Customer Experience – The Final Frontier

Day one of a well-attended OSS-BSS World Summit in London, and the talk is all about customers. Networks, even handsets, are little mentioned, and bandwidth and bytes seem like yesterday’s unhealthy obsessions—the customer experience is now paramount, and henceforward, all shall be customer-centric.

Fine words and, many would argue, not before time—but what does it all mean in practise?

It could mean, as Charlie Hunter-Schyff, new media planning head of O2 demonstrated, applying analytics to location information to derive better-focused customer promotions. It could mean more sophisticated blending of policy control and charging functions to create a finer-tuned customer experience—an approach championed by Comptel. Less thrillingly, but perhaps more realistically, it could just mean, as indicated by Matthew Mason, director of billing and collections at Du in Dubai, and a compelling speaker, getting your act together in pretty much every department and making sure every process from order fulfillment through trouble ticketing to billing is as slick, faultless and efficient as it can be. That, after all, is what makes a customer perceive a company as excellent, and what makes customers stick around, spend money and even promote you to their friends. Perhaps this is the difference between having a customer-centric organisation and applying customer experience management (CEM).

What does it mean to software vendors? Really, it means that for any product or solution—not just CEM products—to be taken seriously, they need to be couched increasingly in the context of the customer experience. Does my fulfillment deliver a slicker, more faultless and trouble-free experience for my customer? Does my charging platform allow customers the payment options they appreciate? Is my policy control focused on the network or on my customers? Do all of these functions act together to allow me the holy grail of customer management, a ‘holistic’ customer view which pulls together customer information from CRM to HLR and lets me provide a wholly personalised service?

There is a compelling sense of real possibility around the customer, as Susan McNeice from Yankee Group observed in a speech at the end of the day. This feels like a real tipping point in industry attitudes and behaviour. Many communications service providers are genuinely and rightly excited by the prospect of turning to their advantage a customer understanding which would be the envy of most OTT players, and using it to create a value proposition for which the customer would be willing to pay a premium. They are sensing the possibilities—and now is the time for vendors to step up to the plate and demonstrate how they can be realised.

Customer Experience Takes Centre Stage at the Comptel User Group

We began the 2011 Comptel User Group yesterday with our second annual OSS/BSS industry analyst day. As I previously mentioned, customer experience was a major theme within each of the presentations.

Our CEO, Juhani Hintikka, first explored the concept of data as the new oil—operators haven’t tapped the potential of subscribers’ information, he explained. In order to create customer loyalty and, at the same time, derive new sources of revenue, they need to exploit every event or transaction in a customer’s lifecycle (without compromising privacy) in order to gain critical insight and take proper action in real time.

Greg Scullard from Comptel’s CTO Office took this thinking a step further. Operators have largely focused on processing orders without developing real relationships with customers. But, as he noted, time is of the essence, and it’s the details that are paramount to winning customers’ hearts, minds and wallets. Operators should instead make analysing subscribers’ behaviours a priority; by doing so, they can find a way to interact with customers much earlier than points of sale, proactively ease their frustrations and prevent churn.

Whether speaking about next-generation fulfillment, the evolution of mediation and charging, or the potential of these two core Comptel areas when combined (e.g. dynamic SIM management), the leadership team proved that operators really need to think about OSS as an integral component to improving the customer experience and enabling their businesses.

Overall, the day’s conversations on customer experience were informative and lively, and industry analyst feedback on our corporate strategy and technology vision was positive. We look forward to building on the discussions today with our customer and partner presentations, and tomorrow with several interactive roundtable sessions.

Welcome to the 14th Annual Comptel User Group

It seems like we were just in Windsor … but the 14^th annual Comptel User Group is now upon us!

This year, our contact forum for customers, partners and industry analysts is being held in Espoo (near our global headquarters in Helsinki), Finland. Participants can look forward to networking with Comptel’s executive management, our catalog-driven fulfillment, dynamic SIM management, mediation, charging and policy control experts, and each other like in years past.

Focusing on the theme of customer experience, the event will feature a corporate strategy overview from CEO Juhani Hintikka, followed by a live Comptel Dynamic OSS demonstration led by CTO Gareth Senior. Communications service provider customers, including DNA Finland, Telenor Norway, Net Brazil and Claro Peru, will present, and a keynote from partner IBM will cover smarter communications through data analytics.

And once again, we will moderate an interactive session with panelists from partners Cisco and Alcatel-Lucent. The Q&A will explore the changing face of the customer experience, the critical role of OSS, and how network and other data can be translated into new revenue opportunities for operators.

