The 33rd Annual

International
Symposium on Forecasting
June 23-26
KAIST College of Business
Seoul, South Korea

Big Data Analytics

Adoption in
Telecommunications
Industry : The Korean
Telcos Perspectives
Presented by:
Patricks Oghuma
SMIT Lab- KAIST

Contents

Background and Motivation

Literature Review
Conceptual framework &
Methodology
Findings
Korea Telecom Landscape
Conclusion
2
Presented by SMIT Lab

BIG DATA

Background & Motivation 1/14

BIG DATA

The adoption of smartphones account for 82.5% of all mobile traffic

(Cisco,2012)
90% of traffic on mobile network in the future will be delivered over
the internet as an OTT service (Cisco,2012)
Consumers are becoming hyper connected (IBM,2012)
Using MIM, SNS on mobile device
SMS usage down by 40% and revenue down 28% in one year( Cisco,2012)

Availability of : alternatives ; platform ; ubiquitous BB; generous price plan.

Should Telcos be the next KODAK or Dinosaur?

3
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Background & Motivation 2/14

BIG DATA

New ICT Trend:

Service: Sharing / participation:
It is no longer unidirectional but multidirectional

Content:
Dynamic( Video , intelligence, emotion)

Technology
All IP , Big Data, Cloud
People are experiencing SAMARTIZATION in their everyday lives
Source:
The Human face of Big Data by Rick Smola
The Age of the Platform by Phil Simon
Too Big to ignore: The business of Big Data by Phil Simon
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Background & Motivation 4/14

BIG DATA

Big Data
Data sets whose size is beyond the ability of typical database software tools
to capture, store, manage, and analyze ( McKinsey Global Institute ,2011)
The next frontier for innovation, competition, and productivity(MGI and McKinsey's
Global Institute 2011)

Big Data spans four dimensions: Volume, Velocity, Variety, and Veracity
(Cisco,2012).
Big Data is cultural ,technological and scholarly phenomenon (Danah et al,
2012)
Trends in BD
It is alarmingly increasing in usage (Nielsen, 2011)
Organizations are investing huge amount of resources to
it(IBM,2012; McKinsey & Company) eg Facebook, Google
Competitive advantage: operation optimization ,effective marketing,
better customer experience and new streams of revenue
Big Data is not a business model.
The biggest concern is the pace of innovation.
5
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Background & Motivation 5/14

BIG DATA

Why Big Data for telecoms companies

Saturation of the market
Need to grow revenue
Need to defend the existing revenue
Need to grow new business and protect against churn
Many communication channels are now available
Data usage is growing fast
ARPU is decreasing
Telcos less relevant in the value chain

Data deluge era has come to stay. The telecom ecosystem is unfolding in a
state of chaotic effervescence. Revenues erode and services are
commoditized.
Multifaceted innovation around internet and mobile technology is revealing
rich new gold mines to be exploited- customer data vide BDA.
Issues :
Privacy & Security concerns
6
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Background & Motivation 6/14

BIG DATA

Data is everywhere.
New technologies provide capabilities to store huge data.

Sloan Digital
Sky Survey
(2000)

More data in first

weeks than data
had been collected
in the entire history
of the astronomy
(Cukier, 2010)

Facebook
Web Site
(n.d.)

15 billion uploaded
photos with a
growth rate of 220
million new photos
per week

Sources of Data: social media, video, audio, mobiles, medical

imaging, surveillance, etc.
Presented by SMIT Lab

Background & Motivation 7/14

BIG DATA

Big explosion of data will

continue in the next years.
Big Data is a term related
with this explosion of data.
There is not a concrete
definition of Big Data.

Data sets whose size is beyond the ability of typical database

software tools to capture, store, manage, and analyze
MacKinsey Global Institute (2011)
Presented by SMIT Lab

Background & Motivation 8/14

Features of Big Data

Volume

Velocity

4Vs
Value

Source: DataStax (2011)

Presented by SMIT Lab

Variety

BIG DATA

Importance of Big Data

The huge amount of information
we are creating every day,
through many sources, may
reveal trends or insights in real
time*, giving the chance to
improve decision-making
(Global Pulse 2012).
____________________________________
(*) Real time refers to data that is relevant to a relatively short
period of time, or data that is made available within a timeframe
that allows governments, organizations, or individuals to take a
fast action.

