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Rail industry trends:Telecommunications and railways

April 08, 2016
Author: Peter Cochrane OBE

The telecommunications and rail sector may not seem linked, but they share a lot of common history. They are both over 100 years old, and the root of the telecoms revolution actually came about because of rail and a need to communicate faster than the moving vehicle. Now, both largely de-regulated, they are experiencing new challenges and opportunities to be innovative and meet rapidly changing customer needs.

Rail often provides significant advantages over road and air travel:

  • Secure access, regularity, reliability, and speed of the service.
  • Travellers can avoid the ‘down time’ of driving or check-in and security lines at the airport.

At the same time, the rail Industry trends has been enriched in other ways: the telecoms industry has provided an added dimension to the journey, with travellers on the move for work and pleasure able to use onboard Wi-Fi. Ensuring that these services are continuously delivered, with good speed, assures rail passengers that they will enjoy a high level of service and always travel in relative comfort with the least disruption to their working day.

Seamless customer experience

However, there is scope for rail operators to further embrace connectivity and provide many more seamless communication and payment services, which are already available in the auto and aviation industries. For road users, GPS offers advisory and alternative routes in the case of congestion or accidents, and toll and congestion payments are automated. Air travellers enjoy text updates, lounge and in-flight information with regular updates on any departure or arrival delays, flight time, gate information and connections. Whilst there is a certain amount of this present in the rail industry, operators need to offer a continual stream of information and collaborate with other modes of transport to help passengers avoid delays and adapt to volatile appointment schedules to their journey. For many, simple and certain A to B journeys are the exception, life is now more complex, and real-time routeing changes are the norm!


Customer-centric transformation

From a commercial perspective, there’s also a cultural parallel between the two sectors. Around 20 years ago, boardrooms of telephone companies across the UK and Europe faced the decision to stop being engineering legacy businesses, and to become converging customer-centric organisations. The rail industry is in a similar state today. New agile companies like Amazon and Airbnb are popping up in every sector including travel, and rail operators have the opportunity to embrace this level of customer-centricity or risk damaging their reputation as perpetuated by the telco industry. Despite the demand for their services going off the scale, telco companies continue on the ‘back foot’ and appear as everyone’s devil when they could have been everyone’s hero.

Having a true ‘customer comes first’ culture and thinking like a service company will help rail thrive and compete with new players already grasping this opportunity.

Of course, rail faces larger challenges than just providing good customer service and personalised offers. If we take the UK as an example, one barrier to progress is that government contracts are not long enough for companies to invest in rolling stock and achieve a good ROI, which immediately limits their performance and investment strategy. Whilst transformation on this scale is expensive and time-consuming, prioritising investments is essential to driving future evolution. The government needs to support investments in infrastructure by developing a vision and a plan rather than penalising companies via threat of non-contract renewal.

If we look at the move in the telecoms industry to install optical fibre in the entire long lines network and transform it completely into the digital network, this rewarded telcos with a platform that allowed them to offer more innovative solutions and service to customers. Had they only continued this into the local loop (last mile), the rewards would be even greater. Customer demand is there, but the investment and care is not!


Peter Cochrane OBE To sum up, the rail industry is continuously evolving across Europe but it is held back by a lack of ambition, willingness to be radical, and a vision to take long-term decisions to make a big difference. That said, I do believe that there is huge opportunity for rail operators to become innovators and rise to the challenge of not just meeting but pre-empting increasingly complex customer needs. After all, if the Japanese and Chinese can do it, then surely so can Europe!


Guest Post by

Peter Cochrane OBE, Futurist and former CTO of BT





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