As always, we invite both those attending and those unable to make the event to participate in discussions on “The Dynamics of OSS”—and to kick things off, show us how much you know about this year’s Comptel User Group location. Write your answers to these trivia questions in the comment section below.

When was Helsinki founded?

In what year were the Olympic Games held in Helsinki?

In what year was Helsinki a European City of Culture?

What is the number of the tram that is also known as the City Tram?

Around the World

Trak.in…
Mobile Handset Market in India to Witness Tremendous Growth in Next Five Years [Report]
Aseem blogged about a recent Frost & Sullivan report, which looks at the Indian mobile handset market and the country’s expected mobile market growth within the next five years.  According to analysts, India has reached the coveted position of the second largest mobile handset market in the world after China—it’s expected to become even bigger with 208.4 million phones being shipped by 2016 at a CAGR of 11.4% between the period of 2010 – 2016.

Aseem’s post stuck out to us because Olivier Suard touched on a similar topic a few weeks back.  One particularly interesting fact he noted—last year, India had about 68 mobile handset players, and if Frost & Sullivan’s predications are accurate, it will skyrocket to more than 200!  If this is indeed the case, further competition and the squeezing of profit margins will take place—and OSS can have a major play.

With the proliferation of Web 2.0 and Internet surfing, the use of smartphones is expected to rise in India.  But during subscribers’ switch from ‘dumb phones’ to smartphones, it’s important to maintain a high quality of experience.  For instance, customers using basic handhelds should have the option to select which services they want during activation, and those surfing the web on their mobiles shouldn’t experience slow speeds due to network congestion.

Connected Planet…
Pricing ‘Sweet Spot’ Still Eludes Carriers
BSS/OSS reporter Susana Schwartz discusses the disconnect that has emerged between carriers and customers when it comes to pricing wireless and wireline data services.  Customers are bitter towards the new usage caps and overage fees they feel are being forced by AT&T and other communications service providers (CSPs).  The timing of Susana’s piece comes on the heels of recent stories on customers claiming that their data usage is off.  While the percentage of users generating high data traffic is fairly small, it’s still necessary for operators to figure out—sooner rather than later—how to target those customers with these caps without ‘punishing’ the greater whole of their user base.

Susana points out that there’s no confusion in the messaging about 4G and LTE investments, but relatively little is said about the changes in OSS/BSS environments to ensure services are fulfilled, assured and billed in the most optimal way possible.  If carriers manage to translate this into more consumer-friendly terms—and that provisioning, billing and customer-care systems are more accurate and robust—then perhaps there wouldn’t be so much distrust on the accuracy of the metering of usage and the consequences in terms of caps and overage charges.

Usage-based pricing seems to be the ‘sweet spot’ for operators—taking the approach “you get what you pay for”.  Policy and charging control can accurately identify these customers and the services they consume and bill them appropriately.

TM Forum’s Inside Leadership…
Predictions for 2011: Environmental Drivers of Communications Trends
Rob Rich, managing director of TM Forum Insights Research, shared some global communications trends and predictions for 2011.   He notes that, in general, the growth of communications services is connected to the state of the global economy—and thankfully, the Organisation for Economic Cooperation and Development reported good news for this year; the global economy is expected to expand 4.2 percent.  China and India are expected to lead the larger economies in growth, by approximately 9%and 8%, respectively.  However, developed economies are not expected to perform as well, with the U.S. expected to achieve an increase of 2.2 percent, Japan a rate of 2 percent and the European Union slightly less than 2 percent.

After evaluating the global trends, Rob made some communications industry predictions for 2011—here is a sampling of the ones that struck us:

• The margin crunch intensifies—fixed line revenues, including for data, are under pressure, and the rapid growth of mobile broadband won’t bring additional revenues, but will continue to require massive investment in network capacity.  Arguably, CSPs’ greatest opportunity is in acting as enabler for other parties in the value chain. In the short term, there is no quick fix.

• Cloud services approach the mainstream—there’s lots of activity in this area with different companies investing in data centers, computing infrastructure, software platforms and much more.  Only some will see true success, and the Forum expects to see rationalisation during 2011.  They predict the sweet spots will be small- and medium-sized businesses, emerging markets and Software as a Service.  In addition, enterprises will be forced towards the adoption of cloud by financial considerations.

