Euro Comms Q1 2012

@eurocomms www.eurocomms.
com
european
COMMUNICATIONS
Q1 2012 ISSUE | OPERATOR STRATEGY | BACK OFFICE | NETWORKS | CONTENT & SERVICES
Exclusive interview with BT Group CIO Clive Selley
Special report featuring exclusive survey results
What consumers really want in 2012
How to seamlessly integrate social media
Design the ultimate customer experience strategy
C
ustom
er
E
xperience
SPECIAL ISSUE
Operator Strategy
04 EU news round-up Quarterly dispatch from
Brussels
06 Groupe Iliad launches Free Mobile in
France A new mobile operator looks set to shake
up the market
08 Technology risks rising up the global
agenda, says World Economic Forum New
repor t provides telcos with strategic food for
thought
10 Worldwide telco stocks on the up Share
prices at telcos across the globe finished in the
black in Q4
Special Report
Customer Experience
22 Survey Results of our exclusive customer
experience sur vey
32 Analyst v operator What should be done to
improve customer experience?
35 What do customers really want in 2012?
New data reveal consumer priorities for the next
12 months
40 Designing a strategic blueprint for
customer experience Customer loyalty has
never been operators' strong point
42 Closing the customer service loop
Operators must incorporate social media platforms
44 Blurring the retail and enterprise
boundaries Should operators be rethinking the
way in which they treat their customer segments?
50 Understanding customer experience
seminar Review of our Januar y event
Back Office
53 2012: the back office moves forward This
year should see operators back of fice systems
finally get given the attention they need
54 Mobile Security: must do better What
more should operators be doing?
Networks
57 Can we predict the network of the
future? The New Year heralds the usual array of
predictions but will they come true?
58 How do you solve a problem like rural
broadband? Finding an answer to the
urban/rural digital divide
Content & Services
61 First coming of the second screen How
can operators profit from this growing second
screen?
62 X marks the spot, but LBS will not
provide a treasure-trove Location-based
ser vices may not boost operator revenues
Back Page
64 Sun sets on T-Mobile USA sale
Contents
12 Cover Story: Clive Selley
BT Group CIO Clive Selley tells Marc Smith
how the company is tackling the tricky issue
of customer experience
Editor
Marc Smith
marc.smith@eurocomms.com
T: +44 (0) 207 933 8979
Twitter: @eurocomms
Back office section editor:
Sue Tabbitt
sue.tabbitt@gmail.com
Networks section editor:
Priscilla Awde
prawde@googlemail.com
Content & Services section editor:
Ian Grant
ianrbi@gmail.com
Publisher
Justyn Gidley
Justyn.gidley@eurocomms.com
+44 (0) 207 933 8979
Publishing Director
Chris Cooke
Senior Circulation & Marketing
Manager
Louise Nicholls
subscriptions@eurocomms.com
Design
Alex Goldwater
Subscriptions/Circulation
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European Communications is published
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London EC4R 0BL
Customer experience: its time to act
Welcome to our special customer experience issue. There are many topics fighting for
prominence at the top of senior managers agendas currently; customer experience is just one,
but getting it right is one of the most important topics of conversations that should be
happening in the boardrooms of operators across the continent.
Worryingly, as we report in our exclusive readership survey, this does not appear to be
happening in a significant number of cases just 12 percent of respondents said C-suite
executives are leading the customer experience agenda, while eight percent said no one was
leading it at all.
If this is true, then it is truly troubling and does not bode well for the future of the industry.
If leaders are discussing it then they are not communicating it to their staff.
Either way the result could be catastrophic. Now is the time to act and if you havent woken
up to the fact that providing a best-in-class customer experience is as key as providing a best-in-
class network then you are presiding over the terminal decline of your business.
Fortunately, help is at hand from some of the biggest and best. Clive Selley is group CIO of
BT and nails his colours firmly to the mast this issues feature interview. The customer
experience is a basic building block of what we do, he told us.
Of course, its not an exact science and there are many different ways to approach it.
Fundamentally, however, it is time to act, as Selley points out: The future presents several
challenges and the winners will be those who deeply understand their customers.
To help you along the path to providing a better experience to your customers we have
looked at the subject from a number of different angles: what do customers want, how
should you implement a strategy across a complex business and what can you do to ensure a
seamless experience in-store, on the phone, online and across social media. The tools are
there, the time to act is now.
BlackBerry diaries: part II
As I started my first issue last time out by outlining how my new BlackBerry smartphone was
changing my habits, I thought it could be an interesting experiment to diarise how this is
continuing particularly as I got some things very wrong!
I wrote how monetizing data wouldnt be easy unless I was made to pay more explicitly for
data. However, sending picture messages is one way they have made money from me in the
first couple of months.
Consequently, my no use for apps such as WhatsApp sentiment went out the window as I
realized I could send picture messages via this service free-of-charge.
This neatly encapsulates the problems operators face and would hasten a discussion with
WhatsApp about revenue sharing. Perhaps this is something new RiM president and CEO
Thorsten Heins could look into.
02 | european communications | eurocomms.com
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OPERATOR STRATEGY
EU news round-up
KEITH NUTHALL PRESENTS HIS QUARTERLY DISPATCH FROM BRUSSELS, WHICH THIS ISSUE
FEATURES ROAMING, DATA PROTECTION AND MUCH MORE
European Parliament wants tougher
action on roaming charges
The European Commission is coming
under pressure to toughen its action
against high mobile roaming charges, as
its latest proposals are debated at the
European Parliament.
MEPs want the Commission to go
further in its action to foist more
competition on the roaming market while
capping bills. Proposals being drafted by
the parliaments coordinator (rapporteur)
on the subject, the German Christian
Democrat Angelika Niebler, have
suggested requiring telcos to offer clients
domestic and international roaming
services separately, so they can choose
a different supplier for international calls
from July 2014. She also has plans for
tighter caps on retail and wholesale
roaming prices from this July (2012).
The situation is disappointing. The high
level of voice, SMS and data roaming
prices payable by users is a matter of
concern, said Niebler.
This followed centre-right Polish Civic
Forum MEP Roza Thun staging a
hearing on the issue in Brussels,
where she said the difference between
domestic and international rates
remained huge. At a parliamentary
debate, she added: The rise of the
smartphone and our increasing
reliance on laptops and tablets, plus
cloud-based software applications that
need an internet connection, means
many of us still find ourselves
hostages to high wifi and roaming
charges.
The difference
between domestic and
international rates
remained huge
OPERATOR STRATEGY
eurocomms.com | european communications | 05
Data protection rules set for overhaul
The European Commission has proposed
a comprehensive reform of the EU's
1995 data protection rules, aiming to
strengthen online privacy and boost
Europe's digital economy. The aim is to
simplify EU laws in the area, while
strengthening privacy regulators. Instead
of burdensome registrations, companies
would have a duty to quickly inform data
commissioners of serious breaches of
privacy, ideally within one day. And if they
failed to protect personal data,
commissioners could fine them heavily
levying penalties of up to 1 million or
up to two percent of the global annual
turnover of a company. The proposals
would give consumers and businesses
easier access to their own digital data
and ensure they could transfer personal
data from one service provider to another
more easily. This will improve
competition among services, said a
Commission note.
Separately, a legal case brought by the
European Commission against the British
government has been closed after
Brussels ruled reforms had brought the
UK in line with privacy and data
protection regarding confidentiality of
email or Internet browsing. The legal
action had been launched in 2009 over
investigative techniques used by the UK
Information Commissioners Office and
British police, who were accused of
breaking EU law by when intercepting
electronic communications during
inquiries. Facing a case at the European
Court of Justice, the UK amended its
national laws to ban such action without
a consumers explicit consent. London
also established an additional
supervisory mechanism, backed with
penalties, to deal with breaches of
confidentiality in electronic
communications administered by an
Interception of Communications
Commissioner (ICC).
Online business requires shake up
A new European Commission e-
commerce policy paper has said that
despite all the efforts of governments
and the EU to foster growth in online
business, this key economic sector is
still being hampered by serious long-
standing problems. These include
shortages in legal cross-border online
business supplies; inadequate
information about international
ecommerce; weak consumer protection;
inefficient deliveries and payments;
illegal content and cybercrime. Brussels
argues by tackling these issues, e-
commerce and online services could
generate up to 20 percent of EU
additional employment and growth over
the next five years.
Radio spectrum reform gets go ahead
The EU Council of Ministers has backed
European Commission proposals to
reform the use of the radio spectrum in
Europe so that wireless electronic
communication broadband services
secure sufficient bandwidth to succour
their growth. This would be achieved
through the identification by 2015 of at
least 1200 MHz of spectrum available
for re-allocation by 2015. The aim, said a
council communique, was fostering
access to broadband at a speed of not
less than 30 Mbps by 2020 for all EU
citizens. The European Parliament
should vote on the plans by the end of
February.
Telco R&D given funding boost
A major pot of money will be available
for R&D-oriented telecommunications
companies via the EU from 2014 to
2020, because of its planned Horizon
2020 research programme. Funding
cross-border collaborative projects,
under the proposals from the
European Commission, there would be
8.97 billion earmarked for
information and communication
technologies projects. Of this, 1.7
billion for photonics and micro-and
nanoelectronics; 4.29 billion for
nanotechnologies, advanced materials
and advanced manufacturing and
processing studies; 575 million for
biotechnology; and 1.73 billion for
space-related projects.
Metelem gets backing for acquisition
The European Bank for Reconstruction
& Development (EBRD) has been
planning to back Cyprus-incorporated
Metelem Holding Company Limited in its
bid to acquire Polkomtel, one of
Polands top three mobile telephone
companies, which is being privatised.
The EBRD had planned to invest 200
million in equity into the company,
because it saw strong merit in the
strategy of the buyer, said a bank
memorandum.
Legal threat to Greece
The European Commission has
threatened Greece with legal action,
potentially at the European Court of
Justice, claiming it has failed to comply
with EU telecommunications
liberalisation laws by not helping telcos
install facilities such as ducts,
manholes, masts or antennae. The EU
has detailed legislation on member
states duties regarding this work, and
these guarantees are not in place in
Greece. This failure has hampered the
development of broadband internet,
said the Commission, pointing out
Greeces fixed broadband take-up was
just 19.9 percent of the population
compared to 26.6 percent across the
EU; 2.6 percent for mobile broadband
take-up compared to the EUs 7.2
percent; and 41.2 percent of Greek
households have a broadband
subscription compared to 60.8 percent
across the EU. ec
OPERATOR STRATEGY
Groupe Iliad launches
Free Mobile in France
A NEW MOBILE OPERATOR LOOKS SET TO SHAKE UP THE MARKET
France-based telco Groupe Iliad launched
Free Mobile in early January.
The company becomes the countrys
fourth major mobile operator and is the
latest subsidiary of the group founded by
entrepreneur Xavier Niel in 1991.
Free Mobiles low-cost model which
starts at just 2 a month aims to
disrupt the French mobile market in the
same way thats its Freebox triple-play
fixed line, broadband and TV offering did
in 2009.
Free Mobile launched with two main
tariffs, which are guaranteed for the first
three million subscribers:
2 a month for 60 minutes and 60
SMS, which Free claimed was four
times cheaper than the least
expensive offer available on the
market at launch.
19.99 a month for unlimited calls,
SMS, MMS and internet.
For Freebox subscribers, the 60+60
tariff is offered free of charge, while the
unlimited tariff falls to 15.99.
Many existing Freebox customers will
be seriously contemplating a switch to its
new headline-grabbing mobile launch
tariff, commented Ovums Charlie
Davies.
Free Mobile is not offering phones as
part of their tariffs, but a range is
available to buy on their website. It was
offering, for example, the iPhone 4S for
just 1 for those customers who sign up
for a 36 month contract.
Iliad CEO Maxime Lombardini said
giving Free customers access to the
iPhone is certain to shake up the
French mobile market."
Iliad first acquired spectrum in January
2010 and has since been building out a
3G network to over 5,000 sites.
Supplementary network coverage is
provided by a national 2G and 3G
roaming agreement with Orange.
In September 2011 it acquired a 4G
license from Frances regulator ARCEP,
which audited its network two months
later to confirm that it exceeded the
minimum 25 percent population coverage
needed to offer the service commercially.
Unlike many new mobile entrants, Free
Mobile already has a significant installed
base and considerable brand cachet,
said Analysys Masons Stephen Sale.
At the end of Q3 2011, it had nearly
4.8 million fixed broadband subscribers
and a 22 percent market share.
The French market has not
experienced the reduction in mobile
pricing that has occurred in most
countries in recent years, added Sale.
There is sure to be a short-term impact
on churn as customers switch to Iliad, as
well as a long-term decrease in pricing
levels.
Nevertheless, Sale said the move was
not risk free: It is gambling on a flat-rate
tariff structure that it believes to be more
in tune with the consumers perceptions
of value.
Interestingly, he also pointed to the
impact that Freeboxs WiFi-enabled set-
top devices could have.
In the past few years, Iliad has
established a large footprint for mobile
data a free Wi-Fi cloud in the urban
centres of France. This illustrates the
view that mobile data consumption relies
heavily on WLAN and will do so even
more in the future.
Concluded Davies: Free will certainly
grab a lot of subscribers initially. Its
challenge will be to maintain momentum
and push beyond an initial single digit
market share." ec
Free will certainly
grab a lot of subscribers
initially
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Nokia names new design
vice-president
Nokia has promoted Marko
Ahtisaari to executive vice-
president of design, the firm
has announced. He will
begin his new role from
February 1 and will report
directly to Stephen Elop.
MTS awarded wireless
LTE licence
The first licence to offer
wireless communication
services in the LTE standard
in Moscow and the local
region has been given to
MTS. A deadline of
December 29, 2013, has
been set for the company to
launch the LTE network,
with its licence expiring
three years later on
December 29, 2016.
'Good' year for telecoms industry
A new report has hailed 2011 as a good year for the
telecoms industry. Figures show that service provider
capex jumped by an estimated 12 percent.
Apple profits double in fourth quarter
Apple enjoyed a stellar end to 2011 by selling 37 million
iPhones in the final three months of the year to achieve
record results for the quarter. Sales of iPhones more than
doubled in the 14 weeks to December 31.
Tele2 hits the right notes
after decent 2011
Sweden-based operator
Tele2 said its top priority
was to offer customers less
for more in 2012 as it
announced revenue and
profit increases for the
previous quarter. Sales
between October and
December 2011 rose 8%.
Video: Understanding
Customer Experience event
Exclusive videos from
European Communications'
recent customer experience
seminar are now available
to view. Attendees at the
Understanding Customer
Experience event in
London on 18 January
saw four presentations
featuring operator
Openreach, market
research firm Kantar
Worldpanel and
management consultancies
Accenture and Infosys.
What could changes to EU
data protection rules mean
for telcos?
The EC put forward some
comprehensive reform to
data protection laws on
Wednesday that could have
profound implications for
telcos. The EC is
recommending a wide
range of proposals.
in
tro
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u
c
in
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u
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n
e
w
w
e
b
s
it
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LATEST NEWS
EXCLUSIVE FEATURES
eurocomms
Vodafone disappoints as
latest results show room
for improvement:
http://bit.ly/zcdk92
eurocomms
Most read story this week:
Videos from our Customer
Experience event featuring
Openreach, Amdocs,
Alcatel-Lucent & more
http://bit.ly/xkqVC3
eurocomms
Indian Supreme Court has
cancelled 122 2G licences
- effective in 4 months
time. What impact do you
think this will have on EU
operators?
eurocomms
Latest BT results deliver
profits on falling sales:
http://bit.ly/x8jXnU
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OPERATOR STRATEGY
Technology risks rising up the global
agenda, says World Economic Forum
NEW REPORT PROVIDES TELCOS WITH STRATEGIC FOOD FOR THOUGHT
The World Economic Forum has identified
critical systems failure and cyber attack
in the technology field as key risks to
global prosperity.
The WEFs seventh annual Global
Risks report, which surveyed nearly 500
world leaders from business, government
and academia, divides risk in five
categories: economic, environmental,
geopolitical, societal and technological.
Critical systems failure, defined in the
report as causing a breakdown in global
information infrastructure and networks,
was singled out because, should it
happen, it was seen as having the most
significant impact of all the technological
risks.
The threat of cyber attack state
sponsored/affiliated, criminal or terrorist
in nature was highlighted as one of the
five risks most likely to happen over the
next 10 years.
It is the first time since 2007 that a
technological risk has made it into the
top five. Cyber attack shared the limelight
with scenarios such as severe income
disparity, chronic fiscal imbalances and
rising greenhouse gas emissions.
Steve Wilson, chief risk officer at
General Insurance who presented the
technology risk findings, told European
Communications that greater awareness
allied to the increasing speed of
technology developments has led to a
technological risk rising up the rankings.
In addition, the vulnerability of the
supply of vital mineral resources and
data fraud and theft were highlighted as
key risks from a technology point of view,
which the report grouped together under
the ominous title of The Dark Side of
Connectivity.
The report found that the increasing
number of mobile devices, internet
connectivity and proliferation of the cloud
were creating a fear that crime, terrorism
and war could migrate from the physical
to the virtual world.
The authors of the report were keen to
point out that these were not predictions
of what would happen, but more
qualitative representations of what the
worlds great and good view to be
important discussions around risk.
Ultimately, they concluded a healthy
digital space was needed to ensure
stability in the world economy and
balance of power.
The question now is what telcos
should do with this information.
According to Wilson, telcos need to do
more to mitigate these risks. Telcos are
becoming more aware of the risks, but
they are not doing enough about them at
the current time, he said.
They need to understand the risks to
their customers better and, overall, look
at risk in a more holistic fashion, he
added.
As in many industries, the day-to-day
challenges and complexities of running a
telco mean some risks that do not
immediately impact the business do not
come top of the corporate agenda.
As Wilson noted, the communications
space has particular challenges due to
the pace of change the industry has to
work with.
Whats more, there is a reasonable
argument to suggest that some of the
wider risks, such as cyber attack, should
be the domain of governments and
regulators.
That being said, more can always be
done. Clearly, telcos do have a remit to
ensure networks are as secure as they
can be and as the crucial importance of
data becomes more evident to operators,
there is much more to be done in this
field.
The risks to the supply of vital
minerals is not a topic that has garnered
too much attention, but telcos would be
wise not to disregard this there is
something akin to an arms race to
secure precious metals happening out
there. ec
They need to
understand the risks to
their customers better
and, overall, look at risk
in a more holistic
fashion
OPERATOR STRATEGY
Portugal Telecom was the biggest faller in our
index of leading European operators during Q4.
Its stock fell 23.6 percent between October and
December 2011, which followed a decline of
19.8 percent in Q3.
Although the incumbent had not reported its
Q4 financial figures before European
Communications went to press, you do not have
to look far for the root cause of its problems.
In December, Moodys downgraded PTs
long-term credit rating commenting: Although
PT will sustain strong market positions, as a
result of the transformation of the business
model, and has been showing recently some
improvements in its underlying operating
performance, it does not have the
unquestionable domestic strength or the
geographic diversity to distance itself from the
current and future credit environment.
The following month, Standard & Poors
downgraded the credit rating of Portugal and
seven other European countries. Alongside
Cyprus, Portugals rating was cut to a "junk"
rating, indicating a very high level of risk for
lenders. Soon after, it announced it too was
downgrading PTs long-term rating.
Throughout all this, PTs management has
remained silent.
This is a shame as the company has
actually been quite innovative. As Moodys
itself noted, PT has invested heavily in future
proof technologies and its management has a
strong determination to execute its
transformation strategy.
Its YMN brand, the countrys largest mobile
phone operator, was revealed to be Portugals
most followed brand on Facebook, while meo,
PTs triple-play service, was voted Best
National Brand.
The problem is that, while it is perceived
well at home amid growing austerity, it is
suffering from being too reliant there. As
Portugals consumers cut back as the
economy falters, the operators international
portfolio does not inspire confidence.
Operations in Angola, Cape Verde and So
Tom and Prncipe are unlikely to send the
share price rocketing.
The honourable exception is Brazil, where PT
owns a variety of stakes in mobile, ISP and call
centre companies. It looks like much of PTs
fortunes could rest on growth there.
Portugal Telecom plummets
US outguns Asia-Pac as both see gains
American telco stocks rallied after a
poor Q3. The six percent rise in Q4
followed a 12 percent drop in the
previous quarter. However, it was
still only half as good as the rally in
the Dow Jones Industrial Average,
which rose 12 percent between
October and December.
Market leader AT&T did not suffer
from its failed acquisition of T-Mobile
USA from Germanys Deutsche
Telekom in December. Its share price
rose 7.6 percent in Q4, boosted by a
best-ever quarter in smartphone sales
and a 19.4 percent rise in wireless
data revenues.
Main rival Verizon also rose, by 10
percent, but could not match AT&Ts
performance. Sprint Nextel was again
the biggest faller. Following a decline of
44 percent in Q3, the year ended with
a quarterly fall of 23.3 percent.
After falling 2.8 percent in Q3, telco
stocks in Asia-Pac registered a less
than one percent rise of 0.4 percent in
the final quarter.
SingTel, the Singapore-based
operator, mirrored the performance of
the region as a whole. Its stock
remained flat over the quarter despite
making a splash in December when it
announced the launch of Singapores
first commercial LTE service.
Although offering limited coverage
using a USB dongle at launch, the
company said it expected to be able to
provide LTE to 80 percent of mobile
data users by the end of 2012.
We are ushering in a new era of
mobile services, said Yuen Kuan
Moon, SingTel EVP.
Korea-based operator KT also took a
lead in the future stakes. Although the
stock fell 0.5 percent in Q4, it
launched a range of forward-looking
products throughout Q4, including a
Smart Home Pad designed for the
senior generation to manage services
such as video calling, on demand TV
and connected home security features.
KT plans to ultimately open a full-
blown Smart Home Era by changing
all wired telephones at home into
Smart Home Pads, commented Seo
Yu-yeol, president of KTs home
business group.
The Asia-Pacific telecoms sector grew 0.4
percent in Q4 according to data supplied by
the FTSE Group
Asia-Pac
The US telecoms sector grew six percent
in Q4 according to data from the Dow
Jones US Index
The US
6%
0.4%
Worldwide telco
stocks on the up
SHARE PRICES AT TELCOS ACROSS THE GLOBE FINISHED IN THE
BLACK IN Q4, REVERSING FALLS IN THE PREVIOUS QUARTER
COVER STORY
C
ustomer experience is a
fickle beast, hard to pin
down at the best of times
but par ticularly so in
Leviathan-like operators whose global
tentacles are matched in reach only
by the complexity of the groaning
legacy systems that underpin them.
Add in the demands of ever-more
power ful marketing depar tments,
competition from Silicon Valleys
finest and a macroeconomic climate
that is forcing countries, let alone
well-established retail brands, to the
wall and you can see why telcos are
finding it tough to focus on customer
experience and unear th a magic
formula.
And what of customers
themselves? Cer tainly they are
becoming ever more demanding
something telcos are all too aware of.
As we repor t on page 22, matching
consumer expectations is viewed as
the biggest customer experience
challenge facing the industr y at the
current time.
The problem is that customers
dont view telcos as standard bearers
of great customer experience.
The UKs Institute of Customer
Ser vice, for example, tracks 13
sectors in its regular index. The latest
ranking, for July 2011, scored the
telecommunications sector four th
from bottom, well below the average.
So far, so not so good.
It is often said that when faced with
a challenge it is best to go back to
basics and concentrate on what you
are good at. Despite undergoing
something of a transformation and
flir ting with tr ying to be cool, at hear t
telcos remain bastions of that noble
scientific pursuit engineering.
And theres nothing an engineer
likes more than problem solving. It is
for this reason, its fair to assume,
that BT Group CIO Clive Selley told
European Communications that the
25 billion company has decided to
turn customer experience into a
science.
Selley has spent over 25 years at
the UK-based operator working in a
variety of roles. As well as being the
current group CIO, he is also CEO of
BT Innovate and Design the division
charged with long-term technology
strategy and research.
Solving problems, you could say, is
his raison detre.
The customer experience is a
basic building block of what we do,
Selley reveals during an exclusive
inter view at BTs central London HQ.
We forensically measure
per formance, the improvements we
make and therefore the investment
case behind all that we do.
He reels of f a number of key KPIs
the company focuses on: getting
commitments they have made to
customers right first time (see box
out); ensuring the absolute number of
faults is falling which he classifies
as customer incident reduction; and
shor tening the various cycle times the
company manages with the aim of
providing instant gratification to
customers.
If you understand where you are
failing you can translate that into
using better tools and equipment, and
ultimately providing a better ser vice,
adds Selley.
This is an ongoing, never ending
battle. UK regulator Ofcom publishes
quar terly data that reveals who is the
most complained about telco. Its
most recent data, from July-
September 2011, showed that BT
was perceived as the second worst
per former in landline and fixed
broadband ser vices.
Given the breadth of his job, Selley
has a unique view of the company as
a whole. BT Group has four distinct
customer-facing business units:
Retail, Global Ser vices, Wholesale
and Openreach, which is responsible
for the last mile of the UKs access
network and for the roll out of
super fast broadband.
The CIO rates the overall customer
experience that BT provides as
good but with room for
improvement.
There are two clear goals that the
company has at the current time. For
retail customers, Selley says rolling
out super fast broadband is ver y
impor tant to improving the customer
experience.
Providing a toolset to make better
use of bandwidth between end users
and data centres, meanwhile, is the
number one priority for enterprise
customers.
BT has committed 3 billion to roll
out super fast broadband to two thirds
of the UK by 2014. Selley says the
whole company is focused on
delivering the infrastructure, but its
not just about laying high-tech fibre
optic cables.
Some of the innovations are what
you might consider low-tech simple
engineering that never theless delivers
on improving the customer
experience, he notes.
Citing examples such as a polymer-
based plinth for cabinets to replace
their concrete predecessors that
suf fered in bad weather and a clever
spade invented by BT engineers that
cuts through concrete more quickly to
speed up fibre deployments, these
are exactly the type of innovations
that telcos have traditionally been
good at.
But do they resonate with the
customer? They are cer tainly a long
way from headline-grabbing
innovations such as voice recognition
software or augmented reality being
trumpeted by some of the sectors
newer and more innovative
companies.
Rightly, Selley argues that the
customer might not care about a
spade, but will cer tainly notice if their
broadband ser vice improves.
We track the real
experience of our
customers from start
to finish, removing
duplication and
inefficiency to drive
down service
provision time
COVER STORY
C
formula.
As we repor t on page 22, matching
current time.
science.
his raison detre.
customers.
adds Selley.
improvement.
experience.
customers.
optic cables.
good at.
companies.
We track the real
experience of our
to finish, removing
duplication and
down service
provision time
OPERATOR STRATEGY
Europe rebounds after two negative quarters
Some relief at last for European
telcos. After two consecutive quarters
of falling share prices, telcos in Europe
saw stocks rise by 3.3 percent
between October and December 2011.
The rise was registered amid a
macroeconomic climate that continues
to be extremely difficult as countries
battle to avoid recession, save the euro
and implement austerity programmes.
For the first time since European
Communications began tracking
European telco stocks in Q2 2011,
more companies recorded quarter-on-
quarter rises than falls.
For the second time in the last
three quarters BT was the best
performer rising nine percent.
Vodafone (up 7.1 percent) headed a
list of seven other operators that
recorded a positive performance.
What appears to please the market
is that BT continues to deliver profits
despite falling revenues. For the final
quarter of 2011, the UK-based
operator saw operating profit rise eight
percent year-on-year to 950 million
despite sales declining five percent to
5.8 billion.
Key to the increase in profitability
was an overall three percent reduction
in the companys cost base, including
reduced labour costs. Payments to
operators due lower mobile termination
rates and lower transit and wholesale
call volumes also fell.
We have delivered another quarter
of growth in profits and cash flow
despite the economic headwinds,
commented CEO Ian Livingston.
Vodafones Q4 results were not
released before this issue went to
press, but commentators were
expecting a good per formance. In a
November inter view with European
Communications, Vodafone Europe
CEO Michel Combes said the
operator was concentrating on
getting the best out of what it had
rather than looking to expand fur ther
into emerging markets.
This we hold what we have
strategy has been echoed by other
operators, but Combes was keen to
stress that the industry could not
afford to be totally insular.
Collaboration within the industry is
needed more than ever, he said.
However, whether or not those
operators who continue to suffer with
poor performance agree with this is a
matter of conjecture.
As in Q3, Portugal Telecom was the
biggest faller by far its stock fell
23.6 percent over the quarter (see box
out for more).
Telefonica (down 7.8 percent), KPN
(down 7.1 percent), Swisscom (down
4.2 percent) and France Telecom
(down 4.1 percent) all suffered falls.
* Our index is made up of the
following EU telcos: Belgacom, BT Group,
Deutsche Telekom, France Telecom, KPN,
Portugal Telecom, Swisscom, Tele2,
Telecom Italia, Telefonica, Telenor,
Teliasonera and Vodafone Group.
900
800
700
600
October November December
October-December 2011 EU Telco stocks
The telecoms sector in Europe grew
3.3 percent in Q4 according to FTSE
Group data*
Europe
3.3%
BT GROUP CIO CLIVE SELLEY TELLS MARC SMITH HOW THE COMPANY
IS TACKLING THE TRICKY ISSUE OF CUSTOMER EXPERIENCE
TURNING
CUSTOMER EXPERIENCE
INTO A SCIENCE
COVER STORY
COVER STORY
C
formula.
As we repor t on page XXX, matching
current time.
science.
his raison detre.
customers.
adds Selley.
improvement.
experience.
customers.
optic cables.
good at.
companies.
We track the real
experience of our
to finish, removing
duplication and
down service
provision time
COVER STORY
However, there remains a lingering
suspicion that telcos will struggle to
engage with customers over what is
increasingly viewed as a basic if
essential par t of ever yday life.
To underline this point, if we return
to the UKs ICS index the three
sectors that are viewed as giving
worse customer satisfaction are
transpor t, utilities and national public
ser vices all providers of other basic
ser vices.
To really cap it of f, there is a
cer tain inevitability to Selleys answer
to a question about which companys
customer experience has impressed
him the most. Its Apple, of course,
the company whose logo is in danger
of replacing the dictionar y definition
of great customer experience such is
it becoming the stock-in-trade answer
to worlds most admired brand.
Its hardware turns up ver y quickly,
it always works and its easy to use,
enthuses Selley.
Indeed, the CIO says telcos should
use companies like Apple as
benchmarks when looking at how they
can improve their own customer
experience.
Star t with assessing your
immediate competitors, under take
customer satisfaction sur veys, then
ask outside your peer group to find
out what facets of customer
experience they excel at and decide if
they are applicable to you, advises
Selley.
Once upon a time, such an
approach would have been
anaethema to telcos, but as Selley
acknowledges, they live in an ever
more complex work. Co-opetition is
cer tainly something I believe in and
we just have to get used to it, he
says.
An urgent requirement is improving
back of fice systems. As customer
touch points expand from retail
outlets and call centres to online self-
care and social media, operators are
having a job knitting all the dif ferent
aspects together.
Selley says BT installed a new core
database management system a few
years ago, while a single CRM
P
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COVER STORY
A new name, a new look, a new direction.
CSG and Intec are now CSG International.
www.csgi.com
2011 CSG Internaonal, Inc.
With our recent acquision of Intec, CSG Internaonal is now a globally focused leader in helping clients accelerate
business anywhere. At the core of our union is a transformaonal partnership. As a combined enty, we now oer
our clients an unprecedented set of business support soluons and services to help them capitalize on dynamic
market changes and opportunies. With more than 25 years of experience, and serving over 500 customers in 24
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revenue, strengthen customer relaonships, and exploit emerging opportunies. We are commied to long term
partnership with our customers and believe collaboraon and communicaon are an integral part of helping our
clients achieve success. We invite you to prot from our experience. Visit us at: www.csgi.com
COVER STORY
platform alongside a single por tfolio
database ensures a much more
consistent approach.
In addition, the company has spent
a lot of money on realtime decision
capabilities so employees can
communicate with customers in a
much more ef fective way than before.
One such system, DebateScape, is
a social-media search tool developed
by the Innovate and Design division
for BT Retail. It spots comments,
posts and tweets from a number of of
social media sources and presents
them to call centre advisers.
BT says social media enables them
to be more proactive than ever before
in helping to resolve problems,
thereby saving both time and money
it estimates to have saved in the
region of 400,000 in equivalent
costs of manually searching for
customer ser vice issues across
social media.
Perhaps just as impor tantly, these
new technologies also help BT to
predict what customers might find
attractive now and in the future.
According to Selley, par t of BTs
future involves moving from catering
for households to catering for
individuals. BT, of course, doesnt
have a mobile business, so is used to
dealing with selling and maintaining a
landline or broadband connection to
an address.
Understandably, this approach
simply doesnt cut it anymore in a
world where consumers are
connected to both their personal and
work lives via cloud and IP technology
using both fixed and mobile devices
interchangeably.
One way BT is attempting to bridge
this gap is by partnering with mobile
joint venture Everything Everywhere to
undertake the worlds first fixed/mobile
LTE trial in Cornwall the mainly rural
south-western corner of the UK.
The ongoing trial has seen the two
companies provide wireless
broadband to 180 customers who
previously had no broadband or
struggled to get speeds of 2 Mbps.
Par ticipants are now reaching an
average download speed of 7 Mbps,
enabling them to access a range of
content including on-demand TV, HD
video and VoIP ser vices.
Selley says BT is committed to
cracking the problem of delivering fast
broadband to rural communities.
The future presents several
challenges and the winners will be
those who deeply understand their
customers, says Selley.
So what is the biggest challenge?
According to the CIO it is keeping BTs
own workforce of over 92,000
employees up-to-date with all the
latest developments. It is a par ticular
challenge for the firms enterprise
customers, who are large and varied.
Our enterprise business is moving
from being general purpose in nature
to focusing on delivering a highly
specific ser vice to individual industr y
sectors, explains Selley.
As an example, he cites providing
cloud ser vices to pharmaceutical
companies that help with navigating
the highly regulated environment that
par ticular industr y operates in.
This is a big deal for our teams,
from designers to account managers,
who have to keep up-to-date,
continues Selley.
BT invests heavily in both
classroom and online training that
Selley says has to be multifaceted to
keep up with trends. How the
company builds skill sets for
emerging markets is a par ticular
focus currently, following BTs
continued expansion into Asia-Pac
and Latin America.
To ser ve customers well our
workforce needs to be distributed
around the globe, says Selley.
No one is pretending that pulling all
these different strands together into a
coherent customer experience amid all
other pressures such as time,
technology and investment, not to
mention increased competition, is easy.
But telcos have no choice and time
is not on their side. If thats the stick,
at least the carrot is attractive
winners will not only create happy
customers and, it is hoped, push
telcos up the most admired brand
lists, they will also make a dif ference
to their own companys bottom line.
Poor customer experience costs
more it is much more expensive to
win a new customer than keep an old
one, says Selley. Getting customer
experience right is an imperative that
you cant ignore or skimp on.
In a battle in which only the fittest
will sur vive, choosing to view
customer experience as a science
could be the best tactic. ec
Getting
customer experience
right is an imperative
that you cant ignore
or skimp on
Right first time is BTs key measure