Background & Motivation 9/14

Big Data for Sales Effectiveness

BIG DATA

Big Data for Increase Revenue

31%
New

42%

27%

Existing

Source: Lattice Engines/CSO Insights

(cited in Marketing Charts n.d.)

Around 87% had an increase in sales

effectiveness with Big Data.
Presented by SMIT Lab

Source: Avanade (2012)

Global Survey: Is Big Data Producing Big Returns?

42% increased existing and 31% found

new sources of revenues
10

BACKGROUND & MOTIVATION (10/14)

BIG DATA

Big Data can generate significant financial value across sectors

Source: McKinsey Global Institute Analysis

Presented by SMIT Lab

11

BACKGROUND & MOTIVATION (11/14)

Global ARPU Trend (US$)

BIG DATA

Messaging Trend (Million per day)

Actual Hyper Competitive Environment

OVUM forecasts due to OTT players

Commoditization of traditional
services.

By 2020 telcos will have experienced a

loss of US$ 479 bn in voice revenues.

Other players eating into their

revenues (e.g., Google & Skype).

By 2016 the loss in SMS revenues will

reach US$ 54 bn.

Presented by SMIT Lab

12

BACKGROUND & MOTIVATION (12/14)

BIG DATA

Key Trends Underlying the Telecom Market

Becoming
commodities

Have
alternatives to
Telcos services

Voice &
SMS

Voice,
message,
video
Aggregation &
Fragmentation

Smart
Devices
Users

ARPU

Revenues from
SMS, Voice and
data are
declining.
Telcos
Cannot maintain
revenues and
usage.

Decreasing

Source: IDATE 2012, IE Market Research Corporation 2011, The Korea Economic Daily 2012
Presented by SMIT Lab

13

BACKGROUND & MOTIVATION (13/11)

BIG DATA

In short: Telcos are now dumb pipes for service providers

Telcos
Consumer

1) Telcos need to innovate in new business models and automate processes

To be SMART pipe (Oracle 2012; Ovum 2012)
2) Data is the oil that will fuel Telcos future growth (Ovum 2011)
Presented by SMIT Lab

14

BACKGROUND & MOTIVATION (14/14)

What are the challenges?
Concerns When Using Mobile Apps

BIG DATA

Also, a proper adoption by Telcos is needed

Privacy Laws
EC 95/461995 Directive
Should be followed by all sectors,
including Telcos.
Personal information is defined as
any information relating to an
identified or identifiable natural
person.
Under the Korean law,11731,
everyone has the right to privacy
in their conversations and
messages for mailings and
telecommunication

Presented by SMIT Lab

15

Problem statement

BIG DATA

What can telcos do with the massive set of data which

continue to grow exponentially in their networks and as
their services and revenues are rapidly becoming
Commoditized and Cannibalized and in return their
network get congested by the OTT players.

For fear of
Network Neutrality law
How do telcos remain relevant in a seriously weird business
environment?
Presented by SMIT Lab

16

Way out for Telcos

BIG DATA

Innovation- BDA
Passing through
thick and thin
now due to the
rapid changing
face of
communications.

Co-opetition/
Collaboration
Homegrown OTT serviceJoyn
Become a platform
player

Source: Dundee,2000; Barnett et al.,2000; Wong,2000; Racanelli, 2001 and Ruke et al., 2003

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Literature Review (1/6)

BIG DATA

We integrated literature on:

Big Data

Data
Mining

Churn
Manage.
Presented by SMIT Lab

Lazer et al. (2009); Manovich (2011); Pariser (2011)

Sara Philpot (2010); Danah Boyd et al. (2012)
Frank J. Ohlhorst (2012), Villars et al. (2009)

Bose et al. (2001), Mozer et al. (2001)

Fayyad et al. (2002); Apte et al. (2003)
Chang et al. (2009); Sara Philpott (2010)

Kenneth Cox et al. (1997); Scarfe et al.(1995); Tsaih et al. (1998)

Berson et al. (1997); Xie et al. (2009); Tsai et al. (2010)
Xia et al. (2001); Song et al. (2001), Kim et al. (2003); Kim et al. (2004)

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Literature Review (2/6)

BIG DATA

TECHNOLOGY ADOPTION THEORIES

Adoption: "Tend to adopt, use, and utilization
(Rahim 2003, Lertwongsatien et al. 2003).
Tornatzky et al. (1990) posited a 3- stage process
for technological adoption in organization.
STOPE (Barky 2004).

