However, the value of the telco industry, the very fabric enabling this revolution, is shrinking. Telcos once relied on regulation, capital intensity, and customer growth to generate healthy, growing returns. Nowadays, lower customer growth, market fragmentation, and unbalanced constraints against less regulated, innovative technology players are making things more difficult. And this lets other technology players capture a disproportionate share of the value created by the whole system.
Perhaps as a reflection of this new balance of power, operators are also losing relevance in customers’ hearts and minds. They are desperately needed, but often taken for granted and expected to carry on in the background while providing outstanding service.
In the meantime, people’s lives are changing fast. Increased data volumes open new possibilities to enhance our quality of life and aid societal advancements. But paradoxically, in our connected world we are burdened with more administrative work, more login credentials to remember, more time spent on data entry, and growing anxiety about personal data and cybersecurity. Our digital lives are becoming richer, but equally more complex and difficult.
This growing complexity feeds the fear about what “bad actors” might do if they infiltrated our private data castle. In our recent Telco 2025 Insights survey, one in four consumers has concerns about the way companies store our personal data. These personal data are quickly becoming the closest thing to our identity, our “selves,” and individuals’ trust is more and more closely linked to the control of their personal data.
Our data is becoming the utmost expression of our trust, and our control over them will soon constitute a basic human right. The General Data Protection Regulation (GDPR) in Europe and similar legislation emerging in other parts of the world are early attempts to regulate this.
Telcos and trust
Telco and data challenges are intimately connected because trust will play a fundamental role in helping telcos move away from utility status. Customers will only entrust their data (and their business) to companies that both add value and prove worthy of their trust. How operators collect, manage, protect, and use our data, and all the data around us, will be key to regaining and retaining customer relevance.
Source Oliver Wyman Telco 2025 Survey of 8000 consumers
As the above exhibit shows, most telcos still lag behind banks as trusted protectors of data (although marginally ahead of today’s tech giants). So how can they win this trust vote?
Doing four things well will be key:
First, put the customer in control. This means giving customers transparency, control over their data, control over what they are paying for, and choice over what and how and when to buy.
This is often not easy for the telco industry to do, given the economic requirements of a subscription business, but some are already trying. One large telco, for example, is looking to build trusted “personal data banks” where users can consolidate their data and personal information from multiple sources. The idea being that users become more aware of what is being tracked as well as better able to control how these data are used, and by whom.
Second, prioritize security. Any business aspiring to play a trusted data-manager role must be as secure as Fort Knox. There must be no shortcuts, no lowering of standards, no mere GDPR (et al.) compliance – but rather pushing hard to redefine the gold standard for data security. Above all, data security must become a key component of an operator’s brand. Many telcos are already trying to raise their public profile on cybersecurity, joining alliances with other industry players, and increasingly communicating on the subject.
Third, deliver a reliable, user-centric, personalized service and experience that is tailored to each individual user. The business must understand what each of its customer’s needs, act on that information in a non-intrusive way (while pursuing its legitimate commercial interest) and provide reliable services that work every time. From a business-to-business (B2B) perspective, analyzing customer data, either in an aggregate or anonymized fashion (provided consent is given), opens up a host of potential services: partner services, personal coach, advertising, and anonymous analytics and GDPR outsourcing.
And fourth, give customers back some of the value of their data, either in monetary or utility terms, making sure customers understand and appreciate how and when this happens. For example, some well-known operators are already working on price advantages derived from their analysis of user data and others are working on “life coach” apps integrating third-party providers to help customers make better decisions.
The road to telco relevance
We believe operators are well positioned to become trusted data managers. Secure networks and reliable communications are part of their DNA. They already operate mission-critical network and data infrastructure, have strong cybersecurity skills, and have a solid track record in privacy and identity management. They create huge amounts of customer data every day and are used to complying with the strictest regulations. And they are also well aware of the importance of long-lasting customer relationships.
This promising future is far from guaranteed. Telcos will need to act boldly, and there will be no shortage of competitors for the role. Many will not succeed along the journey. But, if regaining customer relevance is paramount to future industry returns, there will be no way around winning the race for consumer trust.