for customer service, which measures
how often the operator gets things
right for customers at the first time of
asking. As CIO Clive Selley points out,
this is important as failure increases
its costs.
In 2011 BT achieved a three
percent improvement in this measure,
which compares with a 10.5 percent
improvement in 2010. BT said that the
scale was less than in previous years
due to a large increase in provision
volumes that required engineer visits.
To meet these challenges BT
recruited additional engineers and
provision lead times improved to an
average of 10 days at the end of
March 2011.
Call handling times for consumer
sales improved by 19 seconds due to
the introduction of Agent.com, a new
system that allows sales agents to
process orders faster and more
effectively. With the rollout of a
desktop help system, broadband
consumer customers can now solve
many problems without the need to
call BTs service centres.
Getting it right first time
www.glotel.co.uk
Glotel workplace stuoy 2012
Page 15 of 18
Contractors/freelancers and permanent
staff equally view career progression
as important in a new project or role.
There the similarities end. Contractors/
freelancers attach much more
importance to continuous employment,
hardly surprising given the uncertain
nature of their work. However, a greater
challenge and better quality of work rank
|o t|o top vo .as to bo oot|coo o
their role by a new opportunity. Clearly
these are fairly subjective things but, when
interviewing top talent, hiring managers
should make sure they demonstrate
how their vacancy will deliver a greater
challenge and better quality work.
The majority (60.6%) of contractors/
freelancers have worked on their current
project for less than 12 months but,
somewhat surprisingly, 7.4% have been
doing so for 4 years or more.
Rather unexpectedly, well over a third
(36.8%) of permanent employees
have been in their current organisation
o vo oas o oo. |o aoo|t|oo to
t||s a s|go|caot oobo (38.5) o
contractors/freelancers have been
cootact|og/oo|aoc|og o vo oas
or more. Clearly some organisations
have good retention strategies in place
for their permanent staff and many
contractors/freelancers believe their way
of working suits them well.
For those that dont have good
retention strategies it is important that
hiring managers work to identify why
people are leaving their organisation
conducting thorough exit interviews
(including contractors/freelancers) will
help here. Where hiring managers are
losing staff to competitors working
on more up to date technology it is
important to look at the elements that
t|o cao |ooooco soc| as |pov|og
work-life balance, showing how projects
will help develop contractors/freelancers
careers and identifying CSR opportunities.
Attractor
Contractor/freelancer
Rank
Attractor
Permanent
Rank
Career progression
39.4
1
Continuous employment (job security) 37.6
2
Greater challenge
31.2
3
Better quality work
28.4
4
Location of role
23.9
5
Career progression
47.4
1
Good work-life balance
36.8
2
Culture/working environment
33.4
4
Better quality work
31.6
4
Greater challenge
24.6
5
Asloe |rom more money ano benets, wbat tbree tblngs woulo attract you to a new project?
Asloe |rom more money ano benets, wbat tbree tblngs woulo attract you to a new role?
Page 16 of 18
New projects
In spite of recent market volatility driven
by US and European debt crises, almost
half of hiring managers (48.5%) reported
that their organisations are planning more
projects in 2012-2013 than 2011.
Focus on Africa
The projects most likely to take place
over the next couple of years are
the launch of new technology or
software (23.7%), maintenance of
existing infrastructure (22.9%) and large
incremental upgrades such as new
infrastructure/software (12.2%) with
the global hotspots being East and West
Africa, North America and East Asia.
Greatest impacts on the global
telecoms landscape in 2012-2013:
Market
The telecoms recruitment
market is still growing despite
economic problems.
Contractor/freelancer at a network
operator in East/West Africa
The next hotspot will be
West Africa. There is massive
subscriber growth on mobile
voice networks requiring a very
large network infrastructure.
Contractor/freelancer at a hardware/
software vendor in Africa
With ARPU* decreasing on
voice and increasing on data,
for the next 12-24 months data
will remain the focus for most
operators. At the same time
there will be more and more
network sharing and mergers
happening in the telecoms world
in order to reduce costs.
Contractor/freelancer at a hardware
vendor in Europe
10.2%
North
America
8.4%
Western
Europe
5.4%
Eastern
Europe
7.8%
Middle
East
6.6%
West Asia
8.4%
Southern
Africa
1.2%
Central
Amer-
9.6%
South
America
10.2%
East Asia
19.2%
East/West
Africa
4.2%
Australasia
6.6%
Northern
Africa
2.4%
Answered
dont know
www.glotel.co.uk
Next hotspot in telecoms:
Page Page 115 of
ractors/free eelance ncers and s and pe nd perma permanen nent nent
qually vie ew ccarreeer er pro progre ogres i sion ion
ortant in a a ne eww pr proje oject ct or or role role.
he simmilar ritiees s e endd. CCon ontractors actors/
ers att ttachh m muucch mmorre
nce to o coonttinnuo uous s em mplo ployme u nt,
rprisin ng g give ven n tthe e uunc ncerrttain
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nd be etteer qqual ality ty oof f w u oork rank
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rly subbjecctivve e th thin nggs b but, t, when
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ure th they y de demmo on nst strat ate
ncy wwill d del elive ver er a a greeate er g
etter r qua ualit ty y w wor ork k.
Th The major The majorit ority (60.6% y (60.6%) of contracto contractors/
freela freelancers have wor have worked on their current
project project for less than 12 months but,
somewhat surprisingly, 7.4% have been
doing so for 4 years or more.
Rather unexpectedly, well over a third
(36.8%) of permanent employees
have been in their current organisation
o vo oas o oo. |o aoo|t|oo to
t||s a s|go|caot oobo (38.5) o
contractors/freelancers have been
cootact|og/oo|aoc|og o vo oas
or more. Clearly some organisations
have good retention strategies in place
for their permanent staff and many
contractors/freelancers believe their way
of working suits them well.
For those that dont have good
retention strategies it is important that
hiring managers work to identify why
people are leaving their organisation
conducting thorough exit interviews
(including contractors/freelancers) will
help here. Where hiring managers are
losing staff to competitors working
on more up to date technology it is
important to look at the elements that
t|o cao |ooooco soc| as |pov|og
work-life balance, showing how project
will help develop contractors/freelance
careers and identifying CSR opportunit
Contractor/freelancer
Ran
Permanent
Ran
39.4
mentt (j (job ob se sec ecu uri rityy) 37.6
31.2
28.4
23.9
47.4
36.8
33.4
31.6
24.6
monney y aanno o bbeen nets, w wbat tbree tblngs woulo attract you to a new project?
ano b ben ne etts s, wwwba bat t tbre ree tblngs woulo attract you to a new role?
f 18 18
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ers
ties.
nk
nk
1
2
3
4
5
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2
4
4
5
Glotel Glotel otel workpla placc workp w e stuo uoy 20 e
New projects ts
In spite of recent maarke ket v voola atil ility ty ddrive ven
by US and European n deb ebt t cr cris ses es, aalmmos st
half of hiring manager rs (4 48. 8.5% 5%) %) r rep epoorte ed
that their organisations ns are re p pla lan nni ning ng m mor ore
projects in 2012-2013 tthan an 220 011. e
in
inf
the
Afr
Mark rkeett
The telecoms reccruit tm menntt
market is still grow owingg d des esppit ite e
economic problemms.
Contractor/freelancer a at a nnet two worrk k r
operator in East/West Af Africa
The
Wes W
subsc su
vo oice
larg rge n
CConntract
oftw ware v so
10.2%%
North
America
8
We We
Eur EEur
8. 8.4
SSouthe the
Africa
1. 1.2%%
Central entral
Amer- rr
9.6 6%
SSoutth
Am Americ ica
119
Eas ast/
AAfr
6.6 66.6
North
Afric
2.4%
Answered
dont know
wwww.glotel.co.uk o.uk
Next hotspot in telecomms:
Page 1 of 18
A
ttractio
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, re
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tio
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an
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m
an
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t ch
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icatio
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s
G
lotel w
orkplace study 2012
About Glotel
Glotel is a leading international telecommunications recruitment
consultancy specialising in placing professionals into permanent, temporary,
interim and contract roles.
The company specialises in the provision and support of telecommunications
professionals for customers anywhere in the world quickly and compliantly.
C|oto| opoatos |o ovo 50 cooot|os g|oba|| o |ts |ooooo oco.
More information
For more information, please contact:
Name here or Name here
at MHP Communications
E: namehere@mhpc.com
T: xxxx xxx xxxx
E: namehere@mhpc.com
T: xxxx xxx xxxx
www.glotel.co.uk
T
he cloud computing revolution
has shaken up the information
technology industry in many
directions. Although largely
regarded as a positively disruptive
force, the shift towards services-based
delivery of both storage and processing
power is something that NEC has
carefully analysed and strategically
planned for over a number of years.
As a company with an enviable
pedigree in communications services,
NECs leverage of the cloud model now
puts us in a unique position to help
commercial enterprises, public bodies
and, perhaps most crucially of all, the
telecoms carriers who will now take this
computing paradigm forward.
NEC advocates carriers as the new
champions of cloud computing on the
basis of these companies inherent
suitability to delivering new services-
driven computational power channels.
With a business model perfectly
architected to servicing large numbers
of customer contracts, the carrier
cloud will provide the real capability to
scale business models and impact
behaviour among businesses as new
services are delivered to billions of
people around the world.
Carriers will be at a distinct
advantage in terms of making these
developments become a reality due to
the strength of their networks, the
depth and reach of their bandwidth,
their quality of service and their end-to-
end security. Commercial maturity will
also be crucial at this time, and carriers
have both maturity and stability when it
comes to customer support, customer
trust and operational processes.
For carriers themselves this is a
logical step towards new value chains
in developing and developed economies
alike. Markets have become over
saturated to the point of bloating from
both a voice and data perspective. So
in order to grow, carriers will need to
look to new revenue channels from the
cloud as they now present their market
propositions across a variety of vertical
market streams.
As cloud services now underpin new
and existing communications protocols,
consumer media will also become a key
driver for cloud as tablet and
smartphone devices draw heavily upon
online resources to give users the rich
multimedia services they demand. In
line with these channels we will also
witness M2M (machine to machine)
intercommunication increasing,
especially at the wireless level, and this
again will draw down power from the
cloud. Above, below and in the midst of
all these newly empowered data
streams we will still find business IT as
a fourth defining force here.
The sum of these parts is not just
the carrier cloud opportunity
encapsulated, it also conveys some
sense of how the cloud will change the
way the telecoms and IT markets will
now operate. As carriers work to supply
these new data streams, they will need
to foster a more intimate relationship
with their business partners and
enterprise customers, penetrating
further into the technology, service and
management aspects of their business.
Cloud contracts necessitate proximity,
service, support and ongoing
operational management and NEC sees
it as a responsibility incumbent upon us
to ensure that these expectations can
be met. As NEC now commits to
helping carriers expand their value
chains strategically and profitably, we
will also work to position the carrier
business that we know and understand
so well in order for these companies to
exemplify what it means to deliver cloud
computing properly.
We have a range of solutions
designed to match the required quality
and availability demands of the
application and SLA at this level. Many
IT vendors claim to have extensive
experience in dealing with carriers, but
in reality, most of those relationships
have been created on the basis of
purely providing carriers with the
cheapest offering for hardware. Our new
solutions and services have been
constructed from the ground-up on
cloud age business models. Also, we
have invested in our regional carrier
cloud centres of competence (and our
283 subsidiaries) so that we can adapt
the cloud concept to the carrier and
telco business as a means of reaching
all potential users around the globe.
As the use of cloud computing
services now proliferates and
permeates its way into user behaviour
at both the enterprise and consumer
level one universal truth emerges: we
witness an escalation of data. As data
now spirals exponentially in both
structured and unstructured formats,
NEC realises that we will need to be
able to quantify, classify and clarify the
source and content of the data that we
Capitalising on carrier
cloud connections
ADVERTORIAL
Cloud computing
is all about the
provision of new more
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at a virtualised level

