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SPECIAL ISSUE Customer Experience

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

Q1 2012 ISSUE | OPERATOR STRATEGY | BACK OFFICE | NETWORKS | CONTENT & SERVICES

Contents

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 report 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 survey 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 January event

Back Office

53 2012: the back office moves forward This year should see operators’ back office 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 12 Cover Story: Clive Selley 61 First coming of the second screen How BT Group CIO Clive Selley tells Marc Smith can operators profit from this growing second screen? how the company is tackling the tricky issue 62 X marks the spot, but LBS will not of customer experience provide a treasure-trove Location-based services may not boost operator revenues Back Page

64 Sun sets on T-Mobile USA sale Customer experience: it’s time to act Editor Marc Smith Welcome to our special “customer experience” issue. There are many topics fighting for [email protected] prominence at the top of senior managers’ agendas currently; customer experience is just one, T: +44 (0) 207 933 8979 Twitter: @eurocomms 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. Back office section editor: Worryingly, as we report in our exclusive readership survey, this does not appear to be Sue Tabbitt [email protected] 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 Networks section editor: leading it at all. Priscilla Awde [email protected] 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. Content & Services section editor: Either way the result could be catastrophic. Now is the time to act and if you haven’t woken Ian Grant [email protected] 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. Publisher Fortunately, help is at hand from some of the biggest and best. Clive Selley is group CIO of Justyn Gidley [email protected] BT and nails his colours firmly to the mast this issue’s feature interview. “The customer +44 (0) 207 933 8979 experience is a basic building block of what we do,” he told us. Of course, it’s not an exact science and there are many different ways to approach it. Publishing Director Chris Cooke 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.” Senior Circulation & Marketing To help you along the path to providing a better experience to your customers we have Manager Louise Nicholls looked at the subject from a number of different angles: what do customers want, how [email protected] 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 Design Alex Goldwater there, the time to act is now. Subscriptions/Circulation BlackBerry diaries: part II Saint John Patrick Publishers Ltd PO Box 6009 As I started my first issue last time out by outlining how my new BlackBerry smartphone was Thatcham changing my habits, I thought it could be an interesting experiment to diarise how this is Berkshire RG19 4TT continuing – particularly as I got some things very wrong! United Kingdom

I wrote how monetizing data wouldn’t be easy unless I was made to pay more explicitly for T: +44 (0) 1635 879361 data. However, sending picture messages is one way they have made money from me in the F: +44 (0) 1635 868594 first couple of months. E: [email protected] W: eurocomms.com 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 © St John Patrick Publishers Ltd (ISSN 1367 9996) All Rights Reserved. WhatsApp about revenue sharing. Perhaps this is something new RiM president and CEO No portion of this magazine may be Thorsten Heins could look into. reproduced without written consent. The opinions expressed are not necessarily those of the publisher, who accepts no liability of any nature arising out of or in connection with the contents of this magazine.

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02 | european communications | eurocomms.com

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 prices payable by users is a matter of action on roaming charges The difference concern,” said Niebler. The European Commission is coming This followed centre-right Polish Civic under pressure to toughen its action between domestic and Forum MEP Roza Thun staging a against high mobile roaming charges, as hearing on the issue in Brussels, its latest proposals are debated at the international rates where she said the difference between European Parliament. remained “huge” domestic and international rates MEPs want the Commission to go remained “huge”. At a parliamentary further in its action to foist more “ debate, she added: “The rise of the competition on the roaming market while services separately, so they can choose smartphone and our increasing capping bills. Proposals being drafted by a different supplier for international calls reliance on laptops and tablets, plus the parliament’s coordinator (rapporteur) from July 2014. She also has plans for cloud-based software applications that on the subject, the German Christian tighter caps on retail and wholesale” need an internet connection, means Democrat Angelika Niebler, have roaming prices from this July (2012). many of us still find ourselves suggested requiring telcos to offer clients “The situation is disappointing. The high hostages to high wifi and roaming domestic and international roaming level of voice, SMS and data roaming charges.”

