Telecom companies have some of the richest, deepest data sets of all industries. Because the business model involves contracting customers to monthly plans or providing pre-pay SIMs which people rarely change, the Telcos understand their customer better than almost all other industries.
You might buy a car once every two or three years, or take a holiday a couple of times per year. That gives the automotive and travel industries a little data about what you like, and what you might buy next time. But Telcos have access to a constant stream of data from your smartphone, set-top TV box and internet connection.
The only industry that gets close to the level of data that Telcos have is Retail. The supermarket loyalty card has revolutionised the retail experience. Anyone who has had a book of vouchers through the post from Tesco, and been delighted that there are special offers on exactly the products they buy frequently, has been touched by this new data-driven approach.
Telcos are in a race to offer 'quad-play'. That is home phone, mobile, broadband and TV... bundled together from one supplier. In UK you can choose from BT, TalkTalk, Virgin or Vodafone. And it's not just the extra revenue they will get from you from each service that interest them, it's your data that is the gold mine they are prospecting for.
So what data do Telcos have on you? Well, the answer is a little disturbing. If you take all four services from, say, BT. Then BT can extract and store your data from each of their systems. Those systems contain records of your calls, your TV viewing habits, your location and your internet activity levels. With a little extra effort, they can extract details of: everything you've watched, live and on-demand; whether you watched the ads or skipped them; what you google and which websites you visit; where you travel frequently and which route you take.
If that wasn't creepy enough, they can pull data together from each of these systems and identify a profile based on other people's behaviour to understand even more about you. The observations that they can make are sometimes based on probability, but the accuracy of the profiling is enough for the Telco to make better decisions on how to keep you as a customer and sell you more services.
Here's a very short list of some of the things they know about you, or could derive from multiple data sets.
Sounds a little scary... right? Well, it's not as bad as it seems. For one thing, the Telco companies are not terribly interested in you. As long as you pay them your monthly fee or top-up regularly, that's their main concern. They might try to sell you some related products like more TV channels, cloud storage or phone insurance. They'll use the data for that. But most of the value in your data is in selling it to other companies.
Just in the TV data which Telcos have access to, there is a revolution underway. TV viewing ratings used to be collected by panels of viewers with special equipment. In UK the BARB panel was around 5,000 households. All the TV ratings were extrapolated from this small group of panelists. Now, every TV box can record every program watched, every button press, every play/pause/record action. All this data is sent back to the Telco in real-time. This gives highly accurate real-time data to share with advertisers, to share with production companies, and to add to all the telephone, mobile and internet data the Telco holds.
The system works so well that leading TV providers are able to insert targeted adverts into your live program feed, which specifically target you as an individual. They know it's you watching, and not your wife or your kids, because the way that you use the remote control buttons is as unique as your fingerprint.
Telcos have a system called DPI (Deep Packet Inspection), which allows them to look inside the IP packets which make up all internet traffic. DPI data shows exactly which web pages you've visited along with time-stamps, details of cookies, usernames (not passwords), and purchases.
So combining this with your viewing behaviour, the Telco can tell a TV advertiser exactly whether their TV advert directly resulted in a visit to their site and a purchase. It's the most information an advertiser has ever had about the effectiveness of their advertising channels. And for that, they pay handsomely. Even basic personal data is worth a few pence per customer in the multi-billion pound data brokerage business. If that customer is in a high earning job, or high spending period of life, that value rockets to around £1. Multiplied by the millions of customers that Telcos have, this represents a tidy earner for the Telcos. And that is yesterday's model. Today's real-time model changes the game.
In India, an insurance company is working with a Telco to give away free life insurance. In a market where only 3% of the population has life cover, there is a huge opportunity. The life insurance company has seen that it can get detailed lifestyle data from the Telco that it previously couldn't find. In poor communities, families don't have regular income, bank accounts, credit cards or even loyalty cards. But they all have a mobile phone. The mobile phone is the only way to get information about this sector of the population.
Of course, the insurance company is betting on a proportion of those taking the free basic life cover to upgrade to a paid life cover. With the mobile phone derived customer data, the insurance company can make accurate cost/benefit analysis on each application for paid cover. Previously the risk was too great and the cost of cover too high. Now, the risk is calculable and the cost can be tailored to the individual.
Telcos are, in general, sensitive to the power they have with all this data. There is often strong governance about what data can be used within the Telco and what can be shared outside the Telco. As the intelligent systems being deployed by Telcos start to use these data sets, your experience with the Telco should improve. They won't post you as much junk mail, or spam you with as many irrelevant offers. They will be able to fix network or device problems before you're even aware of the problem, and they should be able to tailor your service to your needs at a competitive price.
But if that doesn't settle your nerves, there is European legislation coming in 2018, which will allow you to ask any company to delete all the data that it holds about you. Simply and quickly, you will be able to revoke their access to your data. When UK leaves the EU, it's anticipated that we will have similar legislation too.