channel across the cloud and so
processing and analysis techniques
come to the fore. NEC has invested
significantly in algorithms for correlation
analysis. Our big data strategy will help
to identify new business models for
digital businesses as well as
stimulating demand for new services
underpinned by data.
As the nature of cloud based data
now creates not just an information
society but also an information-heavy
society, NEC has described the concept
of the Smart City. This is a place that is
able to leverage its use of big data to
its own advantage and not become a
source of environmental degradation or
an ecological burden of some kind. Built
around the precepts of safety &
security, sustainability, efficiency and
perhaps the more emotive value of
pleasantness; NECs Smart City
concept promotes the creation of
sustainable living spaces where the
best options to provide the best quality
of life are pursued, while reducing net
pollution such as greenhouse gas
(GHG) emissions.
Cloud computing is all about the
provision of new more efficient
infrastructures at a virtualised level, so
as NEC now dovetails developments in
this arena with our work to promote the
creation of Smart Cities, this should be
a very natural extension. After all,
decisions taken today lock in the
futures of many cities and so we can
conservatively say that the
infrastructure of 2050 is being built
today, yet the world of 2050 will be very
different from today and so strategic
planning is essential.
In order to make the cloud powered
Smart City a reality NEC will help define
the layers of social infrastructure that
will make up our new societies. From a
base layer composed of raw Energy
we then place our Information
Communications and
Telecommunications layer. Above this
sits the Transportation layer and
ultimately above this we see Human
Relationships flourishing.
Lets remember that cloud computing
is all about efficiencies and enabling
commercial enterprises to buy just
enough computing power when they
need it and scale back when they dont.
A Smart City has the carrier cloud
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Come with us, connect with us, live
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Regional Manager for
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Google
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Ayman Irshaid,
CEO,
Areeba Areeba
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CTO,
Dubai Media Incorporated
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Director of New Media,
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Universal Music, UAE
Driving Sustainable Growth of
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The Foremost Operators in Broadband Delivery in the Region
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H.E. Amir Zai Sangin,
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Afghanistan
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Acting Chairman and CEO,
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CEO,
Orange Jordan
5
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www.broadbandworldforum.com/mea
I70+speakers
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I1000+attendees
I76%operator attendance
I30+countries represented
I44%CxO/VP/Director level
Sponsored by:
Customer experience
Special report
22 Survey
Results of our exclusive customer experience
sur vey
32 Analyst v operator
What do analysts and operators think should be
done to improve customer experience?
40 Designing a strategic blueprint for
customer experience
Customer loyalty has never been operators'
strong point but that is slowly star ting to
change
42 Closing the customer service loop
Operators must incorporate social media
platforms into their multi-channel
customer ser vice strategies
44 Blurring the retail and enterprise
boundaries
Should operators be rethinking the way in which
they treat their customer segments?
50 Understanding customer experience
seminar
Review of our Januar y event
Quarterly survey: good but not good enough
A European Communications survey finds lack of leadership and
customer visibility are holding operators back from delivering excellent
customer experience
Closing the customer service loop
Operators must incorporate social media platforms into their
multi-channel customer service strategies.
Fig. 1 (operator respondents only). Who would you say is
leading CEMin your company?
Individual m
anagers are
taking it upon them
selves
A dedicated CEM
m
anager
The C-suite
No one is leading a
CEM
effort
4
1
%
3
9
%
1
2
%
8%
Fig. 2 (operators). How would you say customer
experience is treated within your organisation?
As an integral part of everything we
do across all business units
As integral to certain
parts of the company but
not others
As a separate,
distinct discipline
45%
38%
17%
Fig. 6 (all). How has the customer experience that the
telecoms industry provided over the last five years changed
in your view?
Improved
Stayed the same
Worsened
57%
29%
14%
Fig. 3 (operators). Would you say you have a
holistic 360-degree view of your customers?
No
I dont know
Yes
60%
23%
17%
Fig. 5 (all). What do you regard
as the biggest challenge
the industry faces
with regard to
customer
experience?
M
atch
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exp
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1
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1
6
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1
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1
0
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8
.5
%
3%
4%
Generating enough revenue to keep
up with costs associated with providing
a best-in-class customer experience
Generating enough revenue to keep up
with costs associated with providing a
best-in-class customer experience
Retaining customers in the face of
competition from OTT players
Tracking and keeping up with changes
in customer trends/behaviour
Developing relevant technology
Hiring quality staff and keeping them trained
Making sure customer information is consistent,
accurate, and shared throughout operator business units
Contents
SPECIAL REPORT: CUSTOMER EXPERIENCE
U
S president Barack Obama
once said that the leaders and
businesses we revere are,
generally speaking, the result
of devotion to a bigger purpose. It is
generally accepted that customer
experience is one such bigger purpose
that telcos must focus on if they are to
succeed in a market where,
increasingly, they are competing against
multinational brands from out side the
telecoms sector.
However, according to a new survey
carried out by European
Communications, just 12 percent of C-
suite executives are leading the
customer experience agenda at major
operators (see Fig. 1).
Worryingly, no one is leading a
customer experience effort in eight
percent of operators. In a majority of
cases (41 percent) individual managers
are taking it upon themselves, while for
39 percent of respondents, a dedicated
customer experience manager has been
put in charge.
The stat set alarm bells ringing with
KPMG strategy partner Milan Sallaba
and director Benoit Reillier. Since
customer experience is such an
important competitive lever, as well as
complex and cross-functional, it is
surprising that so few see this as a C-
suite responsibility, they told European
Communications.
Dr Michael Opitz, director at
management consultancy Arthur D.
Little, is in agreement. Customer
experience must have the backing of
the management board and be
implemented in the KPIs and incentive
schemes, otherwise it will always be
compromised, he said.
A lack of coherent leadership
naturally feeds down to a fragmented
implementation of strategy. Although a
majority of operators (45 percent) said
customer experience is treated as an
Quarterly survey:
good but not good enough
A EUROPEAN COMMUNICATIONS SURVEY FINDS LACK OF LEADERSHIP AND
CUSTOMER VISIBILITY ARE HOLDING OPERATORS BACK FROM DELIVERING
EXCELLENT CUSTOMER EXPERIENCE
Over 170 senior telco executives
participated in our online survey over
a six-week period between December
2011 and January 2012.
The survey was split into two
parts: the first part was answered by
all respondents, while the second was
dedicated to operators only.
Overall, 35.5 percent of respondents
were operators, 30.5 percent were
vendors and 34 percent were third
parties.
From a geographical perspective 68
percent of respondents came from
Europe, 14 percent came from the
Middle East and Africa, while 12
percent came from Asia-Pacific.
About the survey
Fig. 1 (operator respondents only). Who would you say is
leading CEM in your company?
I
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integral part of everything their
organization does across all business
units, that means a majority does not
(see Fig. 2).
Thirty eight percent said it is integral
to some parts of the business but not
others, while 17 percent said it was
treated as a separate distinct
discipline.
A well established customer
experience strategy should be treated
as an integral part of the entire
organization, said Opitz.
Clearly, more work is needed, but
according to Sallaba and Reillier, the
responses could also indicate a tension
between short-term financial performance
and customer experience objectives.
Whatever the reason and it will be
different form operator to operator in
order to reach the latter objectives,
operators must first overcome one of
their biggest problems: harnessing their
various legacy systems to provide a
complete picture of their customers
and, therefore, enable a joined-up
customer service.
As the survey finds out, this remains
a serious problem. Just 17 percent of
operators say they have a 360-degree
view of their customers. Sixty percent
say they dont, while a further 23
percent say they dont know (see Fig. 3).
Operators clearly have some work to
do, commented Sallaba and Reillier. A
360-degree view is particularly
important since a customer centric
approach in a multiproduct world
increasingly requires rich customer
information in order to leverage existing
billing relationship.
Before delving further into the
challenges that operators face, it is
interesting to look at how the industry
at large views the customer experience.
As well as taking the views of
operators, some of the survey
questions were opened up to people
who make up the rest of the telecoms
ecosystem.
One of the most fundamental
questions was what should be included
in a telco definition of customer
experience.
Understandably, responses covered a
wide range of aspects, but three stood
out as being the most important:
network quality (78 percent),
customer/billing care (77.5 percent)
and the call centre (67 percent) (see
Fig. 4).
It is surprising to see network
quality as the most important driver of
customer experience, commented
Sallaba and Reillier. With network
Fig. 3 (operators). Would you say you have a
holistic 360-degree view of your customers?
Fig. 2 (operators). How would you say customer
experience is treated within your organisation?
No
I dont know
As an integral part of everything we
do across all business units
As integral to certain
parts of the company but
not others
As a separate,
distinct discipline
Yes
60%
23%
17%
45%
38%
17%
sharing deals becoming increasingly
common, operators will be forced to
find sources of differentiation beyond
their infrastructure. When this happens,
factors such as customer care and
billing relationships will become
increasingly important sources of
differentiation.
Operators need to recalibrate their
century-long ties to the network this
doesnt mean that it should be reduced
in importance, rather other factors need
to be attributed equal importance.
This is neatly illustrated by what the
industry views as the biggest challenge
it faces with regard to customer
experience: matching customers
expectations with the quality of services
delivered.
Exactly a third of respondents chose
this answer, with generating enough
revenue to keep up with the costs
associated with delivering a best-in-class
customer experience and quickly
responding to market trends coming joint
second with 16 percent (see Fig. 5).
According to Sallaba and Reillier,
there continues to be a mismatch
between customers expectation and
operators ability to deliver that can be
boiled down to one key problem: The
industry has had a tendency to
overpromise, they said.
So if many are overpromising and
under delivering, how well does the
industry think it is doing overall when it
comes to customer experience? On a
scale of 0-10 (where 10=best-in-class)
respondents think the customer
experience being provided currently is
above average with 48 percent giving
telcos a score of either six or seven.
Only a small minority believes it is
either very poor or best in class.
Arthur D. Little director Stuart
Keeping says internal programmes are
ongoing at most operators, but agrees
they are not giving a great service: The
reasons for this include a lack of
alignment across the customer journey
and services are not differentiated
enough to meet different customer
expectations.
Also, as both KPMG and Arthur D
Little note, respondents will increasingly
use the OTT providers as a benchmark
when thinking about how well the
industry is doing.
Respondents are also in agreement
that the industry has improved the
customer experience over the last five
years. However, a significant minority
thinks it has stayed the same (29
percent) or actually worsened (14
percent) (see Fig. 6).
79%
77.5%
67%
Fig. 4 (all respondents). Which of the following
aspects do you think should be included in a
telco definition of customer experience?
65%
61%
59%
58%
57%
54%
53%
50%
47%
47%
45%
42%
41%
41%
Network quality
Call centre
Content and services
Website
Mobile user interface
and apps
Security
Billing systems
Loyalty programmes
Quality of staff
Order handling and inquiry
Retail store
Devices
Marketing campaigns
Social media
Data quality and master data
management
Business intelligence and analytics
Customer care and
billing care
Interestingly, the wider telecoms
community is markedly more skeptical
than the operators in answering this
question. Seventy four percent of
operators think the industry has
improved compared to 57 percent
overall.
We support this opinion, said Opitz.
Telcos have made big steps forward,
especially in sales, care and billing, but
they still do not deliver a consistent
experience across all dimensions.
Opitz cites the example of data
throttling, which he says is a very
undifferentiated way to treat customers
that does not meet their expectations
of a good user experience.
Wider factors such as regulation
naturally come into play with the
throttling argument, but Sallaba and
Reillier nevertheless warn that some
operators may have a distorted
perception of the quality of service
they provide.
If that is the case, a majority of
operators showed restraint when
scoring their own companies out of 10
for the quality of customer experience
they currently provide.
Fifty five percent gave themselves a
score of six or seven (again 10=best-in-
class). Fourteen percent gave a score
between zero and three, while 15
percent selected a score of between
eight and 10.
Overall, therefore, operators are
slightly more optimistic about the
performance of their own company
when compared to the telecoms
industry as a whole.
But what of the customers
themselves? Overwhelmingly,
operators said they regarded network
congestion and other quality of service
issues as the biggest source of poor
customer experience.
Over 29 percent of respondents
chose this answer, which came well
ahead of unavailability of desired
service combination (14 percent). A
self-service system that was
limited/difficult to use and bill errors
Fig. 5 (all). What do you regard
as the biggest challenge
the industry faces
with regard to
customer
experience?
Fig. 6 (all). How has the customer experience that the
telecoms industry provided over the last five years changed
in your view?
M
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Generating enough revenue to keep
up with costs associated with providing
a best-in-class customer experience
Improved
Stayed the same
Worsened
Generating enough revenue to keep up
with costs associated with providing a
best-in-class customer experience
Retaining customers in the face of
competition from OTT players
Tracking and keeping up with changes
in customer trends/behaviour
Developing relevant technology
Hiring quality staff and keeping them trained
Making sure customer information is consistent,
accurate, and shared throughout operator business units
57%
29%
14%
came in joint third with 12 percent of
the vote (see Fig. 7).
The fact that network congestion is
the most cited source of poor
customer experience is worrying, said
Sallaba and Reillier. This should be a
basic requirement for operators, not a
key differentiator.
However, Arthur D Little principal Dr
Bjorn Thunstrum saw it differently. It
is interesting that network congestion
was chosen as this is exactly the area
in which operators are doing the least
almost no operator has so far
implemented a quality of service
guarantee for retail customers.
Operators are equally clear about
which lever they think is the most
important they can pull to provide an
excellent customer experience.
With 29 percent of the vote,
responding effectively to customer
queries or problems finished well
ahead of providing higher
personalization (19 percent) and
competitive pricing (15 percent) (see
Fig. 8).
Opitz said it was understandable
that responding to customer queries or
problems came top, but suggested
this was a reactive lever that should
act as a starting point, rather than an
end point.
The most important lever is the
ability to deliver a personalized,
branded end-to-end experience, he
added.
But even if operators know exactly
what customer experience they would
like to provide, other factors limit the
execution of a coherent strategy.
When asked, a majority of operators
(37 percent) said a limited
understanding of customer behavior
was stopping them from delivering an
ideal customer experience (see Fig. 9).
This finished ahead of an inability to
provide consistency in interactions
(25.5 percent) and an inability to offer
the products and services that
customers wanted (21.5 percent).
This certainly seems to back up the
findings with regard to having a 360-
degree view of the customer.
Luckily for operators, Sallaba and
Reillier suggest the answer does not
require thinking the unthinkable. The
smart deployment and application of
business intelligence will, over time,
support better customer
understanding, they commented.
Whether they realize it or not,
customer experience has become a
key battleground for operators in their
search to keep and attract users,
boost revenues and compete against
new entrants to the telecoms market.
The message appears to be that
theyre doing good, but not good
enough. As ever, time is not on their
29%
19%
15% 13.5%
10%
6%
4% 2% 2%
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Fig. 8 (operators). What do you regard as the most important
lever in providing best-in-class customer experience?
We may see
the rise of the
Customer Experience
Officer to the
boardroom

