Embrace, collaborate and listen…
Regular readers will know that I often use this spot to allow those in the industry the chance to make a point, or raise an issue they think is important. Today’s article comes from Andreas Bernström, CEO at Rebtel, who argues that operators need to take a more open approach to those who they see as disruptive and threatening. Without second guessing Mr Bernström, I think there are operators with a more enlightened approach than he describes out there, but his views are definitely worth a read and should give pause for thought.
Andreas Bernström writes:
One of the fundamental governing principles of the Internet that ensures our freedom on the web is network neutrality.
The discussion about network neutrality and how it pertains to Wireless Networks has had a new lease of life recently due to the plethora of disruptive third-party VoIP services that are threatening operator’s revenue streams.
In Sweden, the debate has been particularly fierce with Telenor, the world’s sixth largest mobile phone operator with more than 203 million subscribers. Telenor has already given notice to Swedish consumers of its (self-proclaimed) right to cut off access to innovative calling apps such as Viber, Skype and Rebtel.
In Italy, matters have already taken a turn for the worst. Vodafone, the world’s largest mobile telecommunications company measured by revenues and the world’s second largest by subscribers, is already starting to enforce such restrictions to its network. Chances are the same treatment will be carried out across Vodafone’s remaining European markets.
Operators appear to be panicking.
Instead of embracing the technology and collaborating with innovative companies to overcome this market challenge they are blocking services and stifling consumer choice. This strategy is destined to fail and here are four reasons why:
Legislation
In China, the land of the great firewall, Skype is illegal. Government authorities in many European countries look, for all intents and purposes, to be reluctant to take a stand in the matter of network neutrality and seem to be convinced their respective markets will govern themselves without their intervention.
Is the type of development we have seen in Italy the kind of “self-governing” measure that authorities really want to see?
Some foresighted countries have taken action to legislate network neutrality rules, but the majority are yet to follow. The “traffic shaping” measures resorted to by Vodafone are just a glimpse of what’s to come with operators blocking services, then charging consumers premium for using them and rationalising the actions by claiming it’s in accordance with “Fair Use Policies”. Data is data. Bottom line. If you’ve paid for it, you should be at liberty to use it for whatever you want.
It’s time for government authorities in the respective European countries to work with the mobile industry to prevent operators, and the like, standing in the way of innovation. If authorities and industry don’t collaborate to address this issue, the EU is likely to step-in and legislate.
Lack of Substitute Services
Why is it that operators fail to commit to developing novel services that bring value to their subscribers, and instead focus on blocking third-party services that do? To prohibit something without offering an adequate alternative service reeks of desperation and is testament that the business model of operators is failing.
A relevant historical analogy is file sharing. In the absence of adequate substitute services, consumers were forced to look elsewhere. The computing capabilities Smartphones possess in this day and age are nothing short of amazing. They are competent enough to play host to an array of amazing services that create true value and open the door for incumbents to sell more data packages than ever before. Operators, seize this opportunity to help your customers discover the power of Smartphone technology and the utility it brings.
Consumer Hostility
To claim that VoIP services are a breach against the operator’s “Fair Use” policies of data services is solely a question of them not being unable to make as much money on data packages as they can of off their margins on voice. To even attempt making a case for calls over 3G putting more strain on an operator’s network is incomprehensible.
What’s next?
Blocking and charging users more for wanting to see what their friends are up to on Facebook or because they want to watch a clip on YouTube instead of on the operator’s video service? It’s almost humorous to hear operators systematically refer to the term “Fair Use” in their defence, while they charge their own users almost $20 per MB in data charges when travelling abroad.
Competing Forces
When it all comes down to it, what this “trend” amongst operators does more than anything is propel companies such as Rebtel, Skype and Viber to fight even harder for consumers’ rights worldwide. We’re committed to continuing pushing the envelope and develop new innovative services with the best technologies available that benefit consumers.
Incumbents are likely to keep clinging to diminishing margins, lock-in contracts, hidden fees, lavish offices, expensive TV commercials and obsolete technologies. Either way, they cannot stand in the way of what the future holds in store.
There’s an old proverb that reads, “If you can’t beat them, join them”, something that operators should take to heart and consider by embracing new services for increased data revenues. Ultimately, when the Internet converges with telecom, operators are forced to adapt or face a slow demise. The Internet stands for transparency, consumer value, openness and change, all values that clash with that of today’s operator’s.
Customer experience – the impossible journey?
There’s an old Irish joke that has someone asking our traditional Hibernian archetype for directions to a nearby town. “Ah now, I wouldn’t start from here,” comes the answer.
Following a Twitter chat I took part in (and you can file that phrase under Words I never thought I’d write) yesterday, I feel a bit like that about mobile operators and customer experience management.
