This report attempts to evaluate how the advent of Web 2.0 and consequent social media technologies have changed the way telecommunications companies interact with their stakeholders in the UK. The findings of the report show how social media technologies such as instant messaging, wikis, and social media platforms have drastically changed telecoms’ internal and external business operations, and highlights the importance of online communities and how they can influence general opinion. Further analysis presents the rapid diffusion of innovation among new social media technologies, such as increasing mobile and messaging platforms, and the impact that they have had on telecoms companies. Using the primary findings of this study, a strategy for telecoms companies is suggested through which they can take advantage of the increasing use of mobile technologies, and foster online communities to create marketing campaigns that take advantage of brand user generated content to attract customers.
Web 2.0 radically transformed how Internet users interact
with one another and with the brands they support, due to being able to
communicate using digital platforms. The development of these technologies has
led to a wealth of social networking platforms such as Facebook and YouTube,
where users can share and create content about anything. Moreover, the use of
these platforms has also changed the way businesses interact with stakeholders.
Organisations can now exchange information in a rapid manner from all over the
world. In the same way, consumers now have more direct relationships with their
favourite brands and others with the same interests, establishing online
communities that can influence general opinions about brands, thereby changing
traditional consumer buying behaviour (Ebersbach et al., 2008).
This report attempts to evaluate the impact that social
media technologies have had on how telecommunications companies in the UK
interact with their stakeholders. To answer the question, the report will
firstly provide a background of the telecommunications industry; this will be
followed by an introduction to the most widely used social media tools within
the industry. Secondly, through an analysis of business drivers, the report
will carry out an evaluation of social media adoption. Thirdly, the report will
analyse the rapid innovation diffusion of social media and future trends in a
bid to analyse the impact they have had on the telecommunications industry over
the past number of years. Finally, the report will draw on the findings to
suggest a strategy for improving communications plans with stakeholders by
taking advantage of new technologies. Finally, the report will conclude by
examining the implications of the use of social media in the telecommunications
industry, and presents observations regarding possible future implications.
Ofcom (2017), the UK’s communications regulator, defines the
telecommunications industry as a combination of telecoms, television, radio,
and mail correspondence. In an attempt to obtain an in-depth analysis, this
report will focus only on how social media have influenced the
telecommunications sector in the UK. Telecoms companies offer a wide range of
services. However, their core business is providing network services communications,
both fixed and wireless. Moreover, the UK Parliament (2017, p.2) considers the
telecoms industry to have significant, importance as they ‘underpin much of the
economic and social activity in the UK’. In fact, all UK companies rely in some
way on the connectivity provided by telecoms companies. Even citizens
acknowledge the importance of telecoms services, as broadband is currently
viewed as one of top five modern-day essentials (Which?, 2016).
The leading companies in the UK in fixed broadband services
are BT, Sky, Virgin Media, and Talk Talk. BT’s market share increased after its
acquisition of EE in 2016 (Ofcom, 2017).
In mobile services, the leading companies are EE, O2,
Vodafone, and Three (BT Group, 2016).
Over a five-year comparison, revenues of the UK telecoms
combined decreased by -2.2%; however, in 2016 they increased by 0.4% (Ofcom,
2017).
In consideration of the extensive use of technologies within
telecoms companies, the industry can be characterised according to
technological readiness and integration (Low et al., 2011). Moreover, due to
the high competitive pressure within the industry, particularly in the UK,
these companies have increasingly made use of new technologies, making them
excellent examples in the adoption of Web 2.0 and social media technologies.
The advent of online platforms has changed how companies
interact with their customers. These changes are mostly driven by how online
communities can influence potential customer opinions. Online platforms are
characterised primarily by user-generated content, fostering the creation of
communities online made up of customers who interact with each other, and share
information and personal views on specific brands (Cova and Pace, 2006).
Business Week (2004), for example, devoted its ranking of the world’s 100 most
valuable brands to the rise of what it labelled ‘brand communities’, and the
impact they have on their chosen brand. With the increasing importance of brand
communities on social networks, telecommunications companies have begun
adopting these platforms with the intention to control, or have an impact on
the messages and information shared online.