04 | european communications | eurocomms.com OPERATOR STRATEGY

Data protection rules set for overhaul Online business requires shake up information and communication The European Commission has proposed A new European Commission e- technologies projects. Of this, €1.7 a comprehensive reform of the EU's commerce policy paper has said that billion for photonics and micro-and 1995 data protection rules, aiming to despite all the efforts of governments nanoelectronics; €4.29 billion for strengthen online privacy and boost and the EU to foster growth in online nanotechnologies, advanced materials Europe's digital economy. The aim is to business, this key economic sector is and advanced manufacturing and simplify EU laws in the area, while still being hampered by serious long- processing studies; €575 million for strengthening privacy regulators. Instead standing problems. These include biotechnology; and €1.73 billion for of burdensome registrations, companies shortages in legal cross-border online space-related projects. would have a duty to quickly inform data business supplies; inadequate commissioners of serious breaches of information about international Metelem gets backing for acquisition privacy, ideally within one day. And if they ecommerce; weak consumer protection; The European Bank for Reconstruction failed to protect personal data, inefficient deliveries and payments; & Development (EBRD) has been commissioners could fine them heavily – illegal content and cybercrime. Brussels planning to back Cyprus-incorporated levying penalties of up to €1 million or argues by tackling these issues, e- Metelem Holding Company Limited in its up to two percent of the global annual commerce and online services could bid to acquire Polkomtel, one of turnover of a company. The proposals generate up to 20 percent of EU Poland’s top three mobile telephone would give consumers and businesses additional employment and growth over companies, which is being privatised. easier access to their own digital data the next five years. The EBRD had planned to invest €200 and ensure they could transfer personal million in equity into the company, data from one service provider to another Radio spectrum reform gets go ahead because it saw “strong merit in the more easily. “This will improve The EU Council of Ministers has backed strategy of the buyer,” said a bank competition among services,” said a European Commission proposals to memorandum. Commission note. reform the use of the radio spectrum in Separately, a legal case brought by the Europe so that wireless electronic Legal threat to Greece European Commission against the British communication broadband services The European Commission has government has been closed after secure sufficient bandwidth to succour threatened Greece with legal action, Brussels ruled reforms had brought the their growth. This would be achieved potentially at the European Court of UK in line with privacy and data through the identification by 2015 of at Justice, claiming it has failed to comply protection regarding confidentiality of least 1200 MHz of spectrum available with EU telecommunications email or Internet browsing. The legal for re-allocation by 2015. The aim, said a liberalisation laws by not helping telcos action had been launched in 2009 over council communique, was “fostering install facilities such as ducts, investigative techniques used by the UK access to broadband at a speed of not manholes, masts or antennae. The EU Information Commissioner’s Office and less than 30 Mbps by 2020 for all EU has detailed legislation on member British police, who were accused of citizens.” The European Parliament states’ duties regarding this work, and breaking EU law by when intercepting should vote on the plans by the end of these guarantees are not in place in electronic communications during February. Greece. “This failure has hampered the inquiries. Facing a case at the European development of broadband internet,” Court of Justice, the UK amended its Telco R&D given funding boost said the Commission, pointing out national laws to ban such action without A major pot of money will be available Greece’s fixed broadband take-up was a consumer’s explicit consent. London for R&D-oriented telecommunications just 19.9 percent of the population also established an additional companies via the EU from 2014 to compared to 26.6 percent across the supervisory mechanism, backed with 2020, because of its planned Horizon EU; 2.6 percent for mobile broadband penalties, to deal with breaches of 2020 research programme. Funding take-up compared to the EU’s 7.2 confidentiality in electronic cross-border collaborative projects, percent; and 41.2 percent of Greek communications administered by an under the proposals from the households have a broadband Interception of Communications European Commission, there would be subscription compared to 60.8 percent Commissioner (ICC). €8.97 billion earmarked for across the EU. ec

eurocomms.com | european communications | 05 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 country’s fourth major mobile operator and is the latest subsidiary of the group founded by entrepreneur Xavier Niel in 1991. Free Mobile’s low-cost model – which starts at just €2 a month – aims to disrupt the French mobile market in the same way that’s 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. Free will certainly on churn as customers switch to Iliad, as “Many existing Freebox customers will well as a long-term decrease in pricing be seriously contemplating a switch to its grab a lot of subscribers levels.” new headline-grabbing mobile launch Nevertheless, Sale said the move was tariff,” commented Ovum’s Charlie initially not risk free: “It is gambling on a flat-rate Davies. tariff structure that it believes to be more Free Mobile is not offering phones as license from France’s regulator ARCEP, in tune with the consumers’ perceptions part of their tariffs, but a range is “which audited its network two months of value.” available to buy on their website. It was later to confirm that it exceeded the Interestingly, he also pointed to the offering, for example, the iPhone 4S for minimum 25 percent population coverage impact that Freebox’s WiFi-enabled set- € ” just 1 for those customers who sign up needed to offer the service commercially. top devices could have. for a 36 month contract. “Unlike many new mobile entrants, Free “In the past few years, Iliad has Iliad CEO Maxime Lombardini said Mobile already has a significant installed established a large footprint for mobile giving Free customers access to the base and considerable brand cachet,” data – a free Wi-Fi cloud in the urban iPhone “is certain to shake up the said Analysys Mason’s Stephen Sale. centres of France. This illustrates the French mobile market." At the end of Q3 2011, it had nearly view that mobile data consumption relies Iliad first acquired spectrum in January 4.8 million fixed broadband subscribers heavily on WLAN and will do so even 2010 and has since been building out a and a 22 percent market share. more in the future.” 3G network to over 5,000 sites. “The French market has not Concluded Davies: “Free will certainly Supplementary network coverage is experienced the reduction in mobile grab a lot of subscribers initially. Its provided by a national 2G and 3G pricing that has occurred in most challenge will be to maintain momentum roaming agreement with Orange. countries in recent years,” added Sale. and push beyond an initial single digit In September 2011 it acquired a 4G “There is sure to be a short-term impact market share." ec