• Data management and analytics become critical competencies—communications is one of the world’s most data intensive businesses, but the timely and effective use of this data is behind many other industries—a situation that needs to be addressed.  The customer experience can be greatly improved with data management and analytics. This has many benefits including increased revenue, enhanced brand reputation, reduced churn and the extension of the CSP’s role across the value chain. This is especially true when the information is ready in real time. CSPs need to start by figuring out where the biggest payback will be and go from there.

TM Forum members may read the full version of this Quick Insights report on the association’s website.

Around the World

Cellular News…
Mobile Network Operators Need New Approaches to Make Data Profitable
Editor Ian Mansfield covered a recent Ovum report, Making a Profit from Mobile Broadband Data, which looks at why mobile network operators (MNOs) need to find a smarter approach for managing their networks and charging for data usage.  The report explains that MNOs need to use customer data held in the BSS with policy management and controls in order to manage soaring traffic loads, drive profits, personalise the customer experience and increase their agility and response times.  Clare McCarthy, the author of the report, noted that, “some MNOs have already adopted plans with options such as discounted evening and weekend use or monthly data caps.  However, this approach doesn’t go far enough and only addresses one part of the equation.  It doesn’t maximise revenue potential with high-value customers.”

This is a similar point Bob Machin raised after attending Informa’s Broadband Traffic Management event back in November—the industry has been steadily moving from Policy Control 1.0 to Policy Control 2.0, with the first wave dominated by the need to control (and indeed deter) the use of data services, and the second taking a much more liberal approach which encourages data usage, but aims to flatten out peaks and troughs in demand, spreading usage more evenly across networks, geographies and time spans to allow a much better return.

TM Forum: Revenue Management Community…
Minutes, Seconds – Who’s Counting?
Tony Poulos, BSS strategist and evangelist for TM Forum, blogged on Telstra’s recent move from 30-second billing blocks to one-minute billing blocks.  While the communications service provider (CSP) says this move will bring the company in line with industry standards (and analysts have noted that Telstra will reap tens of millions in revenue from the change), consumer groups are unsurprisingly opposed. They are saying that it will make phone calls more expensive, and that the industry could easily charge in smaller time blocks.  As Tony points out, CSPs generally aspire to one-second billing, and this was pretty much the world standard. From a BSS/OSS perspective, this move is certainly a surprise, as more CSPs are looking to charge in real time and offer more advanced and flexible pricing models to optimise subscribers’ experiences.  What are your thoughts on Telstra’s move?

Light Reading…
Many India Lines Inactive, Finds Regulator
India editor Gagandeep Kaur reported on recent data from the Telecom Regulatory Authority of India and Visitor Location Register, which found that 222.52 million lines (nearly 29%) of the total mobile phone lines (771.18 million) are inactive.  There are a lot of pre-paid numbers that have been activated but used only for a certain amount of time; users likely activate new numbers either with the same CSP or a rival.  In January 2011, Bharti Airtel added 3.3 million new mobile lines to reach a total of 155.8 million—giving the CSP a 20.2 percent share of the mobile market; while Reliance added 3.2 million to reach a total of 128.9 million—giving it a 16.7 percent market share.  The only operator that recorded a reduction from its subscriber base was Videocon Telecommunications; this is believed to be the result of subscriber churn following the introduction of mobile number portability, which was introduced earlier this year.  It will be interesting to see how these figures shape out throughout 2011, particularly because SIM management will play a larger role in CSPs’ OSSs and as India’s wireless subscriber base continues to grow.

Consumer Research Confirms Importance of Policy and Charging Control to Operators

Mobile broadband has become a part of everyday life, and with so many people depending on—and demanding for—mobile connectivity, we at Comptel wanted to explore consumers’ evolving relationship with providers of mobile broadband services and their levels of satisfaction with operators’ service and price plans and flexibility.

Last month, we commissioned independent research firm Vanson Bourne to survey 2,000 consumers from across the United Kingdom, France, Germany and United States, and found that mobile broadband users are now ready and willing to pay for a higher quality of experience (QoE).  Seventy-four percent of respondents who are willing to pay for a higher QoE said that they are prepared to spend more money just for faster download speeds.

Which of the following would you be willing to pay more for?

And, 61 percent indicated that they want their CSPs to offer more personalized yet simpler service plans, such as having pricing based on individual usage habits while getting just one bill for all Internet and broadband services.

Would you like to see your CSP offer service and price plans that are simpler and bespoke?

Further to this, 87 percent of consumers see QoE as a key driver that will influence their allegiance to their CSP, and the majority of them would not only move but also pay more money for faster and personalized services.

Is a high QoE a key driver for you when it comes to changing CSPs?

