The operators have been successful in attracting new customers through aggressive marketing and competitive pricing, but once the acquisition process has been completed the operators tend to fall short in their duty as a customer-focused service provider.
The single biggest challenge for the telecoms industry over the next coming years will be managing the customer experience end-to-end. Furthermore, the most obvious way operators can compete with over-the-top (OTT) players (Internet brands) is by leveraging customer data and offering a tailored user experience, with targeted marketing and recommendations. Operators are well positioned in the value-chain to do that but it requires serious moves.
Amdocs just recently published very interesting survey on the critical role of Value-Added Services (VAS) to Mobile Operators in terms of customer experience & retention. They conducted telephone interviews with 220 telecom execs from 18 countries: Argentina, Australia, Brazil, Canada, France, Germany, India, Indonesia, Italy, Malaysia, Mexico, Poland, Russia, Spain, Thailand, UK, USA and Vietnam and the findings were as follows:
Mobile VAS is important to operators and revenue contribution will grow significantly over the next 3 years.
Interestingly, VAS ranked a little less important in Latin & North America, but both regions project it will account for ~40% of revenues in the next 3 years. Countries where at least 50% of respondents said VAS was important or very important included all APAC countries (except Thailand which was 35%), Brazil, France, Italy & the UK. All regions expect at least 10% more VAS revenue contribution over the next 3 years.
Improved customer experience is equally if not more important than generating new revenue streams. One of the main take away from the last 2 surveys is that customer experience & retention is the main business driver for pursuing VAS. That makes sense, especially in pre-paid markets where consumers have multiple SIMs – one operator in such a market told that it had a whopping 40% churn.
And data services can’t be the only growth engine. SMS, while popular and lucrative for operators in the West, isn’t the answer for some emerging markets where you can purchase a Blackberry and data plan, and BBM for free as much as you want. And while unlimited data plans increase data adoption, heavy usage by some is creating a capacity crunch that decreases network quality – and customer experience.
Almost 50% of subscribers or more will own Smartphone’s in the next 3 years. Gartner predicts it will be 60% globally. IDC claimed Smartphone penetration was 20% at the beginning of this year. Respondents rated Blackberry, Android devices & iPhones as the most popular currently – in that order. Gartner predicts Android will lead the pack worldwide in 3 years, followed by Symbian and iPhone.
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