06 | european communications | eurocomms.com introducing our new website

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MTS awarded wireless Sign up to receive our LTE licence The first licence to offer FREE DAILY wireless communication services in the LTE standard NEWSLETTER in Moscow and the local All the latest news, region has been given to views and features MTS. A deadline of delivered direct to your inbox every morning. December 29, 2013, has 'Good' year for telecoms industry been set for the company to launch the LTE network, A new report has hailed 2011 as a good year for the VISIT with its licence expiring www.eurocomms.com telecoms industry. Figures show that service provider three years later on today and register capex jumped by an estimated 12 percent. December 29, 2016. your details.

Nokia names new design vice-president @eurocomms Nokia has promoted Marko Ahtisaari to executive vice- eurocomms president of design, the firm Apple profits double in fourth quarter Vodafone disappoints as has announced. He will Apple enjoyed a stellar end to 2011 by selling 37 million latest results show room begin his new role from iPhones in the final three months of the year to achieve for improvement: February 1 and will report record results for the quarter. Sales of iPhones more than directly to Stephen Elop. http://bit.ly/zcdk92 doubled in the 14 weeks to December 31. eurocomms Most read story this week: EXCLUSIVE FEATURES Videos from our Customer Experience event featuring

Video: Understanding Openreach, Amdocs, Customer Experience event Alcatel-Lucent & more Exclusive videos from http://bit.ly/xkqVC3 European Communications' recent customer experience eurocomms seminar are now available Indian Supreme Court has Tele2 hits the right notes to view. Attendees at the What could changes to EU cancelled 122 2G licences after decent 2011 Understanding Customer data protection rules mean Sweden-based operator Experience event in for telcos? - effective in 4 months Tele2 said its top priority London on 18 January The EC put forward some time. What impact do you was to offer customers less saw four presentations comprehensive reform to think this will have on EU for more in 2012 as it featuring operator data protection laws on operators? announced revenue and Openreach, market Wednesday that could have profit increases for the research firm Kantar profound implications for eurocomms previous quarter. Sales Worldpanel and telcos. The EC is between October and management consultancies recommending a wide Latest BT results deliver December 2011 rose 8%. Accenture and Infosys. range of proposals. profits on falling sales: http://bit.ly/x8jXnU

eurocomms.com | european communications | 07 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 of what would happen, but more critical systems failure and cyber attack They need to qualitative representations of what the in the technology field as key risks to world’s great and good view to be global prosperity. understand the risks to important discussions around risk. The WEF’s seventh annual Global their customers better Ultimately, they concluded a healthy Risks report, which surveyed nearly 500 digital space was needed “to ensure world leaders from business, government and, overall, look at risk stability in the world economy and and academia, divides risk in five balance of power”. categories: economic, environmental, “in a more holistic The question now is what telcos geopolitical, societal and technological. should do with this information. Critical systems failure, defined in the fashion According to Wilson, telcos need to do report as causing a breakdown in global more to mitigate these risks. “Telcos are information infrastructure and networks, Communications that greater awareness becoming more aware of the risks, but was singled out because, should it allied to the increasing speed of they are not doing enough about them at happen, it was seen as having the most technology developments has led to a the current time,” he said. significant impact of all the technological technological” risk rising up the rankings. “They need to understand the risks to risks. In addition, the vulnerability of the their customers better and, overall, look The threat of cyber attack – state supply of vital mineral resources and at risk in a more holistic fashion,” he sponsored/affiliated, criminal or terrorist data fraud and theft were highlighted as added. in nature – was highlighted as one of the key risks from a technology point of view, As in many industries, the day-to-day five risks most likely to happen over the which the report grouped together under challenges and complexities of running a next 10 years. the ominous title of “The Dark Side of telco mean some risks that do not It is the first time since 2007 that a Connectivity”. immediately impact the business do not technological risk has made it into the The report found that the increasing come top of the corporate agenda. top five. Cyber attack shared the limelight number of mobile devices, internet As Wilson noted, the communications with scenarios such as severe income connectivity and proliferation of the cloud space has particular challenges due to disparity, chronic fiscal imbalances and were creating a fear that crime, terrorism the pace of change the industry has to rising greenhouse gas emissions. and war could migrate from the physical work with. Steve Wilson, chief risk officer at to the virtual world. What’s more, there is a reasonable General Insurance who presented the The authors of the report were keen to argument to suggest that some of the technology risk findings, told European point out that these were not predictions 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