The development of e-business capabilities is crucial, as it is
not only rapidly changing the way that companies buy, sell, and deal with
customers, but also becoming a more central part of internal business operations
(Zhu, 2004). Instant messaging applications such as Slack (Slack, 2018) can
connect business teams with tools and services for better integrating their
work, and for remaining up-to-date with new tasks. Organisations that use these
tools obtain substantial returns through efficiency improvements. Faster
response times, better integration between business units, and accessibility to
information are only some examples of how instant messaging platforms,
alongside the use of APIs, can improve business performance.
With the advent of the Internet, the research of new
products has become simpler. Studies note that the rise of information-sharing
mechanisms, such as blogs and social media, is shifting the online market from
a small number of products with high demand to a large number of products with
relatively small demands, nurturing the formation of the “long-tail” (Anderson,
2006, p.10-15). Hence, the rise of social network platforms opens up new
opportunities for analysing several aspects and patterns of communication,
through the collection of data (Baars and Kemper, 2008). For example, it is
possible to understand what people think about the performance of a
telecommunication service, and react accordingly. Therefore, the correct use of
data is essential when analysing customer needs and future trends.
The
increasing use of data collection for reasons other than new business
opportunities has also given rise to ethical concerns, in particular among
governments and regulators. The newly developed General Data Protection
Regulation (GDPR) aims to give control back to citizens of their data. For
example, customers now have the right to ask businesses to view or delete data
collected about them (). This regulation will have several consequences. Companies
will be required to adopt comprehensive changes in order to implement a new
comparable level of privacy. As such, businesses will need to make investments
in both technical and ethical contexts in order to adjust to this new law.
Through the TOE framework (Tornatsky and Fleischer, 1990),
composed of structural, environmental and technological factors, and with the
use of real case scenarios, this report will evaluate social media adoption in
the telecoms industry, and the impact that these technologies have had on how
said organisations interact with their stakeholders. The TOE framework is
characterised by:
In
the analysis of social media adoption, along with the TOE framework, this
report will employ the business drivers of telecom companies. In their paper,
Oliveira and Martins (2010) identify three business drivers for telecoms
companies in the adoption of digital technologies: perceived benefits,
obstacles, and technological readiness. Therefore, with the use of a model, in
this case a combination of the TOE framework and the identified business
drivers, the following section will analyse social media adoption in the
telecoms industry, and how these technologies can support their business
operations.
The advent of Web 2.0 has delivered benefits to the internal
and external interaction between businesses and their customers and suppliers.
As explained earlies, social media platforms have fostered the creation of
online communities who interact based on their favourite brands, and has a
positive effect on brand trust, and therefore, on brand loyalty (Laroche,
Habibi and Richard, 2013). Moreover, these technologies have also created a
collaborative environment known as ‘Enterprise 2.0’, where employees collaborate
with one another through private online platforms that nurture
knowledge-sharing (Efimova and Grudin, 2007). Similarly, communication between
businesses have also changed. For example, integration of the supply chain
through e-procurement indicates as a result increased performance among
organisations (Hsin Chang, Tsai and Hsu, 2013).
Mark Morell (2010) explains how British Telecommunications’
organisational culture, where their employees should support one another by
continually sharing new knowledge, and remain in contact with each other, has
helped the company to successfully create and implement an internal blog
available to more than 14 000 employees and third parties. With the use of a
blogging platform in the form of an intranet system, British Telecommunication
is capable of assessing employees’ needs in terms of sharing new knowledge,
creating an integrated technology platform, and remaining up-to-date with new
implementations.
In 2013, O2 created a campaign with the attempts to engage
with online communities, while at the same time delivering a positive message
that would be associated with their brand (Shortyawards, 2013). The campaign
involved social media accounts on Twitter, thus user-generated content,
exhorting social media accounts to encourage other users to eliminate the use
of harsh comments over social media platforms. The campaign used the hashtag #bemoreodog
to collect conversations, thereby allowing O2 to respond where appropriate, and
allowing consumers to learn more about the campaign. As a result, commissioned
Nielsen research found that users associated with the message on Twitter were
more likely to report that they would choose O2 next time they switched mobile
phone networks, compared to those that had not been exposed to the campaign.