In today’s highly competitive market, providing high QoE could be the most powerful mechanism for gaining or even just keeping customers—and the demand for a better mobile broadband experience presents a major revenue opportunity for CSPs.

Policy control and charging is key for operators to capitalize on consumers’ demand for faster download speeds and more personalized yet simpler service plans.  It can help them optimise QoE by smoothing data usage more evenly across their networks, while dynamically adapting and simplifying service bundles based on individual customers’ wants or needs, and introducing progressive pricing strategies that monetise this consumer demand.

Full copies of this research report will be available at the Comptel’s booth at Mobile World Congress (14-17 February in Barcelona ) in Hall 1 at Stand 1C06—be sure to stop by and say hello!

Mobile Broadband Billing or Charging: Where’s the Market Headed?

By: Dan Baker, Research Director, Technology Research Institute

Call it the big payments divide.  Depending on what country of the world an operator is in, it will favor one or two mobile broadband payment models—either a prepaid / charging or a postpaid billing / contract.

But what’s the trend?  Will the saturated mobile markets, like the U.S. that favor the post-paid billing model, adopt more on-line charging for smartphones?  Likewise, when operators in developing telecom markets like India adopt smartphones in a big way, will they launch mobile broadband services using a prepaid, postpaid or hybrid payment approach?

Since this is a big strategic issue for folks in the billing department, it’s worth laying out the advantages of the approaches.

The Advantages of Billing

Market success – A billing contract for all-you-can-eat data has been a winning formula for AT&T with the iPhone.

Contract-based sales – A subscription contract locks your customer into a long-term relationship that you can cultivate, renew and upsell against.

The magic of the word “free”– Customers instinctively feel that they are getting a better deal when network usage can be sold as essentially free (even though there are certain restrictions written in fine print).

Actual charges are out of sight and often out of mind – If you’re trying to promote mobile broadband as an addicting habit, having a billed plan is convenient because the user worries less about the ultimate charges.

An annuity the customer budgets for – Paying a certain fixed rate per month is something a customer budgets for, and it becomes an annuity for the operator.

Simplicity – Batch billing is technologically simpler than setting up network-based charging.

The Advantages of Charging

It’s how we buy things – Charging matches the way we live. If you want to buy content, it’s a simple matter of ordering it and paying down an on-line balance.  There’s no mystery over what the actual cost will be.  With charging, you always get a “receipt” for your purchase.

Convenience and impulse buys – We live in a world of convenience purchases.  If you, as an operator, don’t make it easy for subscribers to charge things on the spot, you may be losing wallet share to over-the-top providers.

Bill shock – With a charging platform, bill shock becomes a mute issue because your customers can constantly track their purchases. This, of course, is further enhanced with policy control, which enables operators to inform the customer when certain limits are reached as required by the EU’s roaming cost control legislation).

Expense control – Charging becomes a convenient way to control your expenses, especially if your teenager is addicted to buying music.

Broadens the market – Not everybody qualifies to get a bill.  Plus, a user’s low usage may make billing an impractical option from the operator’s point of view.   In addition, you can offer service to teenagers and other high-risk user groups that the billing model can’t support at all.

Avoid bad debts – Charging eliminates one of the biggest operator headaches—collections, the losses and big expense required to chase down subscribers who don’t pay and outright fraudsters who had no intention of paying in the first place.

* * *

So which way are we headed?  Toward more charging or more billing?

I think mobile operators will mix these strategies quite a bit in the year ahead.

Business customers will certainly favor billing because it’s what they’re accustomed to.  Yet every business customer sees the value of being able to charge for something out of the ordinary.  Maybe the business traveler wants to upgrade his airline seat on-the-spot or buy a meal on the plane.  Charging that by swiping a handset becomes an attractive choice.

And we’ve yet to see all of the innovative apps that real-time charging and network policy control will give birth to.  Ordering high QoS to see a television show in HD is a simple example.  Thousands of other apps are on the drawing boards until LTE comes and charging/policy control technology matures in the network.

I predict that the countries with saturated mobile markets will move slowly but steadily towards more real-time charging—or billing and charging running in parallel.  The fuss over “network neutrality” will get neutralized as people realize you can’t operate a first-class mobile network without controlling the five percent or so of bandwidth hogs who are spoiling the QoS for everybody else.

Billing or charging?  You need both in your payments portfolio.

Dan Baker is the research director of analyst firm Technology Research Institute, or TRI, which has recently launched a new community website, the Revenue Assurance Roundtable.  Since 1994, Baker has authored dozens of research studies in the BSS/OSS market.  He contributes articles to VanillaPlus and writes a regular column for Billing & OSS World called Dan Baker Blog.