TASK TECHNOLOGY FIT (TTF) CONTEXT

The TTF model Gooduhe et al. (1995) impact
on individual and Zigures et al. (1999) impact
on organization: proper match b/n task and
technology characteristics results in a better
performance impact.
Goodhue and Thompson (1995), TTF on
individuals the degree to which a technology
assists an individual in performing the portfolio
of the task.
Presented by SMIT Lab

19

Literature Review (3/6)

BIG DATA

GAPS
Relatively little or no sufficient research has been
done on the adoption of BDA in the telecom
industry in this era of Data deluge.

OUR CONTRIBUTION
OPERATIONAL & METHODOLOGICAL
Contribute to a growing body of literature in
BDA in the telecom industry
Explore TOE framework and show the
relationship and factors of BDA adoption

Presented by SMIT Lab

20

Review (4/6)

TOE

BD as ICT innovation / emerging

technologies adoption.
(Caldeira et al. 2003; Rui 2007;
Oliveira et al. 2011)
Comprehensive tool for
technological adoption in an
organization.
(Tornatzky et al. 1990)

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BIG DATA

Why TOE?... Macro-Level

Individual Level:
TPB, TRA, TAM, Innovation
Diffusion Theory.
Organizational Level:
Yazn Alshamalia et al. (2013)
used Rogers DOI.

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Literature Review (5/6)

BIG DATA

IS Adoption and Context

Authors

Technological analyzed variables

Enterprise system
SMEs in Northwest of England

(Ramdai et al.,2009)

Electronic Data Interchange

(Kuan and Chau,2001)
Small firms in Hong Kong
Communications technologies
(Wang et al.,2010)
RFID in the manufacturing industry

Relative advantage, Compatibility,

Complexity, Trialability,
Observability
Perceived direct benefits, Perceived
indirect benefits
Relative advantage, Complexity,
Compatibility

Organizational analyzed
variables
Top management support,
Organizational, IS experience
Size
Perceived financial cost,
Perceived technical competence
Size, Top management support,
Technology competence

Communications technologies
SME in the US

(Wen et al.,2010)

Relative advantage, Complexity,

Cost, Compatibility

Size, Top management support,

IT competence

Communications technologies
Adoption of single on and
multifactor authentication

(Marise-Marie et al.,2010)

Communications technologies
Grasping project complexity in
large engineering project
Communications technologies
OSS in South Africa
Communications technologies
Cloud computing
Communications technologies
Cloud computing in Vietnam
Communications technologies
Cloud computing adoption by
SMEs in the North East England

Existing technologies in use, New

technologies relevant t an
organization, Business processes
accomplished through technology
(Bosch-Rekveldt et al.,2011) Goals, Scope, Task, Experience, Risk

Size, Global scope, Top

management support,
Technology competence

(Van Belle et al.,2012)

Size, Scope, Resources

(Borgman et al.,2013)
(Chang et al., 2013)
(Alshamaila et al., 2013)

Relative advantage, Complexity,

Compatibility
Relative advantage, Complexity,
Compatibility
Relative advantage, Complexity,
Compatibility
Relative advantage, Complexity,
Compatibility , Uncertainty,
Trialabity

Size, Resources, Trust, Risk,

Project team

Size, Top management support,

IT competence
Size, Top management support,
Formalization
Size, Top management support,
Innovativeness, Prior IT
experience

Environmental analyzed
variables
Industry, Market scope,
Competitive pressure, External IS
support
Perceived industry pressure,
Perceived government pressure
Competitive pressure, Trading
partner pressure, Information
intensity
Competitive pressure, Vertical
linkages, External support,
Information intensity
The industry, Competitive
pressure, Dealings with
government, Regulatory
compliance
Stakeholders, Location, Market
conditions, Risk
Rivalry and relations with buyers
and suppliers, Risk
Competition intensity,
Regulatory environment
Competitive pressure, Trading
partner pressure
Competitive pressure, Industry,
Market scope, Supplier efforts
and external computing support

Source: Alshamalia et al. (2012)

Presented by SMIT Lab

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Literature Review (6/6)