The Twitter chat, organised in a joint effort between analyst house Telesperience, Nokia Siemens Networks and Cerillion, and using the hashtag CSPCX, broadly outlned what the business benefits of customer experience management are, and asked how to achieve them in the communication service provider environment.
For me, the replies showed that the principle barrier to joined-up customer experience management has been cultural. The conversation quickly got into discussions of how to value customers, which customers to value, who to interact with. In short, it got complicated – and I think that mirrors where operators themselves are on this. Yes, there are technical issues, but they are a result of the way operators have developed over the years.
Operators do indeed know that the game is about reducing the cost of customer retention, and reducing the requirement for incessant customer acquisition. To do that they have to think of their customers in different ways. Operators are told they need to develop much deeper understanding of their customers, on a micro segmented level. They must be able not only to pick up on customer issues historically, but predict when a user might be about to encounter a problem and take action. Yet although operators may talk the language of customer experience management, they find it very difficult to act in a customer-centric way. Here’s why I think that could be.
Operators were designed as one to many delivery networks. The model was one of high growth (a landgrab, as it was described to me) and of scaling rapidly. The customer service model wasn’t exactly take it or leave it. It was more take it or leave for one of our competitors, who are all probably much of a muchness in any case. And if you do leave, we’ll find a new customer to replace you, as this mobile thing is going crazy.
Then the business model had to change, as the supply of new customers ran out, and operators in mature markets realised that stealing each other’s customers with cheaper and cheaper deals was no good for anyone. There was also an explosion of what you might call user touchpoints – many more services available, smarter devices, different channels to the user (call centre, text, email, online and paper) and a lot more that could go wrong, or right. Allied to this, customers got a bit more powerful, or at least visibly more powerful.
So the focus shifted to trying to act a bit smarter. What was needed was the ability to display an understanding of what customers required, in service quality and in interactions with the operator, so that customers themselves became advocates for the business. That way, you would spend less on customer acquisition (free handsets, cheap deals), less on customer rentention (more free handsets, more cheap deals) as your customers became, in general, more loyal.
The problem is that operators were told, “To do this you need real time data discovery and analysis on a per-customer basis, not on a per-service level. You need to then turn that data into actionable business intelligence by teams that have the facts at their finger tips, the phone manners of an angel and the business savvy of a Harvard MBA.” (well, perhaps not a Harvard MBA, but you get the point)
Ah. We can’t possibly do all that for all our customers, operators say. It will cost a fortune. Can we perhaps just do it for a few, high value, customers? Sure, came back the experts. But who are your high value customers? Are they the highest revenue generators, the highest margin customers, or the biggest influencers – the mouthy social network types who can amplify perception of your brand for better or worse? We need to deep dive into customer metrics, associate that with social network analysis, provide highly segmented customer profiles for you, so you can respond accordingly with offers and services and perhaps even prioritised service levels. You need to understand micro-segmentation, personalisation, customer self-service and advocacy.
Jeepers, says the operator. This is harder than I thought.
It is hard, isn’t it. Poor you. But there’s more. You need to create, appoint or invent a CEM champion to work horizontally across your business, to turn all of your employees into CEM champions. You need to work holistically, organically, proactively, vertically and horizontally, change your entire working culture. Then you stand a chance.
OK, said the operator. Let me come back to you on that one.
So what’s to be done? Well, gradually, the technical issues can be resolved. The technical issues, where too much data swills around and the data you do want is hard to identify and share, were born as a result of the cultural mindset of the operator. Once the culture changes, then the technology will change too. It’s not easy, it requires a gradual and long term transformation of the OSS and BSS functions, but it can be done. Information can flow more easily around the organisation, and it can be presented in a more meaningful manner to customer service, product management and marketing teams. We can even listen to the customer. We can invest in customer support, and use new (two-way) channels to communicate with the customer.
This can all be done. It’s just that, although operators know where they want to get to, truly they wouldn’t start from here.
Keith Dyer
Editor
Mobile Europe
LINKS:
http://mobileeurope.co.uk/news/blog/8697-four-reasons-why-operators-should-focus-on-innovation-instead-of-blocking-ip-services
http://mobileeurope.co.uk/news/news-anaylsis/8686-mobile-money-network-looks-to-operators-to-scale-mobile-retail-service
http://mobileeurope.co.uk/news/news-anaylsis/8682-newbay-puts-operators-on-notice-over-notifications
http://mobileeurope.co.uk/news/press-wire/8691-operators-in-western-europe-emerge-from-recession-but-those-in-eastern-europe-continue-to-struggle-says-report
http://mobileeurope.co.uk/news/press-wire/8681-telefonica-and-microsoft-bring-bluevia-to-net-framework-