What Do Phone Companies Do With Your Data?

What Do Phone Companies Do With Your Data

Big data is getting even bigger

Your personal information is a goldmine for marketers looking for ways to figure out what you might like, and then sell it to you. That’s big data; the modern day treasure trove for businesses of all types.

Statista forecasts that by 2027, the global big data market will hit US$103 billion, more that twice 2018 figures.

Statista big data forecast

Statista big data forecast src

In many ways, your data could be the most valuable factor you bring to a business. And one of the most use cases are with telco service providers. So what do phone companies do with your data? Read on to find out.

How telcos benefit from your personal data

Take Telstra, for instance. As their mobile service customer, they have access to your how you use your phone – your browsing habits, what you purchase online, social media posts that you like which might involve products, etc.

This data can help the telco determine what you might be interested in regarding their services. Perhaps you might want faster internet to stream larger files, and so you get sent an ad telling you about a new plan with larger data inclusions.

But businesses also have a duty to keep your data safe. This is especially critical in the telco market, where access to your private browsing history is readily available to telcos. The desire to sell produces and services to you based on collected personal data must be balanced with the responsibility to keep that data private. So how do telcos maintain that balance?

How Telstra balances your privacy with target marketing

Telstra acknowledges the fine line between respecting the privacy of your data, and marketing products to you based on that data.

Telstra chief marketing officer Jeremy Nicholas described how the telco uses Salesforce marketing cloud as a “centralised decisioning engine and data source” to personalise in-store, agent and online experiences for customers.

According to Nicholas, the collected customer data helps Telstra determine what ads to send and what not to send to the customer. In many ways, this can improve a customer’s online experience by suppressing ads that they likely won’t be interested in based on their data, and sending ads that fit their usage history instead.

Mr. Nicholas gave an example regarding 5G plans or products:

“If you’re in a 5G area and we’ve turned on the cell towers in your area and flipped over to 5G, we’ll see that you’re connecting onto that [tower] say 30-40-50 percent of the time and we’ll say, ‘Hey, we’ve actually rolled out 5G in your area, we can see that the cell tower you use all the time for most of the things you do is actually 5G-enabled. Here’s a great 5G upgrade offer on your new iPhone or Samsung’.”

But there must be a considerable amount of snooping to be able to know this, which can be quite creepy. Mr. Nicholas explains this away by focusing on how targeted ads help the customer – he claims it’s not about putting pressure on you to make a purchase, but rather just informing you about a service you might like.

And as far as measures taken to keep all of this ethical, Telstra also uses customer data to identify vulnerable groups and exclude them from targeted ads campaigns. For instance, financial literacy could be a key factor – if data indicates that a customer cannot afford a particular service, ads about that service would be suppressed for that customer.

But then again, data can be misleading. A customer might seem financially vulnerable as far as a data is concerned, but might still want to purchase an expensive service. In such a case, the customer might take offence to being excluded from such ads.

However, in order to maintain that balance between privacy and marketing, telcos like Telstra must err on the side of caution to avoid unethical practices like selling to customers who seem vulnerable in whatever ways relevant to a particular product.

Final words

Considered in abstraction, it makes sense that Telstra would be finding every way they can to mine the value in the data they have. The biggest financial trend of the internet age is using first the ‘meta data’ and then the raw data itself, in Artificial Intelligence and Machine Learning algorithms, to target ads to users.

Alongside Google Facebook and the big internet companies we hear about in the news, phone companies like Telstra and banks are the institutions in Australia which hold the lions share of information about people. Just think how much your phone knows about you. It senses where you live, it knows who you call, when you’re surfing the internet on Telstra’s mobile data network, it knows which sites you’ve been to and what you’ve looked at.

Telstra have a responsibility to their shareholders to make the most of the commercial opportunity which has been afforded them. Of course, they also have a responsibility not to ‘freak out’ their customers with ads which make clear how closely they are being monitored.

 

Neil Aitken

Having worked in 3 countries for 4 telcos on both voice and data products, Neil is in a position to give you the inside track. Get beyond the marketing messages to the best plan for you.