side so developing a clear, integrated
strategy across their business is vital.
For Sallaba and Reillier, this has to
start at the top and in those
operators where customer experience
has yet to make an entrance into the
boardroom, it is just a question of
time.
We may even see this trend giving
rise to a new type of CEO in the
boardroom the Customer Experience
Officer, they predict.
For Opitz, however, an independent
director who reports directly to the
CEO could be a better governance
model. Only someone who is
independent can challenge all the
touch point owners without being
compromised by his/her own
performance, he said.
One thing that should be rammed
home is that while customer
experience is undoubtedly high on the
agenda of most operators, it is
important to realize that it is even
higher on the agenda of customers
themselves.
To this end, Opitz says customer
experience should be viewed simply as
delivering a consistent end-to-end
experience across all touchpoints that
at least meets if not exceeds
customer expectations.
Sallaba and Reillier suggest
operators look elsewhere for
inspiration. Best-in-class customer
experience is no longer defined by
other operators but increasingly by OTT
players who not only fare better but
are targeting growth markets that
interest operators. ec
29%
14%
14%
12%
12%
10%
4%
4%
2%
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Fig. 7 (operators). What do you
regard as the biggest source of
poor customer experience
among your customers?
Fig. 9 (operators).
Which of the following
factors limits your
ability to deliver an
ideal customer
experience
the most?
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Operators may
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quality of service they
provide
SPONSORED INTERVIEW: ALCATEL-LUCENT

W
ith demand for
broadband connectivity
and mobile ser vices
continuing to rise,
telecommunications ser vice providers
have been scrambling to meet
consumer demand for fast
connections and high quality ser vice.
However, now that the market is
essentially saturated, delivering a
fast and reliable connection is no
longer the be-all-end-all of customer
satisfaction in the industr y.
The real dif ferentiator [between
companies] has ultimately become
the customer experience of fered,
said Ben Geller, senior director of
marketing for customer experience
(CX) solutions at France-based global
telecommunications solutions
corporation Alcatel-Lucent. The days
of customer acquisition are largely
gone, he warned: Markets are pretty
much saturated and essentially, the
strategy has become one that is not
based on grabbing market share, but
rather, on retaining market share and
getting more value out of the
customers that you already have.
Today, it is most impor tant for
ser vice providers to consistently
deliver a good quality of experience
(QoE) or customers will find another
provider, said Geller. Even if network
ser vice is consistently reliable, a bad
experience or interaction can have
major impact, including lost revenue
from the customers that switch,
lower customer lifetime value (CLV)
and the inability to monetise ser vice
por tfolios.
According to statistics from Alcatel-
Lucent, more than 70 percent of
consumers are willing to spend 10
percent or more with businesses that
exceed their expectations, but when
customers are dissatisfied, their
likelihood of churning increases by a
factor of 10. In addition to making it
easy for customers to solve
problems, ser vice providers with
good QoE can reduce suppor t costs
and boost profits.
With so many ser vice providers
paired with an increasingly tech-savvy
consumer base the bar for
customer experience has been rising.
So, companies such as Alcatel-
Lucent are currently developing entire
por tfolios of technologies and
ser vices fostering positive customer
experiences. There is cer tainly a
realisation that the traditional levels
of competition that [companies] have
been employing over the years arent
enough to help them compete in the
new market landscape, said Geller.
While market players have
traditionally competed based on the
strength, speed and coverage of their
network; the depth and breadth of
their product and ser vices por tfolio;
and on price, those factors are no
longer enough to dif ferentiate them
in the ever-expanding market, or
provide a superior QoE, he said.
The network is a huge asset, and
quality of ser vice is a big par t of the
customer experience, but there are
other things that have to be
contemplated and managed in
addition to the network to make the
customer experience work, said
Geller.
Customer experience is now
becoming an executive and board-
level conversation. Executivesare
now being measured and
compensated on [customer
experience], so I think that reflects
somewhat of a new way of thinking in
the industr y, he said.
There is cer tainly recognition now
that customer experience basically
touches ever y aspect of their
organisation it doesnt just live in
the call centre or marketing, but
ever y single depar tment has a stake
and role in fulfilling customer
experience.
Geller said that it is impor tant to
keep in mind there is no one-size-fits-
all solution or prescribed path to
improve QoE. Ever y provider has
their own unique set of problems
they are tr ying to solve, he said,
adding that ever y provider usually
wants to star t somewhere dif ferent
when looking to improve the
customer experience: Some
[operators] are going to want to star t
with better monetising the assets
that they haveothers might want to
be able to minimise the number of
incoming calls for tech suppor t, while
others, still, will have no idea where
they want to star t.
Seeking differentiation means no
one-size-fits-all approach to
customer experience
When customers
are dissatisfied, their
likelihood of churning
increases by a factor
of 10
Personalising the customer

experience has also become
increasingly impor tant, Geller added:
If you give the consumer access to
technologies across the contact
channels that mean the most to
them in a format thats easy for
them to use, [the experience] will
feel more personalised to them.
Alcatel-Lucent of fers this kind of
choice and despite the ongoing trend
of ser vices and operations
increasingly shifting online, Geller
said it is not wise for companies to
put all their ef for ts into online
operations. There are a variety of
contact channels that consumers,
based on their preferences, will
automatically gravitate towards, he
said, adding that he believes there
will always be issues that crop up for
ser vice provider customers that will
require some level of customer agent
assistance, rather than self-ser vice.
Our technology, in the context of
customer management and customer
care, is engineered and built to be
plugged into each of those popular
contact channels.
Alcatel-Lucents por tfolio of
customer experience technologies
has three basic solution suites,
stemming from the Alcatel-Lucent
acquisition of the Motive por tfolio.
The company has expanded upon the
original por tfolio by combing
additional solutions and ser vices
from within Alcatel-Lucent to create
the newly expanded Motive Customer
Experience Solutions. The first is CX
management, mainly centred on
customer care and managing devices
and ser vices. A big par t of CX
management, said Geller, is helping
consumers better self-manage the
quality of ser vice within their homes.
The idea behind this is youve got
ever y family member bringing new
devices and ser vices within the
home, all competing for that finite
resource of bandwidthWith so many
new technologies being introduced
that eat up bandwidth, consumers
have to re-prioritise the ser vices so
bandwidth sensitive ser vices get the
highest bandwidth, said Geller.
Alcatel-Lucent is continuously
researching and updating their device
librar y to manage the wide variety of
mobile devices that exist, such as
tablets, smar tphones, and e-readers.
These devices require special
management mechanisms to make
sure they can be set up correctly,
that they can be fixed when they
break and be maintained and grow in
capabilities over time, said Geller.
Another big focus of the Alcatel-
Lucent por tfolio is CX analytics:
It is not wise for
companies to put all
their efforts into online
operations

What we are seeing right now is not
only is the market space asking for
power ful analytic engines so they can
crunch data and make decisions, but
they are also asking companies like
ours to come in with purpose-built
solutions that can solve problems for
them, said Geller. So, we have a
brand new set of solutions that have
pre-engineered algorithms to help
[companies] better gauge propensity
to churn at a consumer level and at
a population level. These
algorithms, he said, can be plugged
into a system and generate
information about which customers
are likely to churn and which are not,
helping to forecast lifetime value of a
customer.
Thirdly, the company is also
focusing on CX optimisation, which
centres on what products and
ser vices customers are requesting
helping to monetise the network as
well as on a suite of consulting
ser vices, which aid companies in
customer experience management. I
think there has cer tainly been a shift
from a reactive customer experience
to a pro-active one, said Geller.
The industr y has awakened to the
fact that youre really not going to go
out and acquire a bunch of new
customers youve got to keep what
youve got and youve got to get
more out of it that really speaks to
customer lifetime value (CLV).
One example of Alcatel-Lucents
work is helping a large Nor th
American telco improve its QoE:
Weve taken their first time install
success rates from 60 percent to
almost 98 percent, said Gellar,
adding the provider has also been
able to reduce first 30 day calls by
75 percent. Another company has
taken Alcatel-Lucents self-help
technologies and turned them into
apps that people can download onto
their iPads, smar tphones, etc., that
enable users to self-manage their
broadband, TV or voice ser vices. In
the first nine months of this
application being rolled out, said
Geller, the company was able to
avoid 600,000 calls in their call
centre through self-ser vice, which
meant a 30 percent decrease in their
contact rate.
With this, he said, the most
impor tant thing for companies to
keep in mind overall in terms of QoE
is that ever y company just like
ever y companys consumers need
customer experience solutions
tailored to them individually.
Ever ybody wants to star t someplace
dif ferent but what companies have
to recognise overall is that if you
really want to handle the customer
experience, youve got to put the
customer first, and manage
ever ything else centred around that,
said Geller.
www.alcatel-lucent.com
Customer
experience is now
becoming an executive
and board-level
conversation
Ben Geller, senior director of marketing, Alcatel-Lucent

Operator v analyst
THE IDEA WAS SIMPLE: ASK A SELECTION OF OPERATORS WHAT THEY REGARD AS THE MOST
IMPORTANT THING THEY ARE DOING WITH REGARD TO CUSTOMER EXPERIENCE; THEN ASK
ANALYSTS WHAT THEY THINK IS THE MOST IMPORTANT THING OPERATORS SHOULD BE DOING
Dirk Wierzbitzki
Head of Customer Experience Design, Swisscom Residential
Real innovation requires me to know the people that will be using it. Simply being familiar with the technology is
not enough. Successful experience design is therefore based on an intensive examination of the user's emotions, wishes
and concerns. We identify these through direct contact with customers, discussions with experts and studies. We draw
inspiration from all these sources when designing our offering. But inspiration is just the beginning. If a product is to
establish itself on the market, we must ensure that it is relevant to the customers, delivers the desired benefit and
meets their needs as regards usability
Hannes Ametsreiter
CEO, Telekom Austria Group
Telekom Austria Group is committed to improving customer experience, and we have a history of listening to our
customers before making decisions that will affect our business. Last year we announced a move towards fixed-to-
mobile convergence with the creation of a unified market presence under one single brand A1. This was done to meet
customer demand, and allows us to offer customers a truly integrated product portfolio, as well as integrated customer
services and customer management
Yan Ou
Managing Director, China Telecom Europe
Our MVNO service, CTExcel, was born entirely out of our commitment to improve the experience of our customers.
Driven by our parent groups Customer First, Service Foremost philosophy, we place ourselves in our customers shoes
to deliver a tailored mobile service that not only fulfills their communication needs but also provides unique value-added
services that practically enhance their daily life. To ensure our customers are happy throughout their journey with us, we
have dedicated systems and processes to track and improve our service quality and customer satisfaction at every turn,
and continuously introduce innovative and good value services to strengthen their confidence and build up their loyalty
in our service
Duncan Barnes
Director in Customer Management, Deloitte
The primary objective of operators in improving their customers experience should be to maximise the average net
value of their customers to the business across the duration of their custom the customer lifetime value. Begin by
gathering insight into what is of real value to your customers, and what influences their lifetime value to you. Then,
deliver a consistent, integrated customer experience across multiple channels that supports your brand promise while
facilitating the use of lower-cost channels. Use insight derived from data to treat every customer as an individual,
offering them targeted offers across all channels to drive cross-sell and up-sell. Finally, gain insight from multiple
feedback channels into service performance and quality issues, and proactively respond to these in real-time
Rob van den Dam
Global Telecommunications Industry Leader, IBM Institute for Business Value
Competitive advantage takes a distinctive customer experience that goes beyond satisfaction and creates real
value for the customer. Operators should offer an experience that helps consumers form an emotional engagement with
them. They should invest in capabilities that capture and analyse customers rational and emotive perspectives on key
interactions across all contact channels, and adopt a new set of KPIs that have a more direct linkage with customer
advocacy and experience. In addition, they should invest in advanced analytics to mine digital channels, such as blogs,
tweets, social networks, peer reviews and consumer-generated content to access customers honest, unmediated views,
values and expectations, and become part of the digital dialogue
Adrian Baschnonga
Senior Analyst, Global Telecommunications Center, Ernst & Young
Managing the customer experience is becoming ever more challenging as end-users take up new types of services
across an increasing range of devices and access networks. At the same time, end-user data resides in a number of
different systems, hampering efforts to improve quality of experience. Operators need to focus on achieving an
integrated view of the customer, one that incorporates different dimensions such as location and type of device.
Improvements in real-time analytics are needed so that operators can understand network issues that impact
performance and how this relates back to the customer experience
Annette Jump
Research Director, Gartner
Mika Kitagawa
Principal Research Analyst, Gartner
Price and product quality are the top criteria that determine consumer attitudes toward technology brands. As
consumer technology evolves, there is less technology differentiation between products from different providers within a
selected price range. Consumers are looking for other criteria, such as user experience and brand recognition within
their desired price points, to make their purchase decisions. Brand value is currently outside of top five purchase
criteria for consumers, while user experience is number three. User experience is determined based on ease of use and
familiarity. For instance, consumers like to use the same OS for different devices, such as iOS for Apple's smartphones
and media tablets, as the user experience will be consistent. Consumers usually have some preferred technology
brands, but their brand loyalty is generally low. Therefore, one negative experience with a brand will easily make a
consumer switch to another brand
For more InIormaIIon abouI CrIdComms,
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TELECOM AND UTILITY CONVERGENCE
M
obile phones are arguably
the most dynamic part of
the telecoms ecosystem.
With 73 percent of
consumers saying that they carry their
phone with them at all times it is clear
that they have become indispensable.
The advent of smartphones has also
brought huge opportunities for
operators well over a third of people
say they use their mobiles when they
are bored or as a key part of their
social life. The benefits of enticing new
customers and retaining existing ones,
are potentially huge, but what are they
looking for?
1. Consumers want more from their
handsets...
Smartphones are clearly in demand.
Across Europe they continue to
outperform standard handsets, now
holding a 45.5 percent market share
in the UK, 41.2 percent in Italy and
40.6 percent in Spain. We have also
seen consumer loyalty shifting away
from the handset brand towards the
OS 17.8 percent of smartphone
owning consumers state that the OS
will be the most important
consideration when choosing their next
handset, compared with only 12.8
percent in December 2010.
2. ...but they want it for less
Price is still a barrier to smartphones
becoming a truly mass market
phenomenon. Across Europe the
upfront cost of handsets is the most
important factor for over 20 percent of
consumers in the UK, Spain and Italy.
3. Some dont know they want it
There are clear demographic
differences among users and non-
users of smartphones. The older,
female customer is not yet engaged
54.7 percent of British smartphone
users are male and 51.1 percent are
aged under 35 but they are likely to
make a purchase if the benefits of
smartphones are presented to them
clearly and simply.
4. Non-smartphone users need advice
Advice and suppor t provides a new
way to reach potential customers and
is impor tant. For ty five percent of
consumers, for example, say that
they have consulted in-store
marketing when making their decision
and just under a third have consulted
store staff for information when
buying their phone. Consumers are
looking for guidance; operators that
get this right are likely to yield
commercial benefits.
5. Multimedia usage is a key area of
growth
The internet is the most used service
on handsets in the UK a fifth of
consumers use social networking more
than texts or calls. Interestingly,
multimedia usage almost quadruples
when a customer upgrades to a new
handset. However, existing consumers
are not using these services as much;
if more can be done to convince them
of the benefits, new revenue streams
will result.
6. Wi-Fi is increasingly a threat
The expansion of smartphones has
had a direct impact on the growth of
data packages and this looks set to
continue. But Wi-Fi usage is also on
the up in the UK over two thirds of
consumers used Wi-Fi on their phones
in November 2011. Users want to
access the internet more but there are
fewer unlimited data tariffs available;
tapping into this market will be a
challenge for operators in 2012.
Whats next?
Nine percent of consumers in the UK
said they would be likely to use their
mobile for watching films, 12 percent
for watching TV and 13 percent for
buying fashion items, while a third
would be interested in using Near Field
Communication for shopping. All these
areas look set to grow and offer a
clear commercial opportunity. ec
What do customers really want in 2012?
KANTAR WORLDPANELS FIONA KEENAN EXAMINES THE LATEST
DATA TO REVEAL CONSUMER PRIORITIES FOR THE NEXT 12 MONTHS
Users want to
access the internet
more but there are
fewer unlimited data
tariffs available
SPONSORED INTERVIEW: AMDOCS