In the evaluation of the adoption of social media
technologies, obstacles are as significant as perceived benefits, as they may
offer indicators about cultural behaviour within the industry. To better
understand these behaviours, the analysis should be divided between internal
and external barriers. For example, whereas employees’ motivations are the
primary factors in the internal adoption of new technologies (Vuori and
Okkonen, 2012), in the external environment, the main barriers are related to
cost and technical operations (Pan and Jang, 2008). By understanding these
behaviours, it will be possible to address new opportunities in the adoption of
social media technologies.
The main obstacle in the adoption of new technologies within
organisations is the slow adoption of new platforms by employees. According to
Vuori and Okkonen (2012), two main factors that characterise this slow
adoption. Firstly, the time and effort required to learn how to use these new
platforms, and accordingly, an increased workload. Secondly, the similarities
between one platform and another, and as a result, low perceived added value
and a lack of effort in learning how to switch to the new information system.
To create motivation for platform switching, the use of rewards or promotions
can help to address these barriers.
Environmental factors define the main external obstacles to
social media adoption. In the telecoms industry, however, there are lower
barriers (Zhu et al., 2003). For instance, larger organisations with large
financial resources, such as telecoms companies, are more likely to adopt new
technologies. Moreover, industries with a high level of consumer readiness and
competitive pressure generally follow environmental trends in the adoption of
new technologies. However, in developed countries, one of the main barriers to
the adoption of new technologies is the regulatory environment. The analysis of
external obstacles indicates how, other than financial resources, the adoption
of new technologies is mainly driven by factors external to organisations.
The analysis of the
obstacles to social media adoption discovered that in the internal environment,
social media barriers are related to a lack of motivation among employees. In
particular, by constantly introducing new platforms, employees may come to view
learning how to use these platforms as a waste of time. Through the combination
of social media and e-learning (Cidral et al., 2018), it is possible to create
rewards for employees who help others, while at the same time fostering the use
of new platforms, thanks to increased shared knowledge. Thus, offering rewards
to employees may be serve as a possible solution for removing some barriers to
the internal adoption of social media technologies, and as a means for
addressing new opportunities to foster knowledge within the organisation.
By considering the primary obstacles in the internal analysis,
the main reason for why employees do not adopt new social platforms can be
identified as a lack of motivation. A possible solution to this scenario is to
offer rewards to employees who make use of new platforms, as they will offer
value to the business in terms of supporting their operations. In recent years,
telecoms companies such as Vodafone and EE have created internal social media
platforms to motivate their employees to share new knowledge, with significant
results (O’Reilly, 2018; Vodafone, 2016). However, by focusing only on
Intranet, companies are missing out on the opportunity to leverage their
employees, and on taking advantage of their knowledge of the company to create
marketing campaigns using Q&A social media platforms such as Quora and
Reddit, which can serve as tools for connecting brands with potential
customers, thus creating rewards for both employees and the company. Therefore,
when seeking out new opportunities, companies must also analyse their internal
environment, through which it is possible to discover existing resources that
can be used to take advantage of the possibilities that social media platforms
offer.
Innovation adoption, in a social system, can be promoted as
having a domino effect. Tornatsky and Fleischer (1990) define ‘technology
innovation’ as a set of events and behaviours on the part of individuals or
social units. The diffusion of innovation (Rogers, 2003) is generally linked to
a small number of early adopters; over time, the new service or product will
gain momentum and spread through a specific social system. Hence, the diffusion
of new technologies depends on the initial adoption behaviours of a few people,
who will then help spread it throughout their social networks to people who may
initially have barriers against its approval. In the case of social media
technologies, the diffusion of innovation occurs more rapidly than previous
technological changes, as Web 2.0 renders connections among individuals
quicker.
In recent years, entrepreneurs have increasingly taken advantage
of social media platforms to foster the continued creation of new platforms,
made easier by the low cost involved in their development, and the rapid
diffusion of innovation. Consequently, nowadays, Internet users find themselves
with many options related to their experience and social media intentions.