BIG DATA

IT innovations are highly differentiated technologies for which there is no single adoption model

Relative Advantage

Size

Competitive Pressure

Compatibility

Industry

Complexity

Top Management
Support

Trialability

Regulatory /
Government Policy

Technological

Prior Technology
Experience

Organizational

Source: Kautz et al. (2000) and Alshamalia et al. (2012)

Presented by SMIT Lab

Environmental

23

Conceptual Framework

BIG DATA

Big Data
Analytics

Organizational

Environmental

Technological
Presented by SMIT Lab

24

Methodology

BIG DATA

Research Design

A multi-perspective (TOE)
framework as theoretical base.
An inductive content and
qualitative analysis using semistructured interviews as primary
data (face-2-face) (Leedy and
Ormrod 2005).

Interviewees: industry experts,

research institutes, vendors, and
from the three telcos in Korea.

Presented by SMIT Lab

25

Results (1/3)

BIG DATA

Interviewees (N = 29):

Government Research Institute

Private research Institute
IT Consulting
Telcos
IT Company
Academic

Presented by SMIT Lab

26

Results (2/3)

BIG DATA

Technological Key Words

Relative Advantage
Technological Readiness
Technology Competence
Trialability
Compatibility

Organizational Key Words

Presented by SMIT Lab

Big Data Awareness

Innovativeness
Human Resources Expertise
Top Management Support
IT Competence

27

Results (3/3)

BIG DATA

Environmental Key Words

Regulatory Support
Security and Privacy Protection
Fair Competition
Customer Satisfaction
Regulatory Environment

Presented by SMIT Lab

Regulatory Compliance
Customer Trust
Business Value
Customer Churning
Customer Consent

80% of
Respondents
agreed with TOE
framework
28

FINDINGS

BIG DATA

In the organization context, Big Data awareness, and human

capacity development towards Big Data and management
support posed strong influence. From the environmental context,
regulatory compliance, competition and privacy concerns
indicated strong influence
From the Questionnaire and Experts interview, dearth of skilled
Big Data practitioners and data scientists, most enterprise lack
right mindset to exploit Big Data and Big Data training and
education are needed.
Implementing Big Data could pose some challenges. The new
paradigm involves the use of data in an ethical and secure manner
to overcome customers privacy concerns.

Presented by SMIT Lab

29

Case Studies

BIG DATA

Telefonica: Brazil, Germany, UK

Verizon Wireless :USA
Precision Market Insight
Dynamic Insight
Packaging anonymized customer data, analyzing, and
aggregating it and then sell the insights (but not the total) to
marketers, retailers (Ovum,2012)

Telecom Italia
UK telecom firm O2:

Customers can sign up to view their personal data(who and when calls came and
went out)

Source: (Ovum,2012)
Presented by SMIT Lab

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BIG DATA

But

BIG DATA Adoption is Slow.Dearth of

Skilled BIG DATA Practitioners and Data

Scientists.Most telcos Lack Right MINDSET to
Exploit.
BIG DATATHE New, DEFINITIVE Source of

COMPETITIVE ADVANTAGE Across ALL

Industries most especially telcos.
Source: Wikibon Big Data Manifesto, 2011

Presented by SMIT Lab

South Korea Mobile Market

BIG DATA

South Korean mobile users primarily use MIM services on

their mobiles.
Mobile penetration over 110%

32
Presented by SMIT Lab

Source: Asia Pacific Ventures,2012; KCC, 2012

Conclusion 1/2

BIG DATA

Telcos business models are no longer sustainable.Dumb

pipe model strategy is no longer sustainable , smart pipe
strategy relying on network assets and network services to
compete with the disruptive innovation in the industry.
The novelty of this study can be seen as a significant
contribution to the body of knowledge and vital for
policymakers and stakeholders in the industry.

33
Presented by SMIT Lab

Conclusion 2/2

BIG DATA

The telecom ecosystem is unfolding in a state of

chaotic effervescence.
Revenues, services and networks are facing
undue pressures
Yet multifaceted innovation around the internet
and mobile technology is revealing new gold
mines to be exploited!
Big Data is to telcos in this era of data deluge
what electricity was to the Industrial Age.
34
Presented by SMIT Lab

BIG DATA

Presented by SMIT Lab