T
he continuing struggles of the
global economy, paired with
the commoditisation of
products and ser vices across
the telecommunications market in
recent years has largely pushed
businesses to begin shifting focus
onto the customer ser vice experience
as a way to stand out from the crowd.
And to do this, the best area to star t
is the most fundamental one:
improving agent experience in
assisted channels, according to
innovative customer experience
systems company Amdocs.
Creating differentiation by
simplifying customer experience
Weve done consumer sur veys
that show that many consumers still
gravitate towards assisted
channels, said Yossi Zohar, head of
product marketing in Amdocs
customer management division. The
US-based company combines
business and operational suppor t
systems, ser vice deliver y platforms
and deep industr y exper tise,
enabling world-leading ser vice
providers to of fer integrated,
innovative and intentional customer
experiences at ever y point of
ser vice.
According to Zohar, while the
majority of consumers are more
technologically savvy than ever, and
will most likely research and look
into a product or ser vice online
before purchasing it, when it does
come to actually buying the product,
most consumers seek help in
assisted channels to finalise their
orders. Because of the commitment
period of buying [mobile or network-
based devices or ser vices], people
want to be able to ask questions
from a live agent; touch and feel the
product they are purchasing, and
fulfill that instant gratification of
getting the new product in their
hands that same day. The same
idea goes for the suppor t side of
things, said Zohar. When something
goes wrong [with a bill, product or
ser vice], consumers get frustrated
and dont have the patience to work
it out themselves, he said. They
want to speak with a live agent, and
ser vice providers cannot always
force them towards a cheaper
channel.
The current experience in assisted
channels that largely exists in the
telecommunications industr y,
however, does not exactly live up to
the standards that consumers are
demanding. According to a recent
white paper on improving agent
experience commissioned by Amdocs
and conducted by Forrester
Research, the gap between
customers expectations and the
ser vice they receive is huge, and
mainly due to the complexity of
systems and processes agents need
to cope with: The work environment
of a customer ser vice agent is
suboptimal. Agents use a set of
disconnected tools and technologies
to find answers to customer
requests. Their tools lack intuitive
navigation, lack data
communications between dif ferent
par ts of the application, have
cluttered screens that contain too
much information, and have overly
complex process flows that rely too
heavily on agents to navigate,
according to the repor t.
Forrester adds that businesses
can derive quantifiable benefits from
focusing on and investing in agent
experience improvement: for ever y
dollar spent on improving usability,
the organisation will realise a benefit
roughly between US$10 and
US$100, by increasing customer
loyalty and satisfaction.
Because of this, said Zohar, it is
impor tant for ser vice providers,
going for ward, to star t focusing a
significant por tion of investments on,
and shift their business strategies
towards improving the agent
experience. Assisted channels are
usually the last resor t [that
consumers turn to], so we have to
make sure that these agents on the
other end can properly ser ve the
consumer, he said.
Zohar cites a conversation he had
recently with one Nor th American
operator that helps explain why
customer ser vice and as a result,
customer experience may be sub-
par. [The operator] was talking
about the 20-20-20 rule of customer
ser vice: what it means is that the
majority of agents working in
customer ser vice call centres are in
their 20s, being paid 20K a year, and
staying on the job for an average of
20 weeks, he explained. When
people dont really care or dont
have the adequate training or
motivation to deliver excellent
customer experience, then that
shows. The majority of the time
agents who should be trained to
ef ficiently and ef fectively solve
customer problems lack the
necessar y training, data or systems.
This, said Zohar, has a major impact
on customer churn.
That is why, back in October,
Amdocs launched Amdocs CM 8.1, a
comprehensive suite of customer
management products designed to
redefine and improve the overall user
experience for customer ser vice
representatives (CSRs). This suite of
solutions helps companies increase
agent ef ficiency and productivity,
using intuitive tools that of fer a fast
and consistent response to customer
inquiries. The solution provides a
simplified and intuitive inter face for
CSRs in contact centres and retail
stores; better tools for handling the
growing volume of smar tphone-
related suppor t calls; and process
automation for faster order taking.
Amdocs CM 8.1 can help cut average
handling time by up to 15 percent,
and training costs by up to 20
percent, for example, by reducing the
number of customer information
screens and intuitively guiding
agents to solutions.
Besides focusing on increasing the
quality of customer experience in
assisted channels, however, said
Zohar, there are two major
approaches that companies need to
take in terms of innovation and
investments: an unassisted
approach, and a proactive one. The
unassisted approach has to do with
the fact that people are getting a lot
more comfor table with the web as
Personalisation
is something that
consumers are
increasingly
demanding from their
experience with
service providers

well as with their mobile devices
(smar tphone, tablet), he said, and
because of this, companies need to
think of more innovative ways to
make the unassisted customer
experience as easy as possible. Self
ser vice initiatives for e-billing and e-
ordering, for example, need to focus
on usability and simplifying
operations not just shifting
ser vices online because it is
cheaper, said Zohar.
The proactive approach involves
ser vice providers getting ahead of
the cur ve and identifying and
solving issues before they reach
the customer. Just as many credit
card companies have initiatives and
systems in place that help them
detect fraud by keeping a close eye
on the spending patterns of their
customers, ser vice providers need to
begin taking this approach, too, said
Zohar.
For example, he said, one common
problem for mobile phone ser vice
providers comes from consumers
travelling and forgetting about
roaming charges. What this usually
results in is consumers returning
home and receiving a huge phone
bill, and then calling their ser vice
provider to complain. The approach
here should be closely tracking
consumers usage patterns so, if
their system suddenly notices a huge
spike in charges, they can notify the
consumer ahead of time. This can
happen in something as simple as
an email or an aler t on the
customers smar tphone that their
next bill will be higher than usual,
and they can click on link to find out
why, suggested Zohar.
Personalisation is something that
consumers are increasingly
demanding from their experience with
ser vice providers too, but it is
something that operators especially
the large ones are still tr ying to
figure out, he said. This, Zohar
explained, requires a lot of analytics
to tap into and extrapolate on
customer intelligence, enhancing
flexibility and customising of fers. As a
star t, though, personalisation can be
implemented as simply as following
up with customers in a timely manner,
he said.
For example, after a consumer
purchases a product, it would be
useful if a company checked in on
them in an adequate time frame to
take note of their satisfaction level
with any product or ser vice. That way,
any problems can be detected sooner
and resolved quickly and ef ficiently.
Similarly, detecting low data usage of
a customers brand new smar tphone
may reveal that the customer does
not understand how to use it, which
can then be addressed by sending
the customer a tutorial video
proactively to prevent customer
dissatisfaction and potential product
return.
Using increasingly tech-savvy
consumers to their advantage, too,
ser vice providers need to develop
innovative ways of fostering loyalty
and decreasing churn. In the age of
social media, for example, ser vice
providers can use tools already at
their disposal to enhance customer
experience, said Zohar, for instance
monitoring Twitter to gather
consumer feedback.
Overall, said Zohar, there are many
innovative approaches for ser vice
providers to take, but the most
impor tant goal of converging
platforms, technologies and
depar tments is to ensure that
consumers get a single version of
the truth. Often, he said, a lot of
customer dissatisfaction arises from
the fact that what consumers hear
online versus in-store and/or from
customer ser vices agents may be
dif ferent. Information needs to be
streamlined, so that ever y
depar tment and area of a company
has the same common information.
In terms of networks and systems,
consumers can, for the most par t,
get the same value across the
board, said Zohar. That is why
improving customer experience is
impor tant for creating
dif ferentiation.
And with revenue star ting to
flatten overall on the consumer side,
said Zohar, it is becoming
increasingly impor tant for ser vice
providers to extend that push
towards enhanced customer
experiences onto business
customers, too.
According to Amdocs, enterprises
often account for a third or more of
ser vice providers total income,
which is why the companys latest
solutions launch is geared towards
enhancing the business customers
experience. Amdocs Enterprise
Customer Management Ser vice
Solution empowers enterprise
customers to self-manage their
accounts, reduce average call
handling time and increase first-call
resolution as well as cut suppor t
costs and field ser vice visits, while
its Enterprise Ser vice Fulfillment
Solution integrates ordering and
fulfillment processes, reducing time
to market and deliver y lead times for
complex enterprise ser vices.
So, overall, whether it is about
enhancing the customer experience
of a single consumer or a large-scale
business, when it comes to
developing products and ser vices
nowadays, what companies really
need to star t asking first and
foremost is whether their business
plans are really focusing on the
customer, said Zohar.
You have to transform your
business around customer-
centricity.
www.amdocs.com
Information
needs to be
streamlined, so that
every department
and area of a
company has the
same common
information
Amdocs 2012. All Rights Reserved.

Simplify your customer experience
with Amdocs
Retain and grow your customer base by creating differentiation through a simplified
With Amdocs Customer Management solutions, service providers can improve margins
without compromising the customer experience. By optimizing sales and service processes
across assisted and unassisted channels, you can create the differentiated customer
experience that will win in the market, and proactively drive the efciency demanded by
your business.
To learn more, visit www.amdocs.com/solutions/simplify-experience.
D
riven by rising competition and
a new globalised consumer
age in which happy, loyal
customers are your best
marketing tool and unhappy customers
your worst nightmare, operators are
adopting customer experience
management (CEM) strategies to build
brand loyalty, turn customers into
advocates, reduce churn and increase
spend, often cutting operating costs in
the process.
It looks like a win-win situation, but it
usually requires far-reaching changes
within an organisation, from the mindset
of upper management to the attitude of
sales staff in the smallest store.
"In general, operators don't give a
good customer experience today, and
that's because of the way their
organisations are set up," argues Colin
Shaw, the founder and CEO of customer
experience consultancy Beyond
Philosophy. "If your organisation is
customer-centric then, surprise,
surprise, you'll provide a customer-
centric experience, but if it's focused
internally then, surprise, surprise, what
you'll get is an internally focused one."
But how should operators, with their
entrenched business cultures, switch
from an internal focus on profit margins
and the bottom line to one that places
customer needs, experiences and even
emotions and feelings at the heart of
their business?
Take a look at Apple. If shoppers
sleep outside your stores just to be
among the first to buy a new product,
it's obvious you enjoy fanatical brand
loyalty. Apple is one of very few
companies that can boast that kind of
success, and the iPhone manufacturer
did not get there through pure luck
alone. It created brand loyalty and
turned customers into active promoters
of its products through a well-thought-out
customer experience strategy, focused,
above all, on ensuring people get what
they expect.
"Many carriers follow Apple for best
practice in this respect. Many of the
newer support practices we now see in
Europe owe much to the Apple Genius
and in-store Genius Bar concept," notes
Emma Mohr-McClune of Current
Analysis.
Telefnica O2's Gurus and FT-
Orange's Orange Care are just two
examples of operators taking a leaf out
of Apple's book. But improving customer
service, whether in-store, online or via a
call centre, is just one part of an
effective CEM strategy.
"Interestingly, operators are one of
the top industries putting resources into
customer experience, but the danger is
they could be putting lipstick on a pig.
The cynical view is they're just
rebranding jobs to 'customer experience
this' or 'customer experience that' but
nothing has really changed much. The
optimistic view is that they are really
embracing customer experience and
have recognised they need to change,"
says Shaw.
For real change, a CEM strategy must
be implemented from the top down and
touch virtually every part of an
organisation. Silos should be broken
down, departments made to
communicate and customers should be
delivered a seamless, transparent,
simple and friendly experience.
"CEM should be led from the top,
otherwise it will struggle to maintain a
foothold among the many shifting
strategic priorities operators face these
days. Ultimately, the CEO should instil
the sense that CEM is at the heart of a
carrier's core values," says Mohr-
McClune.
"Operators need to build CEM into the
very fabric of their go-to-market
strategies, from point-of-sale to support
and customer lifecycle management.
That's a tall order, requiring some quite
substantial changes to organisational
processes."
Tall, yes, but not impossible.
In the past year, Belgacom has done
just that. Belgium's leading mobile and
fixed-line operator launched a CEO-
supported CEM strategy that, in the
space of just 12 months, reduced early
churn rates by between 20 and 27
percent, decreased detractors by 10-15
percent and increased promoters by
between five and 10 percent, resulting
in a significant improvement in Net
Promoter Score.
According to Geert Standaert, vice
president of customer operations at
Belgacom, it was achieved by being
more simple and friendly.
"We assigned a Mr Simple and a Mr
Friendly within the organisation: I
became Mr Friendly and the head of
marketing became Mr Simple. Our job
Designing a strategic blueprint for
customer experience
CUSTOMER LOYALTY HAS NEVER BEEN OPERATORS' STRONG POINT, ARGUES
ANDREW EATWELL, BUT THAT IS SLOWLY STARTING TO CHANGE. AND CHANGE IT MUST
The danger is
operators could be
putting lipstick on a
pig
was to work in tandem to make doing

business with us more transparent and
simple, which in turn makes the
customer more satisfied," Standaert
explains. "We didn't do any
reorganisation but we wanted to kill
silos and did so by creating cross-
business unit workgroups involving more
than 200 people, who carried on doing
their existing jobs at the same time."
Belgacom also set ambitious targets
for a variety of operational and business
KPIs from call answering and lead times
to early churn, it created a range of
incentives to make customer-facing staff
more engaged, and went public with its
commitment to improving customer
experience.
"We knew from the start that the
targets would be very hard to achieve,
but we wanted to inspire people to be
very creative, very innovative, to think
out of the box with different ideas," the
Belgacom VP says. "In some cases we
even exceeded our targets."
Belgacom customer service now
answers 90 percent of all calls in under
two minutes, up from 70 percent before
the CEM strategy, and schedules a call
back at the convenience of the
customer if the call is not answered in
that time. Meanwhile, waste calls that
do not translate into sales have been
reduced by one million.
The operator is now focusing on
ensuring a seamless experience so a
customer who emails about a problem
and then escalates to a phone
conversation deals with someone who
knows the history of the issue and can
quickly address the problem crucial
in an age when customers will often
have turned first to the internet and
social media for information and may be
just as knowledgeable as the customer
care representative they're talking to.
In the same vein, Belgacom is also
reducing its number of outsourcing
partners from 40 to eight in 2012,
offering longer commitments and more
volume to those who ensure more
engagement with customers.
Seamlessness, simplicity,
transparency and engagement are
crucial factors, and even seemingly
small changes such as focusing less
on call times and more on call quality
can result in dramatic improvements.
Hence monitoring every customer
touchpoint in an organisation, surveying
customers and correlating customer
satisfaction, experience and Net
Promoter Scores with operational and
business data such as lead times,
repeat call, call waiting times and churn
is critical to understanding what
elements of a CEM strategy are most
effective.
"Many organisations operate different
touchpoints in silos, but what they need
is good control over all touchpoints with
a common set of technologies and
processes that map customer
experience across all channels,
including social media," says Keith
Wilkinson, Alcatel-Lucent Enterprise VP
and general manager for the UK and
Ireland.
Wilkinson acknowledges, nonetheless,
that while "you can have all the
customer experience technology in the
world, the company must ultimately be
focused on wanting to serve the
customer."
The path to best-in-class CEM is a
four-step process, says Beyond
Philosophys Shaw. First, companies
must identify exactly what experience
they want to deliver to customers.
Second, they need to look at what parts
of the current customer experience are
adding or destroying value, what positive
or negative emotions are they evoking,
taking into account not just what
customers say in surveys but analysing
how they behave and act. Third, they
need to design a deliberate experience,
and most importantly, fourth, make the
entire organisation customer-focused so
the strategy sticks.
"Operators tend to look only at the
functional, rational aspects of a
customer experience, they get obsessed
with lead times, delivery times, repeat
calls. What they don't think about is that
people are not rational, people are
driven by emotions," Shaw notes.
"Loyalty is an emotional bond and it's
that bond companies should be looking
to build with their customers, but how
often do senior managers in operators
turn round and ask 'what emotions are
we evoking in our customers today?'" ec
For many years Customer Satisfaction
was the most widely used benchmark
for judging how well a customer
relationship strategy was working. But
asking if your customers are happy or
not is only useful up to a point, and
doesn't necessarily predict anything
about loyalty.
A study by the Harvard Business
School found that 20 percent of
"satisfied" customers planned to leave
the company in question, while 28
percent of "dissatisfied" customers
intended to stay.
Net Promoter Score, in contrast,
offers a better indication of loyalty and
ongoing spend. But though it gives you
an idea of how likely your customers
are to stick around and recommend you
to family, friends and colleagues, it
doesn't directly measure their experience
of doing business with you.
"NPS is often influenced by other
factors such as perceptions of the
organisation in general, pricing and the
promotional strategies of competitors,"
notes Brendan Dykes, principal business
consultant at Alcatel-Lucent Enterprise.
A more accurate gauge of loyalty is
Customer Effort Score. It directly
measures how customers experienced
each transaction by asking them how
easy or difficult it was to complete:
eight out of 10 customers who have a
high effort experience are more disloyal
than before.
"Customers don't want to have to put
in too much effort to do business with
you," Dykes says. "That's an important
message for operators to grasp."
Want to give a good
customer experience?
Measure the effort
N
o longer willing to hang
endlessly on the line to speak
to a live agent, consumers
are increasingly taking their
gripes online when they have an issue
with a telecoms service provider.
Its easy to see why. By raising a
query or reporting an issue
electronically, not only do customers
spare themselves the time and
frustration so often involved in making
contact by phone, they also eliminate
the need to repeat themselves ad
infinitum.
Whether they have emailed their
query or submitted it directly via an
operators web site, the process offers
them a reassuring audit trail of their
communications that, along with the
assigned case number, they can refer
back to at any time.
The downside is that response times
can be slow up to two days in some
cases. Which is one of the reasons that
increasing numbers of consumers are
taking to social networking forums to air
their grievances rather more publicly.
They have discovered that, in some
cases at least, a good online rant can
have a surprisingly quick response from
the service provider in question.
The challenge for operators is how to
draw all of this together to create that
much sought-after fully joined-up
customer experience through integrated
back-end systems and processes. So
whats involved logistically?
Irish operator Eircom has just
invested in a new unified technology
platform to ensure a closed-loop
customer service experience that
incorporates online customer feedback
captured via social networks like Twitter
and Facebook.
Because it considers the online
channels so strategically important to
the types of customer it wants to
attract, Eircom has established a
dedicated team within its customer care
operation to look after social media,
web-based queries, chat and email as a
holistic activity.
This is achieved using Lithium, an
integrated social community
management platform the operator has
just deployed. This lets us post and
track comment via Facebook, Twitter
and our own forums, explains Dervilla
Mullen, Eircoms director of online.
The platform spans all three of
Eircoms brands - Eircom, the fixed
broadband and voice company, and its
two mobile businesses, eMobile and
Meteor. One of its features is the ability
to listen for mentions of Eircom and
its subsidiary brands across the various
social media communities - giving the
company a chance to pick up and
address any customer issues quickly,
preventing bad news from spreading.
Crucially, the Lithium platform
connects into Eircoms central case
management system, as used across
other more traditional contact channels.
This means that whether a customer
issue comes to us by telephone, in
store or via the web, all contact is fully
integrated and tracked - there is no risk
of losing Tweeted enquiries, for
example, Mullen notes. When we use
these channels its not just to have a
nice brand conversation; we can fully
resolve any issues.
Another advantage is the rich
statistics Eircom can now draw together
and analyse, giving the company
valuable trend information by channel,
or across the board.
That Eircom is listening to its
customers via social media appears
to have gone down well with
customers: Mullen repor ts that 99
percent of customers affected are
delighted with the development.
[The listening and interaction] isnt
done obtrusively, but theyre
impressed to find that just mentioning
a problem online has proactively
triggered a resolution, without them
having to come to us.
This service resonates particularly
with customers of Meteor, Eircoms
mobile service targeted at 15-25-year
olds. Says Mullen: These customers
are most likely to speak their mind on
Facebook when theyve had a poor
service experience, but were now able
to nip those frustrations in the bud and
turn the situation around.
Meteors Facebook presence has
amassed 80,000 likes or fans.
Competitively, it is a differentiator.
Although, as a mobile operator, we are
third in Ireland by customer base we
have more online followers than
Vodafone or O2, Mullen notes. Via
social media we are punching above our
weight.
Operators that neglect social media
channels in their interactions with
customers do so at their peril.
Consumers place a lot more weight
on reviews and comments posted in
social forums than on the claims made
in operators own publicity, notes
Closing the customer service loop
OPERATORS MUST INCORPORATE SOCIAL MEDIA PLATFORMS INTO THEIR MULTI-CHANNEL
CUSTOMER SERVICE STRATEGIES. SUE TABBITT ANALYSES HOW BEST TO APPROACH THIS
Operators
typically reach just a
small percentage of
their subscriber base
with their own web
pages
Russell Palmer, industry solutions