08 | european communications | eurocomms.com

OPERATOR STRATEGY

Worldwide telco Portugal Telecom plummets Portugal Telecom was the biggest faller in our index of leading European operators during Q4. stocks on the up Its stock fell 23.6 percent between October and SHARE PRICES AT TELCOS ACROSS THE GLOBE FINISHED IN THE December 2011, which followed a decline of BLACK IN Q4, REVERSING FALLS IN THE PREVIOUS QUARTER 19.8 percent in Q3. Although the incumbent had not reported its Q4 financial figures before European US outguns Asia-Pac as both see gains Communications went to press, you do not have to look far for the root cause of its problems. American telco stocks rallied after a the region as a whole. It’s stock In December, Moody’s downgraded PT’s poor Q3. The six percent rise in Q4 remained flat over the quarter despite long-term credit rating commenting: “Although followed a 12 percent drop in the making a splash in December when it PT will sustain strong market positions, as a previous quarter. However, it was announced the launch of Singapore’s result of the transformation of the business still only half as good as the rally in first commercial LTE service. model, and has been showing recently some the Dow Jones Industrial Average, Although offering limited coverage improvements in its underlying operating which rose 12 percent between using a USB dongle at launch, the performance, it does not have the October and December. company said it expected to be able to unquestionable domestic strength or the Market leader AT&T did not suffer provide LTE to 80 percent of mobile geographic diversity to distance itself from the from its failed acquisition of T-Mobile data users by the end of 2012. current and future credit environment”. USA from Germany’s Deutsche “We are ushering in a new era of The following month, Standard & Poor’s Telekom in December. Its share price mobile services,” said Yuen Kuan downgraded the credit rating of Portugal and rose 7.6 percent in Q4, boosted by a Moon, SingTel EVP. seven other European countries. Alongside best-ever quarter in smartphone sales Korea-based operator KT also took a Cyprus, Portugal’s rating was cut to a "junk" and a 19.4 percent rise in wireless lead in the future stakes. Although the rating, indicating a very high level of risk for data revenues. stock fell 0.5 percent in Q4, it lenders. Soon after, it announced it too was Main rival Verizon also rose, by 10 launched a range of forward-looking downgrading PT’s long-term rating. percent, but could not match AT&T’s products throughout Q4, including a Throughout all this, PT’s management has performance. Sprint Nextel was again Smart Home Pad designed for the remained silent. the biggest faller. Following a decline of senior generation to manage services This is a shame as the company has 44 percent in Q3, the year ended with such as video calling, on demand TV actually been quite innovative. As Moody’s a quarterly fall of 23.3 percent. and connected home security features. itself noted, PT has invested heavily in future After falling 2.8 percent in Q3, telco “KT plans to ultimately open a full- proof technologies and its management has a stocks in Asia-Pac registered a less blown Smart Home Era by changing strong determination to execute its than one percent rise of 0.4 percent in all wired telephones at home into transformation strategy. the final quarter. Smart Home Pads,” commented Seo Its YMN brand, the country’s largest mobile SingTel, the Singapore-based Yu-yeol, president of KT’s home phone operator, was revealed to be Portugal’s operator, mirrored the performance of business group. most followed brand on Facebook, while meo, PT’s triple-play service, was voted Best National Brand. The US The problem is that, while it is perceived well at home amid growing austerity, it is 6% suffering from being too reliant there. As The US telecoms sector grew six percent Portugal’s consumers cut back as the in Q4 according to data from the Dow economy falters, the operator’s international Jones US Index portfolio does not inspire confidence. Operations in Angola, Cape Verde and São Tomé and Príncipe are unlikely to send the Asia-Pac share price rocketing. The honourable exception is Brazil, where PT 0.4% The Asia-Pacific telecoms sector grew 0.4 owns a variety of stakes in mobile, ISP and call percent in Q4 according to data supplied by centre companies. It looks like much of PT’s the FTSE Group fortunes could rest on growth there.