However, the high threat of substitution and the low cost of change have given
rise to what is known as the ‘cyber migration’ (Zengyan et al., 2009; Cheung et
al., 2011), where costumers regularly switch between these services. These
rapid changes between platforms have made it more difficult to retain
customers.
In recent years, even telecoms companies have
suffered the cyber migration effect. The status of smartphones as the most
widely-owned internet-enabled device, and the introduction of the mobile
application, WhatsApp, have radically transformed how people share information
with each other. As reported by The
Economist (2015), in 2015, WhatsApp already counted more daily messages
than all other standard texts combined. Therefore, the increased use of
WhatsApp resulted in a reduction of revenues generated from SMS services for
telecom companies (Ofcom, 2017); in an attempt to retain costumers, these
companies now offer this as a free service.
As reported in section 4.2, social media platforms have
created a radical shift in the telecommunications industry. For example, the
amount of mobile data used to access for the Internet per month over the past
few years has drastically increased (Ofcom, 2018).
Figure 8:
Average fixed broadband revenue per connection and data use per month (Ofcom,
2017).
In the same way, mobile users are now progressively making
use of data using their smartphones (Ofcom, 2017)
The increase in use of mobile data is driven both by an
increased use of social media platforms and by an increase in the use of
smartphones (Statista, 2017).
The increased use of data and social media platforms has
changed the business strategies of telecommunications companies. From having
previously offered direct messaging and video calls, today, these services are
shifting towards the use of mobile and desktop applications via internet broadband.
For example, SMS revenues and usage in the telecoms industry are falling, as
people have moved away from traditional messages to social media platforms such
as WeChat and WhatsApp. In the UK, 69% of people use internet applications
rather than SMS.
In the same way, Internet phone calls are slowly taking the
place of traditional phone calls, as the number of individuals who are making
voice and video calls using the Internet continues to increase (Statista,
2017).
Furthermore, the increased use of smartphones and data have
opened up new possibilities for how telecoms companies interact with their
customers. In fact, through the use of big data databases and social media analytics,
telecoms can now reach a wider audience, and can do so with a better
understanding of the opinions customers have of their brand (Statista, 2017).
As shown in the image above, with the introduction of social
media, marketing campaigns are now focusing more on individuals and
communities, as they are the ones structuring and shaping social media
platforms (Berthon et al., 2012).
To summarise, the impact analysis demonstrated two
significant changes in the impact of social media platforms within the telecoms
industry. Firstly, the ease of use of platforms such as WhatsApp and WeChat has
transformed the services that telecoms companies offer to their customers, with
a switch to focusing on delivering more data and free mobile data for the use
of mobile applications. Secondly, marketing campaigns are now more focused on
social media platforms, as individuals can influence people within their
networks, and the collection of online data can help telecoms companies create
a micro-targeting campaign, or predict future consumer behaviour. As such, the
increasing use of data and the fostering of online communities via social media
has changed interactions between telecoms companies and their customers.
This report discussed how social media have changed how
telecoms companies interact with their customers, and how there are now more
exposure opportunities available to the former. For example, when a brand
engages with its fans through social media, it can benefit from a secondary
effect and gain more exposure among the friends of the targeted audience
(Lipsman et al., 2012). It was also discussed how user-generated content, which
structures the content of social media platforms, have the potential to shape
consumer brand perceptions (Smith, Fischer and Yongjian, 2012). In this way,
social media have given costumers the power to influence opinions on how people
may perceive brands.
The recommended strategy will make use of the AIDA model.
The model describes the four cognitive phases experienced by an individual when
changing their behaviour towards a product or service (Doyle, 2011). The steps
involved are attention, interest, desire, and action. Through these steps, the
model creates a purchasing funnel that supports buyers, from gaining an
awareness of the product to its eventual purchase. Moreover, if considered in
the context of social media, the AIDA model will not only focus on consumers
and the company, but will also involve the social networks and communities
connected with the target audience.