principal for communications and media
at Pegasystems, a vendor of business
process management (BPM) and
customer relationship management
(CRM) solutions. Its therefore vitally
important that service providers are
monitoring those conversations to
understand the feeling of the market in
response so what they are doing.
As operators continue to grapple with
the complexities of internal
organisational silos, which prevent easy
integration of distinct customer
information and billing systems, the
growing importance of social media
channels intensify the need to
transform the way customers are
managed at the front end, Palmer
suggests.
In relation to Twitter, this means
being able to receive customer
communications, routing issues to
someone who can do something about
it (via a case management system);
resolving those problems; and then
communicating the results back to the
customer to ensure satisfaction.
Another technology vendor to
capitalise on the rising power of
social media is Nokia Siemens
Networks, which has launched a
Facebook app that enables
companies to move their online
customer service activities onto
social media platforms. The
new app, designed
primarily to enable
customers to check their
account balance, browse and
buy special offers and
subscribe to services, can
also be used to channel
customer support issues.
Traditional online services
are not considered effective in
solving problems, explains Soma
Velayutham, head of product
management for customer experience
management at NSN. Our research
shows that just 45 percent of the
customers in the US, for example, are
satisfied with the current way their
providers manage inquiries or
complaints online. Making social media
platforms part of an operators multi-
channel customer self-care offering
opens up a huge potential to encourage
interaction between customers and their
providers.
Social networking platforms offer the
convenience of the internet combined
with the real-time service, he notes.
And their reach is enormous. Facebook
has over 800 million users and
Google+ has attracted 25 million new
users in just two months, Velayutham
says. While Facebook, Twitter, YouTube
etc break new records almost every
month, operators typically reach just a
small percentage of their subscriber
base with their own web pages.
NSNs Facebook app is pre-integrated
with the companys unified charging
solution. To create new offerings, no
special charging/billing system skills
are required. Just put the needed
features together and the new offering
can be automatically posted via
operators Facebook page. If people are
interested and click the buttons, they
are automatically routed to a secure
environment in the operators network.
Integration with subscriber databases
or CRM systems (to change personal
data via Facebook), or with the charging
system (to top up or send money to
another account), is just the starting
point, Velayutham adds. Looking
ahead, self-care on social media could
support an even more personalised
user experience with chat tools for
direct support, for example.
Other options for the future include
crowd sourcing for customer support
(encouraging customers to help each
other), or location-based advertising
from third parties, Velayutham notes.
Even real-time information on network
congestions in certain areas could be
delivered automatically, when integrated
into our customer care automation
solution.
Identity management technologies
can help associate the customers
social media ID to their records in
the service providers database,
notes Yossi Zohar, head of
product marketing for
customer management
solutions at technology
vendor Amdocs. Once the
customer is identified, and
their interactions via social
media are handled by
customer care effectively, the
channel can go on to be used to
push promotions to the customer
and influence the customers
followers.
Ultimately, personalisation and
integration are the panacea in joined-up
customer service, concludes Andrew
Mennie, general manager for EMEA at
CRM vendor eGain. A central
repository of knowledge customer
history, products and services,
technical nuances, etc drawn
from multiple platforms and
accessible to all those that
play a role in customer
C
onsumer and enterprise
customers have always
traditionally been kept in
separate silos because their
needs and expectations of service, as
well as their budgets, have been
considered too different to be grouped
together.
However, a number of trends are
emerging that question whether this
approach will continue as the
distinctions between different types of
customer begin to blur.
Of particular interest is the
consumerisation of IT smartphones
can accommodate a higher bandwidth
than ever, the use of tablets is on the
rise and people are allowing their home
and work lives to converge.
As a result, employees are
increasingly using their personal mobile
devices at work to access enterprise
data. A recent survey by Current
Analysis shows that despite company
policy a third of enterprises prohibit
the use of personal devices at work
bring your own device (BYOD) is
happening.
Sandra OBoyle, Current Analysis
service director, business network and
IT services, says that BYOD is
relatively common in knowledge
industries: Its usually the top
executives who are the ones doing it
they bring their own iPads or iPhones in
and then suggest that everyone does
it.
There is also a class of younger user
the digital native for want of a better
expression that is bringing its own
devices into work through frustration
with company IT provision.
Says OBoyle: BYOD really depends
on the culture of the company, the type
of industry and the individuals role
within the business. But it is perhaps a
bit of a distraction from the real issues
people are using mobility to change
business processes and make
businesses more efficient. Its easy to
get distracted by the security and
management issues rather than look at
why people are bringing their devices to
work.
Liudvikas Andriulis, chief marketing
officer at Effortel, which is a virtual
mobile network enabler that provides
transaction processing and
management services for MVNOs as
well as acting as an MVNO itself in
partnership with supermarket chain
Carrefour, has another take on this
trend.
He says that there has been an
erosion in the relationship that mobile
network operators have with their retail
subscribers, driven by the increasingly
powerful brand relationship that
handset manufacturers, particularly
Apple and the Android derivatives, have
built with end users.
Its difficult to see how network
operators can rescue that position
unless they truly differentiate their
services, something that rarely happens
today, continues Andriulis. That can
happen in two ways either in the
provision of unique services and
relationship management, will deliver a
consistent experience for the customer
as well as increase efficiencies and
enhance service performance at the
telco, he says.
At the back end, this requires that
operators map out the customer
journey, irrespective of the interaction
channel, to understand the different
paths this might take and the
implications for the operators
processes and systems. Either you
can manually integrate the different
sources, systems and channels, or
invest in a customer interaction hub
that allows knowledge to be profiled by
channel, personalised customer
experience and can track and report an
interaction that moves cross channel,
he says.
Among those that making tangible
progress with all of this are Vodafone
and Virgin Media, Mennie notes. Others
considered to have made big strides
with social media include RIM, the
developer of BlackBerry, and Belgacom.
There is still a lot of work to be done,
but at least things are moving in the
right direction. Many operators are
already making [the necessary]
investments, and one emerging trend
among larger organisations is that they
are recognising the need to deal with all
of this at a group level, Mennie notes.
By rolling out customer experience
best practice systematically across all
of their operations consolidating
content, diagnostics and navigation and
unifying interaction channels SPs
should finally be able to achieve that
3D picture of each customer account
and the means to act on it, extending a
more personalised experience to
subscribers and in turn increasing
loyalty and ARPU. ec
Blurring the retail and enterprise
customer boundaries
SHOULD TELECOMS OPERATORS BE RETHINKING THE WAY IN WHICH THEY TREAT THEIR
CUSTOMER SEGMENTS TO OFFER A BETTER CUSTOMER EXPERIENCE? EIRA HAYWARD REPORTS
applications that only operators can
deliver, or by delivering exemplary
customer care.
One way could be to cater for the
new breed of prosumer or corporate
home worker customer. Says Andriulis:
It is not uncommon now for some
households to own five handsets, a
couple of tablets and broadband dongle
or two. They rely on those devices
completely, particularly in increasingly
common mobile only households. That
environment starts to look very much
like a small business.
These can be incredibly valuable
households to the operator and
operators will need to go far beyond the
agreed standard consumer SLA to keep
the relationship intact.
We see preferential upgrades,
credits and personal service. We expect
that situation to develop in the coming
years with preferential pricing plans,
household rather than individual billing
and corporate standard levels of
service guarantee, adds Andriulis.
Lee Myall, UK regional director at
Interoute (which it must be said doesnt
run a consumer business) agrees there
is a case for a different level of service
agreement that meets the needs of
prosumers.
Many people have really
sophisticated IT set-ups in their homes,
but no one is really offering a halfway
house service plan between consumer
and enterprise that caters to their
needs. The advent of FTTH really
changes the level of what can happen
in the home, he says.
While some telcos may not appear to
understand the extent of the
opportunity, there are those that most
certainly do. T-Systems, for example,
recently announced that its CEO
Reinhard Clemens now also has full
responsibility for IT at Deutsche
Telekom. The Germany-based operator
intends to consolidate the entire
groups IT activities in one department,
an indication that there could be some
changes in the offing.
Not everyone agrees, however.
Reinhard Zuba, chief marketing officer
at Telekom Austria Group, says: Its
not about silos but about identifying the
needs of a segment and then designing
product and service around those
needs. At Telekom Austria we provide a
convergent solution - we are a
converged and total communication
provider and we find that the demand
for high quality service is increasing.
Camille Mendler head of enterprise
verticals at Informa Telecoms & Media
believes that if telcos think smarter
about their customers they can use
their expertise to bridge the gap
between the consumer and the
enterprise and also create new
business opportunities for themselves.
She cites the example of Orange
Business Services joint venture with
Veolia Water, m2O city, to provide smart
metering services.
Peter Glock, cloud services director
at Orange Business Services
comments: At France Telecom Group
we have a traditional approach, our go-
to-market approach is segmented by
the size geography and market sector of
our customers.
But are the offers any different for
these market sectors or are they
converging?
Years ago we had two remote
access offers for our customers one
was SME and there was a different one
for enterprise. Now theyre branded
differently but theyre the same offer
because the requirement is the same,
says Glock.
Perhaps there isnt a right or wrong
way to approach different customer
segments, its more about having a full
view of the customer and ensuring that
service expectations are met as well as
potential opportunities explored and
exploited.
Yossi Zohar, head of product
marketing for Amdocs, says that many
telcos are running disparate systems
for their enterprise, consumer and SME
customers. To deliver optimal
customer experience you need a 360
degree view of the customer regardless
of where they are. Its hard to give
them a good experience without this.
Although telcos are providing
sophisticated services their customer
support systems are not necessarily up
to date.
So what can we conclude? A key
driver of differences in the treatment of
enterprise and consumer customers
has been that in a B2B relationship
there are many roles, fulfilled by
different people within the business,
requiring more complex account
management; whereas in a consumer
relationship all of these roles are
typically fulfilled by one person.
However many organisations are looking
to blur the lines, particularly where
common services are provided to each
sector, and similar skills are required,
and this is increasingly prevalent where
consumer devices are making their way
into business.
There economies of scale to be had
in blurring the lines between enterprise
and consumer, but there is also a
challenge in recognising the areas
where differing needs still exist and in
ensuring that the customer experience
is consistent across all touch points. As
Duncan Barnes, director in consulting at
Deloitte concludes: The trick is to be
able to differentiate between different
roles, and different service needs, to
different people within business
customers, and only treat those with
very similar needs and expectations to
consumers in the same way as
consumers otherwise commercial
aspects of the relationship may be
damaged. ec
The trick is to
be able to differentiate
between different
roles, and different
service needs
SPONSORED INTERVIEW: ORACLE

B
RAND loyalty in the
telecommunications industr y
does not have the same pull
as in more personal sectors
such as cars, per fume and
toothpaste. Consumers looking for
mobile and broadband network
ser vices do not usually care about
who is providing their ser vice, just as
long as it is fast and reliable; making
relationships between ser vice
providers and customers somewhat
fickle. Looking to the future, however,
Business and Operations Suppor t
Systems (B/OSS) vendor Oracle
Communications believes that brand
loyalty can be developed by positive
customer experiences, which can
differentiate telecommunications
ser vice providers from one another.
Oracle offers a fully integrated stack
of business hardware and software
systems that help companies
overcome complexity, ignite innovation
and improve the overall customer
experience. Oracles systems span the
communications industr y technology
landscape from carrier-grade
ser vers, storage and IT infrastructure,
to mission-critical business and
operational suppor t systems and
ser vice deliver y platforms enabling
ser vice provider to enhance their
customers experience across any
channel or point of contact.
Rajeev Tankha, senior director of
product marketing at Oracle
Communications said that the
companys business solutions have
been changing and developing to meet
this growing impor tance of customer
experience in telecommunications.
Customer experience, until ver y
recently, was another name for
providing CRM [customer relationship
management]-based interactions
between customers and as a result,
what happens with that is instead of
giving great customer experience, it
just becomes about improving your
customer contact information
repositor y not about looking at the
customer from the life-cycle
perspective, he said.
When Oracle began looking seriously
into developing software that could
reshape and redefine the overall
customer experience in the
telecommunications industr y then,
said Tankha, the company realised
that not only could a better customer
experience be created by better
ser vice, but that consumers could
actually grow to like using a telecoms
ser vice because its ser vice was so
tailored to their needs, they identified
with it and it boosted their self-image.
In other words, customer ser vice
experience was also improved by
developing brand loyalty a vir tuous
circle.
He said that one of the biggest
issues that telecom companies are
facing today is how to provide a
customised customer experience
where those buying products or
ser vices will feel a connection to the
brand on a more personalised,
individualised level which ultimately
spells greater loyalty to the company.
Tankha said telecoms need to get to
the core of what customer experience
actually means, looking at it from a
customers perspective instead of from
a telecommunications perspective.
From that, he said, companies can
shift their thinking about customer
experience once they establish what it
takes to foster brand loyalty. Think of
this in the same way as BMW, for
example people dont necessarily buy
[these cars] because they drive better,
but because they have an attachment
to them, and associate BMW with their
lifestyle, said Tankha. That [type of
loyalty] where the phone companies
are tr ying to get to that, I think, is
the challenge in a new style of
He said that it is becoming
Fostering brand loyalty in the
telecommunications sector
The customer
relationship must be
built from the outside
in, rather than the
inside out
increasingly impor tant for companies

to understand and build better
relationships with customers to tr y
and gain loyalty. [Ser vice providers]
have to understand exactly who you
are, what interactions you would like
with [them], what interactions youve
had in the past, etc., so that they can
recognise customers needs said
Tankha. Once that happens, the first
building block is understanding what
kind of relationship [customers] want
to have with [ser vice providers] rather
than the other way around. Thats
where the main difference lies [the
relationship] must be built from the
outside in, rather than the inside out.
Gordon Rawling, senior marketing
director at Oracle said that being able
to establish these relationships is
where differentiation in customer
experience will come from between
telecoms. Many of the ser vice
providers [Oracle] is talking to have
seen a future not so far away where
cer tainly in the more mature markets
the ability to differentiate the
[customer] experience purely on the
basis of network coverage or
bandwidth is not a sustainable
differentiation.
Where ser vice providers become
noticeably different in terms of
customer experience is when they
connect their insides said Rawling
meaning converging systems and
platforms within a company to make
them more seamless and efficient
creating the oppor tunity to develop
meaningful relationships rather than
just process transactions. I think we
need to get ver y conscious and
coherent in terms of what we really
mean when we say things like
relationships, he said.
One problem that most ser vice
providers need to solve in moving
towards developing better customer
experiences and relationships, said
Tankha, is that these companies often
have little or a poor quality of data
about their customers; which makes it
hard to understand customers needs.
Phone companies usually have largely
inconsistent or incomplete data, for
example, he said. When theyre
tracking customer experience, most
phone companies just track the last
call you had with the call centre, and
thats no good. The traditional
method of tracking customer behaviour
based solely on the last time they
phoned with a complaint or inquir y,
means that chances are, that data is
not relevant any longer, said Tankha. In
addition, he said, customer ser vice
agents often do not know how to
simply address problems customers
may have, or make appropriate
recommendations: They often dont
have the systems or capabilities to be
able to give you instantaneous
answers on what youre calling about,
he said. If ser vice providers
understand how to tackle the problem
of converging all systems and
departments which Oracles software
systems largely help to facilitate the
next piece of the puzzle then, is to
understand how to create a different
shade of experience to suit the needs
of the various types of customers each
company has.
Different customers have different
needs somebody who is spending
100 dollars a month versus someone
who is spending 1,000 dollars a month
may need different levels of
interaction, said Tankha.
One element of the customer
experience that needs to undergo
fundamental change, he added, is the
current system in which most ser vice
providers decide what product will be
given to their customers, instead of
the other way around: With this, you
get a package or bundle that might not
work for you, said Tankha. Youre not
getting bundles because [ser vice
providers] are tr ying to predict what
your buying behaviour is, but rather,
because the systems theyve got are
unable to allow you the flexibility to
choose your own bundle and create
what you want, instead.
Creating brand loyalty amongst
customers through a more
personalised user experience can
largely mean profitable growth overall
for telecoms, said Tankha. With this in
mind, providing a consistent,
personalised and interactive
relationship with customers requires
three important components to be
implemented by telcos, he said. First
is the ability to provide seamless
multichannel interactivity so that
customers can choose the channel of
their choice, when they need it, he said:
This is not just for ordering, but for all
interactions troubleshooting, billing
inquiries, customer care, etc. Being
able to start my customer experience in
one channel and finish in another
thats the first component of
interactions. Second, said Tankha,
service providers need to get away from
the traditional idea of I, as a service
provider know whats good for you, and
Im going to offer you a product or a
bundle based on that. He said that
ser vice providers need to start giving
customers the flexibility to allow them
to create their own products and
bundles based upon the standard
ser vices available. If customers want
to bundle their broadband and mobile
ser vices and need 100Mb of
broadband a month, and only 200
minutes of mobile time, for example,
they should be able to choose that,
said Tankha.
Lastly, is the focus on creating
loyalty and attachment: Loyalty
doesnt just mean getting your
customers to buy more its about
creating a sense of wanting to be
associated with a particular brand,
offering flexibility and developing a
different business model of how you
interact [with customers].
The whole mentality around doing
business needs to change overall then,
where the biggest change required is
for ser vice providers to move away
from a focus on selling, and more
towards interacting with customers.
What its really about is changing the
focus of what youre doing which
isnt to say that youre not tr ying to
improve your business and
relationships, but its about focusing
on those interactions, said Rawling.
This mentality is whats colouring and
driving the way in which [Oracle] we are
making our software.
Rawling said that a big contributing
factor to the current disconnect that
can exist in terms of customer
experience has to do with the
technology that is being used to
operate telecom systems.
Part of the problem thats
happened in the industr y is you have
lots of bits of these processes
supported by lots of different bits of
technology that work in ver y different
ways and if the customer has done
things on multiple channels, then
theyve likely had an unsatisfactor y
experience, said Rawling. With this in
mind, one of the benefits of the
portfolio of software systems that
Oracle is offering is the ability of these
products to supports all areas of a
system, making sure it works in
unison. However, noted Rawling, the
biggest mistake the industr y could
make is to think it is possible to buy
one single bit of technology to solve all
customer experience management
problems:
It is also ver y much about changing
the way in which the business works,
and working on really touching the
customer.
www.oracle.com
Loyalty doesnt
just mean getting
your customers to
buy more
Copyright 2012, Oracle and/or its affiliates. All rights reserved. Oracle and Java are registered trademarks of Oracle and/or its affiliates.
Other names may be trademarks of their respective owners.
oracle.com/goto/communications
Get Better Results With Oracle
100 of the 100
Top Telcos
Oracle Communications
E
uropean Communications held
a successful customer
experience seminar in London
on 18 January.
Attendees saw presentations from a
range of speakers from across the
telecoms ecosystem and participated in
a lively discussion on how to provide a
best-in-class service.
Kantar Worldpanels customer insight
director Fiona Keenan kicked off
proceedings by presenting the latest
data on what smartphone consumers
are using now and what they want in
the future.
On the plus side satisfaction levels
are rising, reported Keenan, but
fortunes among handset manufacturers
remain mixed. Canada-based
BlackBerry manufacturer Research in
Motion is losing ground in most
European markets except Spain, while
Nokia is down across the board.
At an OS level, Android has
overtaken Apples iOs in all European
markets surveyed. As Alcatel-Lucents
head of strategy Peter Spencer pointed
out, it is important not to idolize
Apple despite its customer experience
successes and amid the
overwhelmingly positive media
attention.
When choosing a handset, OS is now
almost as important as the brand of
the device itself according to UK
consumers, added Keenan.
Friends and colleagues remain the
most popular source of information for
UK consumers when buying a handset,
but the importance of retail should not
be forgotten with store displays coming
a close second.
Keenan also pointed out that the
trend of consumers moving from PAYG
to contract tariffs will continue as will
increases in data usage. The flip slide
is that is consumers want value they
want more for less.
Andrew Jones, managing director of
service design at Openreach, took the
stage to give an overview of how
customer experience works in practice
from an operators perspective.
Openreach, which is part of BT
Group, looks after the UKs local
access network. By providing a wide
range of operators with their
Understanding customer
experience seminar
Whereas
operators have
traditionally separated
consumers into retail
or enterprise groups,
there are a myriad of
other segments that
operators could target
specifically from
women to green
consumers
European Communications will be