10 | european communications | eurocomms.com COVER STORY

ustomer experience is a a whole. BT Group has four distinct fickle beast, hard to pin We track the real customer-facing business units: down at the best of times experience of our Retail, Global Services, Wholesale Cbut particularly so in and Openreach, which is responsible Leviathan-like operators whose global customers from start for the last mile of the UK’s access tentacles are matched in reach only network and for the roll out of by the complexity of the groaning to finish, removing superfast broadband. legacy systems that underpin them. “ The CIO rates the overall customer Add in the demands of ever-more duplication and experience that BT provides as powerful marketing departments, inefficiency to drive “good” but with room for competition from Silicon Valley’s improvement. finest and a macroeconomic climate down service There are two clear goals that the that is forcing countries, let alone company has at the current time. For well-established retail brands, to the provision time retail customers, Selley says rolling wall and you can see why telcos are out superfast broadband is “very finding it tough to focus on customer current group CIO, he is also CEO of important” to improving the customer experience and unearth a magic BT Innovate and Design – the division experience. formula. charged with long-term technology Providing a toolset to make better And what of customers strategy and research. ” use of bandwidth between end users themselves? Certainly they are Solving problems, you could say, is and data centres, meanwhile, is the becoming ever more demanding – his raison d’etre. number one priority for enterprise something telcos are all too aware of. “The customer experience is a customers. As we report on page 22, matching basic building block of what we do,” BT has committed ⇔3 billion to roll consumer expectations is viewed as Selley reveals during an exclusive out superfast broadband to two thirds the biggest customer experience interview at BT’s central London HQ. of the UK by 2014. Selley says the challenge facing the industry at the “We forensically measure whole company is focused on current time. performance, the improvements we delivering the infrastructure, but it’s The problem is that customers make and therefore the investment not just about laying high-tech fibre don’t view telcos as standard bearers case behind all that we do.” optic cables. of great customer experience. He reels off a number of key KPIs “Some of the innovations are what The UK’s Institute of Customer the company focuses on: getting you might consider low-tech – simple Service, for example, tracks 13 commitments they have made to engineering that nevertheless delivers sectors in its regular index. The latest customers “right first time” (see box on improving the customer ranking, for July 2011, scored the out); ensuring the absolute number of experience,” he notes. telecommunications sector fourth faults is falling – which he classifies Citing examples such as a polymer- from bottom, well below the average. as “customer incident reduction”; and based plinth for cabinets to replace So far, so not so good. shortening the various cycle times the their concrete predecessors that It is often said that when faced with company manages with the aim of suffered in bad weather and a “clever a challenge it is best to go back to providing “instant gratification” to spade” invented by BT engineers that basics and concentrate on what you customers. cuts through concrete more quickly to are good at. Despite undergoing “If you understand where you are speed up fibre deployments, these something of a transformation and failing you can translate that into are exactly the type of innovations flirting with trying to be cool, at heart using better tools and equipment, and that telcos have traditionally been telcos remain bastions of that noble ultimately providing a better service,” good at. scientific pursuit – engineering. adds Selley. But do they resonate with the And there’s nothing an engineer This is an ongoing, never ending customer? They are certainly a long likes more than problem solving. It is battle. UK regulator Ofcom publishes way from headline-grabbing for this reason, it’s fair to assume, quarterly data that reveals who is the innovations such as voice recognition that BT Group CIO Clive Selley told most complained about telco. Its software or augmented reality being European Communications that the most recent data, from July- trumpeted by some of the sector’s ⇔25 billion company has decided to September 2011, showed that BT newer and more innovative turn customer experience into a was perceived as the second worst companies. science. performer in landline and fixed Rightly, Selley argues that the Selley has spent over 25 years at broadband services. customer might not care about a the UK-based operator working in a Given the breadth of his job, Selley spade, but will certainly notice if their variety of roles. As well as being the has a unique view of the company as broadband service improves.

eurocomms.com | european communications | 13 COVER STORY

eurocomms.com | european communications | 13 OPERATOR STRATEGY

EU Telco stocks October-December 2011 900

800

700

600 October November December Europe rebounds after two negative quarters

Some relief at last for European Key to the increase in profitability telcos. After two consecutive quarters was an overall three percent reduction Europe of falling share prices, telcos in Europe in the company’s cost base, including saw stocks rise by 3.3 percent reduced labour costs. Payments to between October and December 2011. operators due lower mobile termination 3.3% The rise was registered amid a rates and lower transit and wholesale macroeconomic climate that continues call volumes also fell. The telecoms sector in Europe grew to be extremely difficult as countries “We have delivered another quarter 3.3 percent in Q4 according to FTSE battle to avoid recession, save the euro of growth in profits and cash flow Group data* and implement austerity programmes. despite the economic headwinds,” For the first time since European commented CEO Ian Livingston. Communications began tracking Vodafone’s Q4 results were not However, whether or not those European telco stocks in Q2 2011, released before this issue went to operators who continue to suffer with more companies recorded quarter-on- press, but commentators were poor performance agree with this is a quarter rises than falls. expecting a good performance. In a matter of conjecture. For the second time in the last November interview with European As in Q3, Portugal Telecom was the three quarters BT was the best Communications, Vodafone Europe biggest faller by far – it’s stock fell performer rising nine percent. CEO Michel Combes said the 23.6 percent over the quarter (see box Vodafone (up 7.1 percent) headed a operator was concentrating on out for more). list of seven other operators that getting the best out of what it had Telefonica (down 7.8 percent), KPN recorded a positive performance. rather than looking to expand further (down 7.1 percent), Swisscom (down What appears to please the market into emerging markets. 4.2 percent) and France Telecom is that BT continues to deliver profits This “we hold what we have” (down 4.1 percent) all suffered falls. despite falling revenues. For the final strategy has been echoed by other * Our index is made up of the quarter of 2011, the UK-based operators, but Combes was keen to following EU telcos: Belgacom, BT Group, operator saw operating profit rise eight stress that the industry could not Deutsche Telekom, France Telecom, KPN, percent year-on-year to €950 million afford to be totally insular. Portugal Telecom, Swisscom, Tele2, despite sales declining five percent to “Collaboration within the industry is Telecom Italia, Telefonica, Telenor, €5.8 billion. needed more than ever,” he said. Teliasonera and Vodafone Group.