AT&T: Taking Charge of Its Mobile Broadband Services?

While I was painting something in my garage (and waiting for it to dry) this past week, I was surfing the Web on my E90 Communicator and reading about AT&T’s recent announcement.  I think the communications service provider’s (CSP) move to pricing ‘bucket plans’ for its mobile broadband offerings is a very interesting one—compelling me to write a blog post…

What AT&T announced was that consumers with smartphones can choose a DataPlus package, pay USD $15 a month and get to download 200 MB of data.  They will also receive a notification when they near the quota limit and a warning about additional charges for exceeding the 200 MB.  Alternatively, consumers can go with the CSP’s DataPro package, pay USD $25 a month and get to download 2 GB of data.  Otherwise, this package principally works in the same way as the former.

After digesting this a bit, I saw many similarities between these plans—with a monthly subscription, an online quota management and a selective bucket, extra usage pay as more is charged and a notification of nearing the quota—and the type of capabilities offered by Comptel Control and Charge, which are currently being explored by CSPs worldwide.  But that’s not all… With Comptel’s solution, CSPs can, for example, offer fixed-mobile convergent quotas and service-specific quotas or exclusions, such as streaming music or downloading it from iTunes or Spotify, so that it does not consume the entire limit.

It is becoming more and more evident that ‘all-you-can-eat’ types of mobile broadband propositions are being converted into something more value-based and limited.  Although the limit may be large—like AT&T’s offering, where 200 MB is enough for 65% of users and only 2% exceed 2 GB—it is still there, preventing excessive usage or charging for high usage, and thus either creating new revenue opportunities or limiting (and guiding) customers’ behaviours in some way.

AT&T’s case is not the only example around, but it seems to be quite clearly well-defined and focused on a classic issue associated with mobile broadband.  I think it is a fairly fair policy and definitely a case where the CSP is taking charge of its services.

A Dynamic Customer Experience: Going Beyond CRM

Back in 2006, Comptel developed its vision of the Comptel Dynamic OSS. This wasn’t just a piece of marketing spin—there was real substance behind the concept. What we realized was that we were on the midst of a major shift in telecom software, and that Comptel was in quite a unique position.

At that time, customer experience management was becoming a key differentiator, but much of the focus of communication service providers (CSPs) until then was on bringing in self-care and a better CRM. What we recognized was that one of the key aspects of the customer experience was happening below that glossy surface. With customers, consumers or businesses, increasingly wanting things “now!”, it was essential for CSPs to be able to create and tailor both services and charging plans to suit their needs. And, that called for dynamic, real-time fulfillment and charging capabilities closely linked with customer-centric data repositories. (Hey, that is exactly the area of business that Comptel specializes in!)

Fast forward to 2010—now customer experience is at the centre stage.

At Management World 2010 in Nice, there was much talk about policy management, for example.  What is policy management when you think about it? At its core, it’s about being able to deliver personalized services and charging plans dynamically to customers. And, that requires dynamic policy control and charging solutions coupled with customer-centric information—like Comptel Control and Charge.

Another example of the need for customer-centric, dynamic OSS is SIM management. Although you’d think the issues around dynamic resource management would have been solved ages ago, they’re not. We launched Comptel Dynamic SIM Management in February 2010 at Mobile World Congress in Barcelona to address the issue created by the pre-provisioning model. The idea is to completely transform the process into a just-in-time one. This enables CSPs principally to unbundle their prepaid (or postpaid) commercial proposition from the SIM card and all related assets, until the service is actually acquired and activated by the subscriber. This way, we lower the cost to acquire a customer substantially, and we also provide the ability to launch new services or campaigns to market much faster, as the ‘product package’ is dynamically allocated at the time of activation. Think of it as a means to run campaigns per any and every day, as SIM card packages no longer define the campaign offering! Also think of the “first use experience and personalization” you are able to offer with this new type of activation process!  Once again, it’s about dynamic OSS components working closely with customer-centric information.

Solutions like Comptel Control and Charge and Comptel Dynamic SIM Management are key ingredients and very vital parts of CSPs’ strategies in being able to ensure the best, differentiated customer experience, while lowering costs and increasing revenues.

With Management World Americas 2010 on the horizon and the future ahead of us, it will be interesting to see what will be the next ‘dynamic’ solution that will enable CSPs to reach the next level and offer an improved customer experience! We’d like to hear your thoughts on what it could or should be…