hosting a new seminar on the theme of
Big Data in April 2012. Programme
information will be available soon on
www.eurocomms.com. You can also
follow us on Twitter @eurocomms to
keep abreast of the latest
announcements.
To register your interest in attending
the event now; please visit
www.eurocomms.com/seminar and
complete a registration form. We will be
in touch with further information as it
becomes available.
Attendees who attended our recent
Understanding Customer Seminar in
January were overwhelmingly positive:
100% of attendees who took our post-
event feedback survey described the
seminar and the programme content as
very good or good.
We welcome all feedback so if you
have any further ideas please feel free
to contact us at
marketing@stjohnpatrick.com.
Pre-register for our Big
Data seminar in April
Andrew Jones, managing director (service design), Openreach
infrastructure needs, Jones said the
companys mission was to provide an
open access to all their customers
equally.
We not only have to look after our
immediate operator customers but also
have to keep an eye on the end users
too, said Jones.
Key to Openreachs current work is
laying a fibre optic network to cope with
the continued growth of mobile and
video services.
Jones said the board has a huge
pile of KPIs that it monitors in a
weekly meeting, but when pushed
said there were perhaps half a dozen
that were considered more key than
most.
The problem, he acknowledged, was
that the telecoms ecosystem remained
a very complex one that involved a
supply chain which needs to be
simplified.
Dan Adams, executive director of
communication, media and technology
at consulting firm Accenture, focused
on the physical retail side of the
There were three key trends, he said:
the shift from retailing to me-tailing,
improvements in service management
and developing a flexible supply chain
to support cross channel retailing.
The me-tailing strategy defined as
treating consumers as distinct entities
has potential far-reaching
consequences and tied in with some of
the data Kantars Keenan pulled out
earlier.
Whereas operators have traditionally
separated consumers into retail or
enterprise groups, there are a myriad of
other segments that operators could
target specifically from women to
green consumers.
Equally, this precision retailing will
require stores to diversify some will
be large showrooms but temporary pop-
up stores are equally valid depending
on the audience.
The common denominator, however,
is an enjoyable and entertaining
experience.
Sanjeev Kumar, head of telco
consulting Europe at consulting firm
Infosys, concluded the presentations by
advising telcos to focus on
differentiation.
To do this, he urged participants to
learn from best practice in other
industries.
There were four key areas to focus
on, according to Kumar: provide a
seamless customer experience across
all channels; user customer data to
improve their experience; develop
differentiated services; and engage
customers hearts and minds through
authentic and serious conversation. ec
If you missed the event you can still catch up with all the presentations by visiting
www.eurocomms.com/video and selecting from the below:
Dan Adams, executive director, communications, media and technology at Accenture,
outlines what operators need to do to improve their physical retail outlets in order to
provide a great customer experience.
Andrew Jones, managing director (service design) at Openreach, outlines how the UK-
based company defines and delivers customer experience with the aim of becoming a
leading customer-focused organization.
Fiona Keenan, consumer insight director at Kantar Worldpanel, looks at the latest data
from across Europe that shows what consumers are really looking for in 2012.
Sanjeev Kumar, head of telco consulting Europe at Infosys, looks at how the telecoms
industry is evolving to embrace new technologies, competitors and what learnings can
be applied from other industries.
And joining the speakers on the panel discussion:
Julian Johns, director EMEA Enterprise Sales, Logmein
Gordon Rawling, Senior Marketing Director Oracle Communications
Peter Spencer, Head of Strategy and Portfolio, Alcatel-Lucent
Yossi Zohar, Marketing Director Amdocs
Speaker videos
Sanjeev Kumar, head of telco consulting Europe, Infosys
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O
perators have been happy to
blame a lack of standards,
vendors and themselves for a
lack of professionalism in their
back office systems over the past decade.
But times have moved on and, says
Martin Creaner, president and CEO of
industry body TM Forum, 2012 should be
the year when concrete changes will be
made.
Operators have finally understood that
they can no longer carry on with back
office systems that resemble a dogs
breakfast, Creaner told European
Communications.
Its insane that big operators have lived
with them for the last 10 years, but I have
spent a lot of time over the last few
months talking with many of them and
they know the world is moving on and
that they have to act.
Crucially, Creaner says that while he
has heard this refrain before this is the
first year he believes that they actually
mean it.
The reason? All conversations come
round to threats provided by the OTT
players, replied Creaner.
While operators now openly accept that
companies such as Facebook and
Amazon will disrupt their business models,
the battle will be fought in the back office.
From a business point of view its not
about the app that sits on your phone,
said Creaner. All the profitability will sit in
the back office and will be determined by
how you analyse customers, provide
customer care and build new services.
The president says several factors have
come together to give him cause for
optimism. On the standards front, which
TM Forum advocates as the biggest
challenge to implementing a professional
back office, there has been continued
uptake and collaboration over the year.
Twenty-five vendors have now put their
products up for certification and many are
moving towards out-of-the-box capability
a key element in enabling operators to
automate their systems and deliver new
services more effectively.
Creaner says there is a much more
collegiate relationship between vendors
and operators that can only be good for
the industry as a whole.
At the final stage of the procurement
process it was common for suppliers to
drop their price by offering versions of
their products that didnt conform to
industry standards or gave operators a
short-term fix.
Now, Creaner says, operators have
admitted that their back office systems
arent agile enough and that they must
invest in long-term solutions.
The market has matured and both
parties know they need the other to be
successful if everyone is to survive and
prosper, said the president.
However, a maturing market brings its
own challenges.
Consolidation reduces choice and it is
increasingly difficult for the smaller
players to strike a deal, warned Creaner.
There is probably less innovation as a
result.
Ultimately, the stakes for getting it
right are high. Creaner predicts that
operators have an 18-24 month window
to ensure their back office systems are
able to take advantage of the data
revolution.
Operators need to grasp that they will
be taking a smaller slice of a much bigger
pie, concluded Creaner. To do this they
need to control the data and then provide
the connectivity. The back office will be
the hub for this. ec
THIS YEAR SHOULD SEE OPERATORS BACK OFFICE SYSTEMS FINALLY GET GIVEN THE
ATTENTION THEY NEED TO DRIVE NEW BUSINESS MODELS
54 Mobile Security: Must Do Better
What more should operators be
doing to protect their customers?
BACK OFFICE
2012: the back office moves forward
Operators need
to grasp that they will
be taking a smaller
slice of a much bigger
pie
BACK OFFICE
T
ightly integrated operational and
business support systems (OSS
holistic customer profile on
demand to any application.
That smartphones and tablets have
transformed the way consumers interact
with online services can only be a good
thing for the convenience of users and
retailers, but also for service organisations
and network operators targeting them with
enhanced propositions.
But what of the security issues as
consumers expand the ways they use their
handsets? Who is responsible and how
crucial is it to retaining consumers trust
that operators play their part in
safeguarding their advanced mobile
transactions?
There are multiple par ties who
have a vested interest in keeping
mobile devices safe, including the
person using the mobile device, their
network operator, any applications or
ser vices they are interacting with, and
potentially the person's employer if
the transaction is business-related,
comments Kevin Mahaffey, CTO at
Lookout Mobile Security, which works
with the likes of T-Mobile, Verizon and
Sprint.
Mahaffey believes that operators have a
vested interest not only in making sure
their network is reliable and secure, but
also in ensuring that their users feel safe
using their mobile devices. There are
numerous potential security issues
affecting mobile devices, he notes from
theft to spam to malware which can be
tackled with different approaches.
For lost or stolen devices, for example,
smartphone software is now available to
help users if their device goes missing
including the ability to locate it or remotely
erase the data. Operators are starting to
help people via customer service, or via a
retail outlet, to install missing device
software that can remotely find a device,
Mahaffey notes.
While text-based spam tends to be
considered more of a nuisance than a
security threat, it is being used increasingly
to spread mobile malware something
that operators are in the best position to
address, he says: Because all SMS
messages travel through the mobile
operator network, network-based
protections are preferable to on-device
anti-spam solutions, as they can protect a
broad base of users relatively easily.
Malware and spyware malicious
applications affect mobile devices just as
they do PCs. On smartphones, malware
writers can steal data, hijack phones to be
used as botnets or fraudulently charge
money to a user's phone bill, Mahaffey
explains. Mobile devices also have the
capability, like PCs, to perform denial-of-
service attacks against mobile networks if
a sufficient number of them in a given
region are infected, he adds.
There are multiple approaches to
eliminating malware: screening app stores,
scrubbing network traffic, and using on-
device agents. Yet Mahaffey says that,
while network-based solutions have the
advantage of being able to cover a broad
base of users, they can also complicate
operator back-ends because all data traffic
must flow through such systems: They
are also becoming less effective as many
users download applications over Wi-Fi
(outside of an operator network) or over
SSL (where the data is encrypted and
cannot be examined).
The responsibility isnt just in the lap of
the operator either, he adds. App store
providers almost universally want to
provide a safe experience for their users,
so many are building malware scanning
into their application ingestion process.
Because some malware is distributed via
web pages (not via app stores), it's also
important for devices to have client-side
anti-malware software to identify malware
wherever it comes from.
But what about plain old hacking? How
far should an operator be expected to go
to keep customers and their personal
information safe?
Phil Robinson, a director at independent
UK security consultancy Digital Assurance,
is sceptical about operators willingness to
go the extra mile unless there is
something tangible in it for them. He
argues that consumers themselves are too
Mobile security: must do better
AS USERS TAKE SENSITIVE DATA AND FINANCIAL TRANSACTIONS MOBILE, WHAT MORE
SHOULD OPERATORS BE DOING TO PROTECT THEIR CUSTOMERS, ASKS SUE TABBITT
lax about security, and that in the event of
a customers bank account being hacked
the blame is more likely to lie at one of the
end points (the bank, the application
developer or distributor, if not the end
user), than with the provider of the pipe
that joins them.
Its no different from if I was using a PC
and an ISP to access the Internet, he
says. Can I really hold the ISP responsible
if my online account has been hacked? I
doubt that would stand up in court.
Others believe operators wont get away
with shirking their responsibilities for much
longer.
Given the range of potential security
threats facing customers (which also
includes the vulnerabilities that creep in
as mobile services hand over to WiFi
connections), Gareth Machlachlan, COO
and co-founder of mobile security vendor
AdaptiveMobile, believes that the
traditional piecemeal approach to mobile
security is no longer sufficient. He argues
that it is time that mobile operators led
the way in mobile security by introducing
a comprehensive solution to mobile
security spanning both the handset and
network level.
Only the mobile operator has the
opportunity to ensure that all data crossing
the network is legitimate, and as such it is
they that have the opportunity to address
this growing issue, he says. They can
either rise to the occasion and be seen as
industry leaders in mobile security or wait
for others to lead the way and risk
jeopardising not only their customers
personal data but also their trust and
custom.
It isnt just data that can be intercepted
either. As has been highlighted by the
News of the World phone-hacking scandal
which continues to rumble on in the UK,
voice traffic continues to have its own
vulnerabilities.
This is both a mobile and fixed-line
issue, adds Peter Cox, CEO at UM Labs,
which specialises in VoIP and unified
messaging security. While mobile
networks have a specific set of problems,
and the problem of call interception is
particularly significant here, fixed-line
operators also have to face problems such
as call fraud - especially as business
customers move from traditional telecoms
services such as ISDN to VoIP. Members
of the UKs Internet Telephony Service
Providers Association (ITSPA) have
reported numerous examples of call fraud
on VoIP circuits, he notes.
The problem is not helped by the
telecoms operators, many of which
continue to claim that their fixed-line and
mobile networks are secure, despite
ample evidence to the contrary, he adds.
So what should operators be doing?
By far the most important measure
that operators should take is
communicating a realistic risk assessment
to their customers, Cox says, pointing to
business customers who generally accept
they have a role to play in ensuring their
own security. They should then ensure
that appropriate security measures are
implemented on their own networks and
strongly encourage any corporate
customers to do the same.
With very few exceptions, operators are
not implementing these measures, he
claims, adding that there are two reasons
for this. Firstly, even within the telecoms
industry, awareness of security is limited.
Secondly, security costs money. The
telecoms market is cost-sensitive, so there
is a reluctance to make the necessary
investment. This is short-sighted, because
the cost of effective security can easily be
justified when the potential losses are
considered.
Determining the appropriate solution is
best achieved via risk analysis, Cox
suggests. To address the problem of call
eavesdropping on mobile networks, there a
number of low-cost applications for
smartphones which provide effective call
encryption. To handle the problem of call
fraud and to address the more general
problems of security on [business] VoIP
trunk connections, a Session Border
Controller effectively a VoIP firewall can
be used. This is most effective when
installed at customer premises.
In due course, IP-related security
vulnerabilities will also come to the fore in
the mobile dimension, as operators move
to LTE architectures based on a flat, all-IP
core network.
Where operators are reticent about
pushing up their operating costs to provide
a service that customers still dont seem to
fully appreciate, an alternative is to see the
situation as an opportunity to add value.
While consumers may be unwilling to pay
extra for enhanced security, business
customers may well do. As indeed might
content providers, service organisations and
retailers keen to increase consumer
confidence in mobile transactions.
Trevor Hackett, an enterprise architect at
systems integrator 2e2, notes that O2
offers enterprise customers enhanced
mobile security solutions, which helps
differentiate it from its competitors. They
provide a walled garden for business
customers, he explains, noting that 2e2
uses the service to guard against sensitive
company data being lost with a mobile
device. If I was out, had too much to drink
and left my phone in a bar, the company
would be able to wipe the phone remotely.
The technology behind this is a mobile
device management (MDM) platform,
which can also be used to set central
access limits, controlling what users can
and cant do on their business handsets.
MDM facilities will become more
prevalent, Hackett predicts, noting that
the next challenge for companies will be
to extend similar controls to handsets
that have not been issued by the
company, as users increasingly use their
own technology for work purposes.
2e2, which partners with O2 to provide
combined IT and communications
solutions, notes that externally hosted
services can simplify the proposition for
telcos, making them a no-brainer.
Compared with self-managed on-premise
solutions, those delivered via a SaaS
model can be deployed more quickly and
cost-effectively, with no disruption to a
mobile operators existing ICT
infrastructure.
BACK OFFICE
The most
important measure
that operators should
take is communicating
a realistic risk
assessment to their
customers
ec
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E
very new year, the European
Communications inbox gets filled
with predictions for the year
ahead. January 2012 was no
different, with the usual suspects of cloud
definitely taking off and the cataclysmic
consequences of OTT service take-up
appearing on several lists.
One commentator is convinced this
year will be the year of mobile VoIP while
another assures us it will all be about the
rich communication suite.
Such predictions not impress Juniper
Networks Trevor Dearing. I cant sit back
as everyone ignores the key ingredient
that makes all these innovations work
the network, he said.
Dearing believes the challenge will be
the unknowns caused by the adoption
of any new technologies and business
processes, and how to plan for them.
We know that the volume of
information is greater and the speed at
which it is consumed is faster. What is
unknown is where the weak point will be
and how it will manifest itself, he added.
For its part, Huawei believes operators
need to speed up their transformation
towards an-all IP network and lead the
industry into an all packet phase to help
mitigate Dearings concerns.
The provision of on-demand services
will also improve network efficiency and
utilization while reducing network costs,
according to the China-based vendor.
Improving wait time should be another key
goal.
Despite the current fixation on
bandwidth, network speed will no longer
be measured by the bandwidth a service
needs, but determined instead by the wait
time experienced by users waiting for
networks to respond. Zero wait time for
users is the new paradigm, it said.
As an all-IP future looms, so does that
other favourite prediction LTE. With the
rate of LTE network commitments at an
all-time high, the total number of LTE
base station deployments will reach
almost one million by 2014, according to
Juniper Research.
Although take-up will be dominated by
enterprise subscribers at first, consumer
subscribers will begin to sign up in volume
during 2013 and begin to overtake
enterprise subscribers by 2015. However,
the consumer segment will account for
under half of all revenues, which should
reach 200 billion by 2016 according to
the research firm.
Over the next 18 months operators in
Europe will flesh out their LTE strategies,
adds Commscopes Phil Sorsky. Ensuring
that new technology can be integrated
across 2G, 3G and 4G is key.
As this trend evolves, heterogenous
networks will play an increasingly key role,
according to Sorsky. Operators will
introduce heterogeneous networks to help
provide ubiquitous high-bandwidth
connectivity, he explains.
The stakes are high to provide
consumers with a flawless 4G experience
and heterogenous networks will play an
integral role in next-generation deployment
strategies.
With Juniper Research predicting that
LTE service revenue will represent over 26
percent of total service revenues from all
mobile services across all generations
within the next four years, operators will
need to ensure they choose where they
invest their money wisely.
But then again, these are all just
predictions. ec
THE NEW YEAR HERALDS THE USUAL ARRAY OF PREDICTIONS BUT WILL THEY COME TRUE?
58 How do you solve a problem like rural broadband?
Finding an answer to the urban/rural digital divide
NETWORKS
Can we predict the
network of the future?
The stakes are
high to provide
consumers with a
flawless 4G
experience
NETWORKS
A
lthough mostly confined to
passive elements, network
sharing agreements are
proliferating, due largely to
accelerating pressures to cut costs
market will explode the coming years.
Despite all the noise about creating
knowledge based economies, reducing
global emissions and cutting national
and international travel, many
governments seem unwilling to invest
fully in the one thing capable of
delivering them fibre networks.
Especially fibre networks in underserved
areas where people live and increasingly
work. Instead operators are widely left to
fund fibre deployments and, somewhat
understandably, have concentrated on
low hanging fruit in major cities.
In many developed European
telecoms markets, the rural/urban
digital divide is growing despite
government pronouncements about
launching e-government initiatives,
stimulating rural economies to increase
jobs and relieve pressure off major
conurbations. Access to fast broadband
networks is as vital to the economic
health of rural areas as transport
infrastructure.
In rural areas the socio-economic
benefits of fibre are high, explains
Hartwig Tauber, director general, the
FTTH Council. Fast speeds and
upstream capacity are becoming more
important with on-line storage, the
cloud, video and applications requiring
symmetrical stable speeds -
challenging for all but fibre. Only a few
years ago the question was why fibre
now its when fibre.
New ways of working and
communicating have cut ties to city
offices changing market dynamics.
Demand for high-speeds is burgeoning
driven by frustrated teleworkers,
consumers, content providers, local
businesses and public sector
organisations. All want the same
facilities and access to corporate
applications that urban dwellers enjoy.
Sophisticated intelligent devices from
TVs to tablets are becoming ubiquitous
but the networks to which they connect
outside cities are hardly fast enough to
support their capabilities. Everyone
wants access to bandwidth hungry
multimedia applications everywhere.
Gabrielle Gauthey, senior VP, public
affairs, Alcatel-Lucent suggests there is
a better business case for fibre in rural
than urban areas: People queue to get
fibre and, where copper is not as good
as in cities, there are fewer competing
technologies. As an interim measure,
FTTN/C combined with VDSL is a good
first step to FTTH and a temporary
solution for less dense areas.
Most incumbents favour the FTTC/
VDSL model, which is faster and more
economical to deploy but connection
quality varies according to the length of
the local loop which differs considerably
by region and country.
So hungry are rural inhabitants for
broadband connectivity that the take-up
rate is rising and they appear willing to
pay the price. That price, so far mostly
paid by telcos, is in building FTTH/B/C.
However, significant capex, thin margins,
low take rates and delayed ROI have
made the business case for building
rural FTTH/B/C networks too challenging.
The ROI is not such a big problem
because the approach is different.
Networks are used by several service
providers in a utility model; the main
players are utilities or municipalities,
continues Tauber. Wanting faster roll out,
municipalities, local communities and
utility companies are building, paying for
and sometimes running fibre networks.
Competitive cablecos are delivering
symmetrical high-speeds and, together
with altnets, challenging incumbents.
Governments are starting to realise
that FTTH/B/C can stimulate local
economies and support rural
businesses thereby increasing the
number of jobs. Rolling out the efficient,
cost effective smart e-government
services including health, education and
culture they want depends on fibre.
Recognising they cannot leave it to
operators to meet the entire cost of
FTTH/B/C deployments, several
European governments recently
announced new funding either through
direct grants or Public Private
Partnerships (PPPs), which together with
JVs are popular.
Governments can stimulate demand
by increasing awareness, investing in
end user devices and increasing
confidence that revenues will be realised
in future. If governments have a stake in
PPPs they underwrite some market
risk, explains Matt Yardley, principal
analyst, Analysys-Mason. At the heart
of all models is how to handle high
market risk and demand uncertainty.
There is considerable activity throughout
Europe but very different and
fragmented policies. Ultimately the
solution is not to create numerous small
scale telcos.
Local and national European
governments are expected to make 50
billion available for rural broadband
projects. Telcos, utility and construction
companies, co-operatives and
municipalities can bid for funding from
the Connecting Europe Facility. Wanting
superfast rural broadband to support a
single market for digital public services,
How do you solve a problem
like rural broadband?
WITH THE URBAN/RURAL DIGITAL DIVIDE GROWING, PRISCILLA AWDE
ANALYSES THE ARGUMENTS TO SEE IF THERE IS A SOLUTION
e-government and promote local job
opportunities, the EU is making 9.2
billion available for broadband projects.
Although it may not go far when shared
between the 27 member countries, it is
expected to attract more investment: an
estimated 6-15 for every euro.
The ECs Digital Agenda wants all
households to have a minimum
30Mbps by 2020 and over 100Mbps
for half the population. The most
important first step is to connect public
sector buildings which costs less to
supply, yields higher returns, supports
local socio-economic benefits and
stimulates broadband demand,
believes Charlie Davies, principal
analyst, Ovum. There will be a mix of
public/private finance and communities
collaborating on civil access works.
There is still disagreement about the
best approach a big tender from one
regional supplier or smaller,
municipality/local community based
networks but everyone wants to avoid
differing standards and interoperability
problems, she continues. FTTH only
makes sense where there is one
infrastructure provider but throughout
Europe, local areas are funding fibre
deployments, creating a clash between
regional push for fast FTTH deployment
and parallel moves by operators building
networks and sharing infrastructure.
Most agree a single open access fibre
network, rather than a host of smaller
systems run by numerous players, is the
optimum solution. Fragmentation is a
significant problem, each country is
different and there is no common
vision, explains Gauthey. In most
countries incumbents still own
infrastructure. Some have taken a
radical approach, suggesting fibre
projects should be financed by many and
treated as a utility.
Fibre is happening but if it does not
accelerate plans, Western Europe may
find itself on the wrong side of the digital
divide globally and regionally as
developing telecoms markets leapfrog to
fibre. Walter Goldentis, CTO at Austrian
operator A1 cautions: The Digital
Agenda is a political statement with no
real incentive for operators to add fibre
but its important to push new
technology to keep Europe competitive.
Cablecos, offering superfast speeds,
already pose a competitive threat and
spur incumbents to accelerate rural fibre
deployments. Such is the case in
Holland where cable is ubiquitous;
French Numericable is influencing
operators fibre projects and Britains
Virginmedia has a similar effect.
German cablecos offer up to 120Mbps
faster than Deutsche Telekom, which is
buying fibre capacity from municipalities.
Altnets are similarly driving
competition while local governments and
utility companies are building very local
systems and laying ducts when streets
are opened. Some small communities
are paying to dig trenches others are
stringing fibre on poles for speedier, less
costly, deployment.
There are multiple layers of
competition, explains Mike Galvin, MD,
next generation access, Openreach.
Operators can enter the market via
LLU, wholesale, service provider level as
VNOs or at the service level. Although
cablecos are credible competitors and
more serious than in the past, they have
no wholesale arms.
National initiatives promote
deployments in France and Britain; Italy
has local fibre plans where, like France,
public investment banks help local
governments fund infrastructure. In
Spain, regulatory reform and
competition are expected to increase
fibre deployment and Scandinavia
deployed local fibre long ago.
The French government wants 10
million houses passed by FTTH/B by
2012 and four million subscribers but
fibre deployment and uptake is still slow
outside urban areas. Working with local
authorities Numericable offers fibre to
4.4 million houses and supplies
wholesale passive fibre. Operators FT-
Orange and SFR also provide wholesale
access and collaborate to deliver rural
broadband especially where their
networks are duplicated and underused.
Wanting 90 percent coverage by
2017, the British Governments BDUK
(Broadband Delivery UK), initiative
allocated 530 million for broadband
rural networks compared to a recent
announcement of 100 million for
superfast broadband in four major cities.
Eventually core WDM (Wavelength
Division Multiplexing), technology maybe
be adapted for access networks allowing
altnets to use different wavelengths
thereby speeding competition. Investing
2.5 billion in fibre build, incumbent BT
aims to reach two thirds of UK premises
by end 2015. It is exploring PPPs to
build regional FTTC using high-speed
copper for the final drop and may deploy
mobile/satellite or even TV white spaces
to reach the final 10 percent of houses.
There are numerous possible
scenarios suggests Galvin: Some
communities dig trenches for BT to lay
fibre; putting amplifiers on copper lines
increases speeds and new technologies,
like pole top DSLAMs in rural areas, allow
power feeds from houses cheaper than
active fibre. Disputes about the cost of
access to BTs pole/duct infrastructure
resulted in price cuts.
FTTH Council statistics highlight
traditional problems: take rates vary by
country with 62 percent in Norway,
dropping to 10 percent in France, fiver
percent in Switzerland and less than one
percent in Britain. Municipalities/utilities
accounted for 12 percent of houses
reached in June; altnets/MSOs passed
55 percent leaving incumbents supplying
33 percent.
The business case for rural fibre is
challenging regardless of who is
investing, says Matthew Hare, CEO of
Gigaclear. Governments can make the
environment more favourable, encourage
substantial investment and prime the
market to get initiatives rolling. The key
driver is competitor activity and
communities recognising fibre is
transformational within 20 years there
will be little copper left. ec
NETWORKS
The Digital
Agenda is a political
statement with no real
incentive for operators
to add fibre
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F
or all the understandable
excitement around the growth of
smartphones and the associated
surge in data, it is easy to forget
that they still lag behind another device in
our affections.
The TV, by sheer numbers alone,
remains the number one device when it
comes to the consumption of content.
Yes, the trend is changing as the personal
nature of phones means there will be
more of them eventually, but were not
there yet.
What is interesting to note, however, is
how the two are converging here and now.
Anyone who watches TV cannot fail to
have noticed the emergence of, for
example, a Twitter hashtag at the start of
programmes that range from news and
current affairs to reality shows and the
latest dramas.
This simple symbol highlights the
growing second screen trend in which
viewers increasingly use mobile devices to
discuss and comment on the show they
are watching on their traditional TV sets.
Jeff Heynen of Infonetics Research
defines the second screen market as
mobile devices, tablets and PCs whose
primary purpose is to enhance,
complement or even replace the
traditional TV set as the primary video
viewing platform.
People are becoming dissatisfied with
live TV, which they passively consume,
preferring instead the interactivity of tablets
and smartphones, adds Anthony Rose,
co-founder of Zeebox a social TV app.
Rose claims 30 percent of all tablet
usage is in front of TV and growth in this
space is driving his UK-based company to
be part of a revolution in TV viewing.
When connected to a smart TV, the
zeebox app lets you not only comment on
your show, it allows you to see what your
friends are watching, buy or download
relevant products such as books or songs
and helps you find out more about what
you're watching via links to, for example,
Wikipedia.
Rose is keen to work with network
operators and believes there is a big
opportunity for them to sell second screen
advertising. It will be a big disruption,
predicts Rose, and a great way for
operators to move customers from live TV
to their app store.
Heynen thinks this model is an option,
but believes operators are still trying to
figure out precisely what opportunities
exist.
Some are introducing companion apps
to complement the pay TV services they
currently provide. However, these are
typically offered for free, and dont do
anything more than help subscribers stick
with the service they already have, says
Heynen.
Others are making subscribers move to
a new service tier to receive the tablet
app.
Adds Heynen: I think the first thing
operators will do is to actually turn their
companion tablet apps into full-fledged
multiscreen devices so the tablet or
mobile device moves from being a remote
control or live streaming device to
becoming a digital video recorder (DVR).
In other words, operators can push
selected content to the tablet and a user
can pause, fast forward, or rewind the
streaming content.
Heynen believes 2012 will be a pivotal
year for the growing partnership and
collaboration between pay-TV and OTT
providers, including those offering
multiscreen services.
He says the two biggest challenges will
be monetizing multiscreen services and
determining how best to work with content
owners to deliver their content to multiple
screens per subscriber.
Asks Heynen: Does an operator start
paying for content per screen instead of
per subscriber? Will there be options for
mobile-only viewing if you do not want to
have a traditional pay TV service?
The coming 12-18 months should
provide some answers, but Heynen warns
that some innovative multiscreen services
could get shut down due to breaches of
existing regulatory frameworks. ec
HOW CAN OPERATORS PROFIT FROM THE GROWING SECOND SCREEN SPACE?
62 X marks the spot, but LBS will not provide a
treasure-trove Location-based services might not provide
operators with much revenue potential, but other benefits
do exist
CONTENT & SERVICES
First coming of the second screen
CONTENT & SERVICES
O
perators will look in vain for lo-
cation-based services (LBS) to
save them from the precipi-
tous decline in voice revenues
the money they are likely to make from
LBS may not cover their costs to deliver
the extra traffic.
Nizar Assanie, vice president of IE Mar-
ket Research, a firm that specialises in
the location-based sector, says he does-
nt think that mobile operators will be
"necessarily the major beneficiaries" of
the location enabled search and advertis-
ing market.
"The major benefit to operators will be
increased customer loyalty, and in-
creased ARPU through greater data con-
sumption by their LBS-enabled
subscribers. Off-network vendors, I think,
will likely be the major beneficiaries in
this space."
In short, that means Google.
Location-aware applications may be
reaching the plateau of maturity on the
Gartner hype cycle (see pic), but many of
the technologies needed to extend these
apps into full-blown services, near-field
communications in particular, are at or
close to the hype peak. This suggests
that commercial LBSs are two to 10
years away.
Market researchers show little agree-
ment about the value of the market for
LBSs. IE says the global market for GPS
navigation and location based mobile
services will rise to $15.2 billion by
2016, with $6 billion coming from Eu-
rope (see table).
Sweden's Berg Insight suggests the
European market for mobile location-
based services will grow from 205 mil-
lion in 2010 to 435 million in 2016.
This is perhaps one-tenth of what IE pre-
dicts, but they are not quite measuring
the same market.
Even if one accepts IE's estimate of a
$6 billion LBS market in Europe by 2016,
it's small beer when you calculate the in-
crease it brings to ARPU.
Let's take mobile advertising, which
some see as easy pickings for opera-
tors. Advertising agency ZenithOptimedia
reckons global ad spend for 2011 was
$464 billion, with $72 billion going on
online advertising. It says the internet
will drive most new ad spend dollars,
making online advertising ($113 billion)
second only to television ($216 billion)
in a market worth a total of $535 billion
by 2014.
That looks positive enough, but
ZenithOptimedia notes that Google has a
44 percent share of the online advertis-
ing market, and may do better.
ZenithOptimedia doesn't break out on-
line media or application. However, com-
panies such as Ericsson are abandoning
traditional media to enhance their online
presence. That means spending more on
PR, events and editorial such as com-
pany websites and YouTube videos,
which is Google's domain.
Spreading Berg Insight's generous
17 billion estimate over the 5.2 billion
3G mobile users counted by market re-
searcher Informa means an uplift in
ARPU of just over 3 a year, even if the
operators could claim it all, which they
can't. Averaging it over the mobile broad-
band user base of 822 million raises
ARPU to just under 21 a year, or less
than 2 a month.
This also assumes there is no
change in the relationship between net-
work operators, Google and other OTT
content providers such as LBS
providers, and that net neutrality still
rules. But if Cisco's prediction of a four-
fold increase to 966 exabytes of IP traf-
fic to be carried in 2015 proves true,
operators may have a strong case for a
change in their favour.
It is unclear whether that change will
be legislated or negotiated. With many
networks already congested or offering
incomplete coverage, operators may be
able to win financial concessions from
regulators and commercial partners, pro-
vided they are seen to use the money to
expand capacity and coverage.
Nevertheless, it is surprising that, with
the exception of GPS car-based satellite
navigation (satnav), the LBS market is so
underdeveloped. Almost exactly 10 years
ago, two IBM software engineers, Valerie
Bennett and Andrew Capella, identified
new revenue channels for operators,
such as tracking of both stationary and
mobile assets, search, and proximity-trig-
gered event delivery.
For mobile operators, knowing who is
where and when is the essence of terres-
trial mobile telephony, mainly so that
they can be billed appropriately. It should
have been natural for them to develop or
at least lead the development of LBSs.
Instead, with some 40 percent of
phones already shipping with GPS sup-
port, terrestrial telcos may find them-
selves either cut off from the LBS
revenue stream entirely, thanks to the
new Ka band satellites, or having to
share revenues with third parties.
Fixed operators may be somewhat
X marks the spot, but LBS will
not provide a treasure-trove
THE REVENUE POTENTIAL THAT LOCATION-BASED SERVICES COULD PROVIDE TO
OPERATORS DOES NOT EXCITE IAN GRANT, BUT OTHER BENEFITS DO EXIST
Telcos may find
themselves cut off
from the LBS revenue
stream entirely
comforted by Google's September an-