eurocomms.com | european communications | 11 COVER STORY

TURNING CUSTOMER EXPERIENCE INTO A SCIENCE BT GROUP CIO CLIVE SELLEY TELLS MARC SMITH HOW THE COMPANY IS TACKLING THE TRICKY ISSUE OF CUSTOMER EXPERIENCE

12 | european communications | eurocomms.com COVER STORY

ustomer experience is a a whole. BT Group has four distinct fickle beast, hard to pin We track the real customer-facing business units: down at the best of times experience of our Retail, Global Services, Wholesale but particularly so in and Openreach, which is responsible CLeviathan-like operators whose global for the last mile of the UK’s access customers from start tentacles are matched in reach only network and for the roll out of by the complexity of the groaning to finish, removing superfast broadband. legacy systems that underpin them. “duplication and The CIO rates the overall customer Add in the demands of ever-more experience that BT provides as powerful marketing departments, inefficiency to drive “good” but with room for competition from Silicon Valley’s improvement. finest and a macroeconomic climate down service There are two clear goals that the that is forcing countries, let alone company has at the current time. For well-established retail brands, to the provision time retail customers, Selley says rolling wall and you can see why telcos are out superfast broadband is “very finding it tough to focus on customer current group CIO, he is also CEO of important” to improving the customer experience and unearth a magic BT Innovate and Design – the division experience. formula. charged with long-term technology Providing a toolset to make better And what of customers strategy and research. ” use of bandwidth between end users themselves? Certainly they are Solving problems, you could say, is and data centres, meanwhile, is the becoming ever more demanding – his raison d’etre. number one priority for enterprise something telcos are all too aware of. “The customer experience is a customers. As we report on page XXX, matching basic building block of what we do,” BT has committed €3 billion to roll consumer expectations is viewed as Selley reveals during an exclusive out superfast broadband to two thirds the biggest customer experience interview at BT’s central London HQ. of the UK by 2014. Selley says the challenge facing the industry at the “We forensically measure whole company is focused on current time. performance, the improvements we delivering the infrastructure, but it’s The problem is that customers make and therefore the investment not just about laying high-tech fibre don’t view telcos as standard bearers case behind all that we do.” optic cables. of great customer experience. He reels off a number of key KPIs “Some of the innovations are what The UK’s Institute of Customer the company focuses on: getting you might consider low-tech – simple Service, for example, tracks 13 commitments they have made to engineering that nevertheless delivers sectors in its regular index. The latest customers “right first time” (see box on improving the customer ranking, for July 2011, scored the out); ensuring the absolute number of experience,” he notes. telecommunications sector fourth faults is falling – which he classifies Citing examples such as a polymer- from bottom, well below the average. as “customer incident reduction”; and based plinth for cabinets to replace So far, so not so good. shortening the various cycle times the their concrete predecessors that It is often said that when faced with company manages with the aim of suffered in bad weather and a “clever a challenge it is best to go back to providing “instant gratification” to spade” invented by BT engineers that basics and concentrate on what you customers. cuts through concrete more quickly to are good at. Despite undergoing “If you understand where you are speed up fibre deployments, these something of a transformation and failing you can translate that into are exactly the type of innovations flirting with trying to be cool, at heart using better tools and equipment, and that telcos have traditionally been telcos remain bastions of that noble ultimately providing a better service,” good at. scientific pursuit – engineering. adds Selley. But do they resonate with the And there’s nothing an engineer This is an ongoing, never ending customer? They are certainly a long likes more than problem solving. It is battle. UK regulator Ofcom publishes way from headline-grabbing for this reason, it’s fair to assume, quarterly data that reveals who is the innovations such as voice recognition that BT Group CIO Clive Selley told most complained about telco. Its software or augmented reality being European Communications that the most recent data, from July- trumpeted by some of the sector’s €25 billion company has decided to September 2011, showed that BT newer and more innovative turn customer experience into a was perceived as the second worst companies. science. performer in landline and fixed Rightly, Selley argues that the Selley has spent over 25 years at broadband services. customer might not care about a the UK-based operator working in a Given the breadth of his job, Selley spade, but will certainly notice if their variety of roles. As well as being the has a unique view of the company as broadband service improves.