And if you are very worried about what your data says about you, then I'd advise you to clean up your act. The data reflects your reality. If your reality is such that your data is, at best - embarrassing, and at worse - incriminating, then you only have yourself, and your data, to blame.
You might buy a car once every two or three years, or take a holiday a couple of times per year. That gives the automotive and travel industries a little data about what you like, and what you might buy next time. But Telcos have access to a constant stream of data from your smartphone, set-top TV box and internet connection.
The only industry that gets close to the level of data that Telcos have is Retail. The supermarket loyalty card has revolutionised the retail experience. Anyone who has had a book of vouchers through the post from Tesco, and been delighted that there are special offers on exactly the products they buy frequently, has been touched by this new data-driven approach.
Telcos are in a race to offer 'quad-play'. That is home phone, mobile, broadband and TV... bundled together from one supplier. In UK you can choose from BT, TalkTalk, Virgin or Vodafone. And it's not just the extra revenue they will get from you from each service that interest them, it's your data that is the gold mine they are prospecting for.
So what data do Telcos have on you? Well, the answer is a little disturbing. If you take all four services from, say, BT. Then BT can extract and store your data from each of their systems. Those systems contain records of your calls, your TV viewing habits, your location and your internet activity levels. With a little extra effort, they can extract details of: everything you've watched, live and on-demand; whether you watched the ads or skipped them; what you google and which websites you visit; where you travel frequently and which route you take.
If that wasn't creepy enough, they can pull data together from each of these systems and identify a profile based on other people's behaviour to understand even more about you. The observations that they can make are sometimes based on probability, but the accuracy of the profiling is enough for the Telco to make better decisions on how to keep you as a customer and sell you more services.
Here's a very short list of some of the things they know about you, or could derive from multiple data sets.
Just in the TV data which Telcos have access to, there is a revolution underway. TV viewing ratings used to be collected by panels of viewers with special equipment. In UK the BARB panel was around 5,000 households. All the TV ratings were extrapolated from this small group of panelists. Now, every TV box can record every program watched, every button press, every play/pause/record action. All this data is sent back to the Telco in real-time. This gives highly accurate real-time data to share with advertisers, to share with production companies, and to add to all the telephone, mobile and internet data the Telco holds.
The system works so well that leading TV providers are able to insert targeted adverts into your live program feed, which specifically target you as an individual. They know it's you watching, and not your wife or your kids, because the way that you use the remote control buttons is as unique as your fingerprint.
Telcos have a system called DPI (Deep Packet Inspection), which allows them to look inside the IP packets which make up all internet traffic. DPI data shows exactly which web pages you've visited along with time-stamps, details of cookies, usernames (not passwords), and purchases.
So combining this with your viewing behaviour, the Telco can tell a TV advertiser exactly whether their TV advert directly resulted in a visit to their site and a purchase. It's the most information an advertiser has ever had about the effectiveness of their advertising channels. And for that, they pay handsomely. Even basic personal data is worth a few pence per customer in the multi-billion pound data brokerage business. If that customer is in a high earning job, or high spending period of life, that value rockets to around £1. Multiplied by the millions of customers that Telcos have, this represents a tidy earner for the Telcos. And that is yesterday's model. Today's real-time model changes the game.
In India, an insurance company is working with a Telco to give away free life insurance. In a market where only 3% of the population has life cover, there is a huge opportunity. The life insurance company has seen that it can get detailed lifestyle data from the Telco that it previously couldn't find. In poor communities, families don't have regular income, bank accounts, credit cards or even loyalty cards. But they all have a mobile phone. The mobile phone is the only way to get information about this sector of the population.
Of course, the insurance company is betting on a proportion of those taking the free basic life cover to upgrade to a paid life cover. With the mobile phone derived customer data, the insurance company can make accurate cost/benefit analysis on each application for paid cover. Previously the risk was too great and the cost of cover too high. Now, the risk is calculable and the cost can be tailored to the individual.
Telcos are, in general, sensitive to the power they have with all this data. There is often strong governance about what data can be used within the Telco and what can be shared outside the Telco. As the intelligent systems being deployed by Telcos start to use these data sets, your experience with the Telco should improve. They won't post you as much junk mail, or spam you with as many irrelevant offers. They will be able to fix network or device problems before you're even aware of the problem, and they should be able to tailor your service to your needs at a competitive price.
But if that doesn't settle your nerves, there is European legislation coming in 2018, which will allow you to ask any company to delete all the data that it holds about you. Simply and quickly, you will be able to revoke their access to your data. When UK leaves the EU, it's anticipated that we will have similar legislation too.
And if you are very worried about what your data says about you, then I'd advise you to clean up your act. The data reflects your reality. If your reality is such that your data is, at best - embarrassing, and at worse - incriminating, then you only have yourself, and your data, to blame.
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