Telefónica Digital – the global division of Telefónica formed in September 2011 to focus on services in areas such as cloud computing, mobile advertising, M2M, eHealth and OTT applications – has set up a business to sell data it collects from millions of its mobile phone customers to retailers and public sector organisations.
The new unit will be called Telefonica Dynamic Insights and aims – in the operator’s own words – to “identify and unlock the potential opportunities for creating value from ‘big data.’” The first product, Smart Steps, is targeted at retailers and will enable them to tailor local offerings and product promotions for existing stores and determine the best locations and most appropriate formats for new stores.
In an apparent attempt to downplay any concerns over privacy and data protection, Telefonica talked up the fact that the mobile network data will be “fully anonymised and aggregated.” Although no retail partners have been publicly announced yet, the operator says a "number of retailers" are “already helping with product development by providing user feedback.” Telefonica claims another use for Smart Steps will be helping town councils measure how many more people visit their high street after the introduction of free car
parking, farmers markets, or late night shopping.
The company is working with market research firm GfK on product development, with initial services to be available in Brazil, Germany and the UK. The partners intend to develop a range of products and services using different data sets, including machine to machine data and mobile network data. In addition to retail footfall measurement Telefónica Dynamic Insights is also developing analytics products to help companies in a range of different industries, encompassing fraud protection and ‘Smart City’ technology (such as traffic management).
“Big data is one of the key building blocks of the digital economy. Approached in a smart and responsible way it has the potential to transform every part of business and society – providing economic growth and improving people’s lives,” said Stephen Shurrock, Chief Commercial Officer at Telefónica Digital, in a prepared statement.
Ovum analyst Jeremy Green told Reuters that Telefonica’s plans are positive. "This is a good and clever thing to do, and it fits in with an overall Telefonica strategy, which is to look for revenue streams other than just selling connectivity," he said, adding that data was already being sold by operators, but in a more piecemeal way than Telefonica was planning.
Headquartered in London with regional centres in Silicon Valley, Sao Paulo, Spain and Tel Aviv, Telefonica Digital is home to the operator’s digital applications and online business models such as Jajah, Terra, Media Networks Latin America, 48, giffgaff and OTT service Tu. At launch Telefónica Digital was a business with annual revenues of US$2.95 billion in 2011 but Digital's CEO Matthew Key is tasked with generating annual sales growth of 20 percent each year up to 2015, by which time Digital is expect to be generating revenues of about US$6.15 billion.