eurocomms.com | european communications | 13 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 part of everyday life. To underline this point, if we return to the UK’s ICS index the three sectors that are viewed as giving worse customer satisfaction are transport, utilities and national public services – all providers of other basic services. To really cap it off, there is a certain inevitability to Selley’s answer to a question about which company’s customer experience has impressed him the most. It’s Apple, of course, the company whose logo is in danger of replacing the dictionary definition of great customer experience such is it becoming the stock-in-trade answer to world’s most admired brand. “It’s hardware turns up very quickly, it always works and it’s 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. “Start with assessing your immediate competitors, undertake customer satisfaction surveys, 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 certainly something I believe in and we just have to get used to it,” he says. An urgent requirement is improving back office 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 different aspects together. Selley says BT installed a new core database management system a few

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14 | european communications | eurocomms.com COVER STORY

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eurocomms.com | european communications | 15 COVER STORY

platform alongside a single portfolio enabling them to access a range of Getting it right first time database ensures a much more content including on-demand TV, HD consistent approach. video and VoIP services. In addition, the company has spent Selley says BT is committed to “Right first time” is BT’s key measure “a lot” of money on realtime decision cracking the problem of delivering fast for customer service, which measures capabilities so employees can broadband to rural communities. how often the operator gets things communicate with customers in a “The future presents several right for customers at the first time of much more effective way than before. challenges and the winners will be asking. As CIO Clive Selley points out, One such system, DebateScape, is those who deeply understand their this is important as failure increases a social-media search tool developed customers,” says Selley. its costs. by the Innovate and Design division So what is the biggest challenge? In 2011 BT achieved a three for BT Retail. It spots comments, According to the CIO it is keeping BT’s percent improvement in this measure, posts and tweets from a number of of own workforce of over 92,000 which compares with a 10.5 percent social media sources and presents employees up-to-date with all the improvement in 2010. BT said that the them to call centre advisers. latest developments. It is a particular scale was less than in previous years BT says social media enables them challenge for the firm’s enterprise due to a large increase in provision to be more proactive than ever before customers, who are large and varied. volumes that required engineer visits. in helping to resolve problems, “Our enterprise business is moving To meet these challenges BT thereby saving both time and money – recruited additional engineers and it estimates to have saved in the provision lead times improved to an region of €400,000 in equivalent Getting average of 10 days at the end of costs of manually searching for March 2011. customer service issues across customer experience Call handling times for consumer social media. right is an imperative sales improved by 19 seconds due to Perhaps just as importantly, these the introduction of Agent.com, a new new technologies also help BT to that you can’t ignore system that allows sales agents to predict what customers might find process orders faster and more attractive now and in the future. “or skimp on effectively. With the rollout of a According to Selley, part of BT’s desktop help system, broadband future involves moving from catering from being general purpose in nature consumer customers can now solve for households to catering for to focusing on delivering a highly many problems without the need to individuals. BT, of course, doesn’t specific service to individual industry call BT’s service centres. have a mobile business, so is used to sectors,” explains Selley.” dealing with selling and maintaining a As an example, he cites providing landline or broadband connection to cloud services to pharmaceutical coherent customer experience amid all an address. companies that help with navigating other pressures such as time, Understandably, this approach the highly regulated environment that technology and investment, not to simply doesn’t cut it anymore in a particular industry operates in. mention increased competition, is easy. world where consumers are “This is a big deal for our teams, But telcos have no choice and time connected to both their personal and from designers to account managers, is not on their side. If that’s the stick, work lives via cloud and IP technology who have to keep up-to-date,” at least the carrot is attractive – using both fixed and mobile devices continues Selley. winners will not only create happy interchangeably. BT invests heavily in both customers and, it is hoped, push One way BT is attempting to bridge classroom and online training that telcos up the most admired brand this gap is by partnering with mobile Selley says has to be multifaceted to lists, they will also make a difference joint venture Everything Everywhere to keep up with trends. How the to their own company’s bottom line. undertake the world’s first fixed/mobile company builds skill sets for “Poor customer experience costs LTE trial in Cornwall – the mainly rural emerging markets is a particular more – it is much more expensive to south-western corner of the UK. focus currently, following BT’s win a new customer than keep an old The ongoing trial has seen the two continued expansion into Asia-Pac one,” says Selley. “Getting customer companies provide wireless and Latin America. experience right is an imperative that broadband to 180 customers who “To serve customers well our you can’t ignore or skimp on.” previously had no broadband or workforce needs to be distributed In a battle in which only the fittest struggled to get speeds of 2 Mbps. around the globe,” says Selley. will survive, choosing to view Participants are now reaching an No one is pretending that pulling all customer experience as a science average download speed of 7 Mbps, these different strands together into a could be the best tactic. ec

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www.glotel.co.uk ADVERTORIAL

