lighting in line with occupancy.

These opportunities will be influenced by developments in consumer IoT devices.

Download this report to explore the current primary consumer Internet of Things use cases (in-home and out and about) and their key characteristics.

The report builds on previous STL Partners’ research, including LPWA: Which way to go for IoT? and Can telcos create a compelling smart home?

Read more about STL’s IoT research at