The strategy comprises two steps and aims to influence
non-costumers through existing customers within the same social network. The
first step is to make use of the AIDA model to attract existing customers, and
to have them create new content on their social media platforms that includes
the specific brand. Secondly, using the data collected by social network
platforms, it will be possible to evaluate the impact of the strategy on
existing customers, extract the structure of social networks, and target new
potential customers. As such, the strategy takes advantage of the trend
indicating that online consumers trust their friends on social media more than
the advertisements displayed by business organisations (Katona, Zubcsek and Sarvary,
2011).
Attention
The objective of this step is to create awareness of
advertising aimed at the target audience. With the use of GPS technology,
telecoms companies can track the location of their customers. Thus, when they
are near a digital screen, for example, at London bus stops, a targeted
advertisement can be displayed.
Interest
The next step is aimed at stimulating interest in the
advertisement. The use of GPS for displaying the advertisement will ensure that
existing customers are targeted. Thus, by displaying the logo of a brand, such
publicity will likely attract the interest customers.
Desire
Obtaining the desire of the customer is likely the most
challenging aspect. To do this, the advertisement might offer motivation
related to personal identity, by setting up a campaign that enables consumers
to adapt their personal preferences. Research indicates one of the reasons for
people engaging in brand-related content as being self-expression (Muntinga,
Moorman and Smit, 2011).
Action
The final stage of the AIDA model consists of persuading
customers regarding the ‘call to action’. The idea is to offer a simple way for
customers to freely express their personal brand through the campaign, thereby
persuading them into the creation of user-generated content (Burmann, 2010).
For example, the use of a set of pre-generated artistic images that represent a
range of personalities, and in which customers can see their specific
personality being reflected.
The final part of the strategy comprises the collection of
data. The data will be used to take advantage of social media measurements, to
evaluate the effectiveness of the strategy, and to extract online communities
involved with the brand. In this way, it is possible to firstly gain an
understanding of the efficacy of the marketing strategy on existing customers,
using ratios such as the activation of the advertisement and the creation of
new content. Secondly, the process will provide an understanding of the
existing customer communities. Through the use of visual graphics software such
as GEPHI (Gephi, n.d.), and the model created by Girvan and Newman (2002), it
is possible to understand the structure of these communities. Moreover, the
evaluation of social media metrics such as network structure and social roles
(Peters et al., 2013), will help the identification of potential customers to
target who are strictly related to the existing users.
Social media technologies have drastically changed the
interactions of telecommunications companies in the UK with their stakeholders.
This report carried out an extensive literature review on the background of the
telecommunications industry in the UK, followed by a discussion of the
emergence of social media tools such as wikis, instant messaging, social media
platforms, and the use of big data, alongside its ethic concerns. Using the TOE
framework and business drivers, the report then analysed the adoption of these
technologies. Moreover, innovation issues pertaining to social media
technologies, as well as future trends, were also presented. From the
innovation analysis and recent changes in the telecommunications industry, the
impact that these technologies have had on the industry was analysed. Finally,
according to the findings of the impact of these technologies and the trends
analysed in the research, the report suggested a strategy for improving
external business performance, and for improving the communication between
telecoms companies and their customers and other stakeholders.
As explained in this report, smartphones are currently the
first device used for connecting to the internet. Moreover, mobile phones make
it easy to access applications, which are easy to use and offer a wide range of
services. WhatsApp, for example, makes it easy to share information through
instant messaging. Furthermore, as mobile data speed becomes faster, voice
applications will likely become more popular and replace traditional phone
calls. With the development of this environment, it is possible then to make
two considerations. Firstly, the reduction of use of traditional messages and
phone calls does not pose a threat to telecoms companies, as can be replaced by
the introduction of new technologies and the consequent increase of prices in
plans. Secondly, the replacement of traditional messages and phone calls
through social media applications, could replace the need of a phone number,
hence the use of a physical sim. Therefore, it is possible to consider that the
increase use of social media platforms and application, can pose, to telecoms
companies, a threat of identity. For example, telecoms companies could shift to
data-only plans and the establish the use of virtual sim, as seen with iPads
(Apple, n.d.). Subsequently, customers will be able to switch between different
plan week by week according to the cheaper offer. Thus, this situation will
probably create a new ‘cyber migration’ effect in the telecom industry.
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