nouncement that it was using publicly
broadcast Wi-Fi data from wireless ac-
cess points to improve its location-based
services. Using signals from access
points needs less power than GPS,
Google said.
Operators' may enjoy the data traffic
that results, but it's hard to see them
sharing the revenue stream from LBSs
delivered through Wi-Fi because Google
will button that up.
So too will platforms like travel site Ex-
pedia, which has just launched an LBS-
based hotel booking service in the
Netherlands. The application, which runs
on iPad and Android tablets, allows trav-
ellers to find, select and book hotel
rooms safely. It uses GPS to show ho-
tels with instant availability within walking
distance of the tablet, together with a
map of the area. Results can rank by
price, rating, popularity or distance, and
TripAdvisor ratings for the hotels are also
available. The telco is merely the delivery
boy.
Many telcos are already forming rev-
enue-sharing partnerships with content
providers and content delivery platform
makers such as Telmap, the Israeli loca-
tion software house that Intel bought in
November. Among those using Telmap's
white label LBS products are Orange FT
Group, Vodafone, Vodacom, SFR, Telefon-
ica O2, MTS, SingTel and Optus.
But it was not until September last
year that it became possible (in Taiwan)
to order a taxi simply by holding a near-
field communications (NFC) enabled
phone (a Nokia, since you ask) close to
an NFC-enabled poster, and to receive an
SMS that confirms your order and pro-
vided a code to authenticate the driver
when he arrives. The scheme is now
rolling out nationwide with Taiwan Taxi,
Taiwan Mobile and 15,000 retail stores.
As IBM's Bennett and Capella noted,
LBS seemed a natural add-on to mobile
telephony. Even now, it is hard to find a
viable LBS business model for operators.
But the building blocks are in place.
Will telcos find a way to exploit the
combination of user demand and finan-
cial necessity to reach their place in the
sun? Perhaps there's an app for that.
CONTENT & SERVICES
ec
Late last year chip maker Intel bought the
fast-growing Israeli white label mapping
software firm Telmap for an undisclosed
sum. Telmap has 26 mobile network
operators using its location-based services
platform.
Ian Grant: Given the very positive figures in
Telmap's Q3 usage report, why did Telmap
sell to Intel?
Motti Kushnir: Location is a crucial
component of any mobile strategy. As such,
several giant players (eg, Google, Nokia,
MSFT) entered this field, with heavy
investments. Since their entrance into this
market, small players cannot really survive
without significant investment.
Most research points to prices declining,
but traffic volumes rising because of
services like LBS. Just how much can LBS
increase an operator's ARPU, and what
evidence do you have for that?
Motti Kushnir: LBS value is measured in
two currencies. The first is brand loyalty and
engagement and the second one is actual
revenue. Revenue from overall LBS can
generate around US$1 per user per month.
A reasonable assumption is that the
operator share is 30-50 percent of that
revenue. We are currently in the process of
moving from subscription model to a
freemium model that is based on commerce
for revenues (advertising, commission,
coupons and vouchers and premium
services). Currently, we already see an
attachment rate of 7-8% in premium
services and 6-7% conversion rate in
coupons and vouchers. As for advertising,
it's still in very initial stages, and too early to
determine a realistic range of CTR rates.
Ian Grant: The revenue sharing model in
LBS seems to be the norm, but is it
sustainable, and why? What about a fee-
per-transaction model?
Motti Kushnir: Yes, we believe the revenue
sharing model is sustainable over time. In
most fields, for many years, there is always
a distribution of revenues across the value
chain (eg between the distributor and the
content provider) and the LBS case is no
different.
Ian Grant: Who has the power in the
relationship between operator, LBS platform
supplier and content supplier, and do you
expect this to change over the next 12-24
months? If so, why?
Motti Kushnir: The content provider is the
centre of the offering. The operators (the
distribution channel) need to constantly
prove that they are a better distribution
channel than up-and-coming alternative
distribution channels such as app stores.
Ian Grant: To what extent are LBS
becoming must-have parts of an operator's
portfolio? Which services are essential for
competitive reasons now, and which do you
expect to become important over the next
12-24 months?
Motti Kushnir: Location in general and LBS
specifically are must-have layers in any
mobile strategy. It's what differentiates
regular online experience from a mobile
one. Mapping, navigation, finding and
exploring things around you, are all must-
have services today. Moving forward,
location-based services that are ultra-local,
social and contextual will become must-
have as well.
Ian Grant: Most of the LBS action appears
to be centered on mobile operators. Is
there a role for fixed wire operators, and if
so, what is it and how should they
approach it?
Motti Kushnir: As things are structured
today, we don't see a significant role for
fixed operators, because of the mobility
aspect of LBS, which is not supported by
them. If the operator is a triple player, then
it does have a role, as LBS can enrich the
user experience by bridging the online
experience with the mobile one.
Q&A with Telmap CMO Motti Kushnir
BACK PAGE
Deutsche Telekom and rival AT&T abandoned the proposed sale of the Germany-based operators US mobile arm in December.
The decision to torpedo the 27 billion deal, which was first announced in March 2011, followed months of problems, particularly
over antitrust issues. DT got one of the highest payments ever agreed between two companies for the termination of a purchase
agreement, including 2.3 billion in cash. T-Mobile USA received a large package of AWS mobile spectrum. The question is, what
will DT do with the US company now?
Sun sets on T-Mobile USA sale
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