Chances are that you, like me, have been frustrated by a ‘storage almost full’ pop-up message on your mobile phone. In a digital world where we all value being able to safely and securely back up and store our personal pictures, videos, audio, contacts, documents and more—and are reluctant and simply do not like to free up memory by deleting cherished data—mobile device users are now more than ever willing to pay a premium to protect and save their content. The runaway success of Apple iCloud, Google Cloud and other app-based backup solutions proves it.
Selling additional storage isn’t reserved to the likes of Apple or Google, however. In fact, telecom operators are perfectly placed to sell this additional storage directly to subscribers by leveraging their long-term established position of trust with subscribers. It’s the kind of new revenue opportunity needed to ensure that operators have the means to build out 5G networks as well as transform into the versatile digital players of tomorrow.
The smartphone multiplier opportunity
2019 wasn’t a good year for the smartphone. Gartner recently revealed that worldwide smartphone sales declined 2% last year. This is the first time since 2008 that the global smartphone market has experienced a decline. Such indicators hint that the market may have reached saturation point.
On the other hand, the smartphone multiplier market—the products and services that enhance the existing smartphone experience—is on the rise. Deloitte estimates that the market will generate $459 billion of revenue in 2020 alone, representing a 15% increase compared to 2019. As smartphone ownership reaches critical mass, these multipliers will become increasingly key to creating new sources of revenue.
Cloud backup is one such smartphone multiplier. Many mobile users today are already comfortable with the idea of paying a premium for cloud storage. Why? Because while devices are replaceable, the content stored on these devices is not and mobile users want to guarantee its safety at all costs. This subscriber demand for cloud storage will only intensify as we see 5G bring new services to the table and as consumers generate more and more content.
But while there are a few content storage options on the market, not every cloud provider is best placed to meet this rising demand. One of the main reasons is trust—or lack thereof. There are certain sensitivities around storing our valuable personal content and memories with companies that sometimes have shown questionable track records and decision making when it comes to privacy and security.
Thankfully, an alternative exists: the operators. Operators have worked incredibly hard to earn the enduring trust of consumers in a world where brand loyalty is fleeting. The majority of subscribers, most of whom have gone from just making calls on feature phones to relying on smartphones to serve a critical role in their everyday lives, are in long-term relationships with their mobile operator – relationships that have been built on trust and continuity.
It’s time for operators to reap what they’ve sown by offering a trusted alternative to OTT cloud storage services. Doing so will not only help boost subscriber engagement and reduce churn, but it will also enable the creation of much-needed additional revenue.
Giving subscribers what they want
Aside from trust, what else do operators have when offering a cloud and backup service?
First, because they own and deliver the subscriber experience, operators are able to put cloud backup offers in front of subscribers when most convenient. One example of this is during the purchase of a new device or new mobile contract when transferring, backing up and storing content is at the forefront of a subscriber’s mind. Operators can capitalize on this by prompting subscribers to add the operator’s cloud back-up service during the set-up process.
Operators can also leverage existing subscriber arrangements. Popular family plans can be enhanced with cloud ‘vaults’ where families upload content and access it as part of their family bundle. Using cloud to enhance a subscriber’s existing package arms operators with a crucial value proposition.
Bundling cloud backup service into a premium plan is just one option for operators. Another alternative is to operate a model where subscribers are given a basic free amount of storage with the option to upgrade to a premium storage tier once the free space has been used. The ‘try before you buy’ model is a good way to introduce subscribers to the convenience of an operator’s cloud storage capabilities.
Above all, an operator-owned cloud offering removes a lot of user friction that consumers may experience with their existing cloud provider. Operators already manage a subscriber’s mobile device and data plan, so rolling cloud into this arrangement results in a more streamlined, integrated process that places many of the services that users rely upon under one roof.
New revenue within an arm’s reach
The good news for operators is that launching a cloud backup offering is easier than ever because they can follow the blueprints of other operators who have successfully done so already. Verizon, BT, Proximus and AT&T are examples of large operators who are selling cloud backup services to subscribers. Nothing is holding back other operators that want to launch similarly successful services.
Operators around the world want to create additional recurring revenue while, at the same time, improving the overall customer experience and getting closer to their customers. Cloud storage makes this possible, putting operators in a prime position to leverage their well-earned reputations and ability to provide one-stop convenience by offering a service that subscribers genuinely desire and are willing to pay for each and every month.
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