HomeInsightsThe hidden cost of the smartphone boom

    The hidden cost of the smartphone boom


    …and it’s not (just) the network upgrades

    The impact the smartphone boom has had on mobile networks is well documented, but there is another cost for mobile operators that is hitting the profitability of new data services – and that is customer support.

    It may not be a sexy area, but consider the numbers. InnoPath’s headline figure is that smartphones cost four times as much in terms of their lifetime support compared to featurephones. Stratecast estimates that smartphones require three times the average call handling time of a featurephone.

    Rob Dalgety, of Mformation, cites a Strategy Analytics stat that on average smart device calls last 45 minutes, “a lot longer” than the average feature phone call.

    “The problem for operators is that they are burning opex on these calls,” Dalgety says.
    An InnoPath study in 2009 found that calls related to mobile email alone were costing operators and device makers $266 million a year. Just four main issues (email, internet settings, lost phones and handset bugs), representing less than 25% of support calls, cost operators $466 million over the 12 months to August 2009, InnoPath said.

    This can also lead to a knock-on cost as customers churn, or return handsets. RealVNC’s Tom Blackie says that it’s “not unusual” for 10-15% of new handsets to be returned as users struggle with configurations and become frustrated with lengthy calls to customer care centres.

    This impact on mobile operators is leading the industry to prioritise investment in solutions that give device management capabilities to front line customer care agents. This includes remote diagnostics, as well as the ability to carry out over the air fixes.

    The emphasis is on increasing what InnoPath calls “first call resolution”, and also on freeing up higher tier support for genuinely complex issues. InnoPath says that three year savings from integrating device management at the customer care level at a Tier1 operator could amount to $575 million.

    Mformation’s Dalgety says that giving his company’s product to customer care agents will enable them to deal with device-based issues without having to escalate the call.

    As an example of this approach, Mformation has recently partnered with Amdocs to include its device management product within Amdocs’ CES product. Already a key partner with HP, Dalgety says that Mformation is “vey focused” on this partnership with Amdocs, and sees it as adding a crucial tool to customer care agents’ dashboards.

    InnoPath is also targeting its ActiveCare product for integration with Amdocs, Siebel and SAP’s customer care software. It says that ActiveCare can save 14 minutes, or as much as $24 a call, by resolving issues quicker.

    Seth Nesbitt, Vice President, Product and Solutions Marketing, Amdocs, says, “Mobile devices and services are becoming increasingly complex, which makes providing profitable quality support for mobile customers a growing pain point for mobile operators.”