Capitalising on carrier cloud connections

he cloud computing revolution alike. Markets have become over further into the technology, service and has shaken up the information saturated to the point of bloating from management aspects of their business. technology industry in many both a voice and data perspective. So Cloud contracts necessitate proximity, directions. Although largely in order to grow, carriers will need to service, support and ongoing Tregarded as a “positively disruptive” look to new revenue channels from the operational management and NEC sees force, the shift towards services-based cloud as they now present their market it as a responsibility incumbent upon us delivery of both storage and processing propositions across a variety of vertical to ensure that these expectations can power is something that NEC has market streams. be met. As NEC now commits to carefully analysed and strategically As cloud services now underpin new helping carriers expand their value planned for over a number of years. and existing communications protocols, chains strategically and profitably, we As a company with an enviable consumer media will also become a key will also work to position the carrier pedigree in communications services, driver for cloud as tablet and business that we know and understand NEC’s leverage of the cloud model now smartphone devices draw heavily upon so well in order for these companies to puts us in a unique position to help online resources to give users the rich exemplify what it means to deliver cloud commercial enterprises, public bodies multimedia services they demand. In computing properly. and, perhaps most crucially of all, the line with these channels we will also We have a range of solutions telecoms carriers who will now take this witness M2M (machine to machine) designed to match the required quality computing paradigm forward. intercommunication increasing, and availability demands of the NEC advocates carriers as the new especially at the wireless level, and this application and SLA at this level. Many champions of cloud computing on the again will draw down power from the IT vendors claim to have extensive basis of these companies inherent cloud. Above, below and in the midst of experience in dealing with carriers, but suitability to delivering new services- all these newly empowered data in reality, most of those relationships driven computational power channels. streams we will still find business IT as have been created on the basis of With a business model perfectly a fourth defining force here. purely providing carriers with the architected to servicing large numbers The sum of these parts is not just cheapest offering for hardware. Our new of customer contracts, the “carrier the carrier cloud opportunity solutions and services have been cloud” will provide the real capability to encapsulated, it also conveys some constructed from the ground-up on scale business models and impact sense of how the cloud will change the cloud age business models. Also, we behaviour among businesses as new way the telecoms and IT markets will have invested in our regional carrier services are delivered to billions of now operate. As carriers work to supply cloud centres of competence (and our people around the world. these new data streams, they will need 283 subsidiaries) so that we can adapt Carriers will be at a distinct to foster a more intimate relationship the cloud concept to the carrier and advantage in terms of making these with their business partners and telco business as a means of reaching developments become a reality due to enterprise customers, penetrating all potential users around the globe. the strength of their networks, the As the use of cloud computing depth and reach of their bandwidth, services now proliferates and their quality of service and their end-to- Cloud computing permeates its way into user behaviour end security. Commercial maturity will at both the enterprise and consumer also be crucial at this time, and carriers is all about the level one universal truth emerges: we have both maturity and stability when it witness an escalation of data. As data comes to customer support, customer provision of new more now spirals exponentially in both trust and operational processes. efficient infrastructures structured and unstructured formats, For carriers themselves this is a NEC realises that we will need to be logical step towards new value chains “at a virtualised level able to quantify, classify and clarify the in developing and developed economies source and content of the data that we 18 | european communications | eurocomms.com ” ADVERTORIAL

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. Let’s 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 don’t. A Smart City has the carrier cloud proposition engineered into it from the start so that economies of scale can be brought to bear and wasteful emissions can be minimised. NEC’s concept of the cloud is a harmonious universe where users are empowered on any device in any form channel across the cloud and so pleasantness; NEC’s Smart City factor to whatever the level of processing and analysis techniques concept promotes the creation of bandwidth they need. NEC’s concept of come to the fore. NEC has invested sustainable living spaces where the the cloud embodies perfectly executed significantly in algorithms for correlation best options to provide the best quality levels of service, management and analysis. Our big data strategy will help of life are pursued, while reducing net maintenance to ensure that customers to identify new business models for pollution such as greenhouse gas of every shape and size get the data digital businesses as well as (GHG) emissions. they want, when they want it, in the stimulating demand for new services Cloud computing is all about the right contextual format with valuable underpinned by data. provision of new more efficient additional analysis when needed. NEC’s As the nature of cloud based data infrastructures at a virtualised level, so concept of the cloud is a computing now creates not just an information as NEC now dovetails developments in model flawlessly engineered to support society but also an information-heavy this arena with our work to promote the the growth of new Smart Cities, which society, NEC has described the concept creation of Smart Cities, this should be work better for everyone. of the Smart City. This is a place that is a very natural extension. After all, Come with us, connect with us, live able to leverage its use of big data to decisions taken today lock in the in our world. its own advantage and not become a futures of many cities and so we can source of environmental degradation or conservatively say that the www.nec.com an ecological burden of some kind. Built infrastructure of 2050 is being built around the precepts of safety & today, yet the world of 2050 will be very security, sustainability, efficiency and different from today – and so strategic perhaps the more emotive value of planning is essential.

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Fig. 1 (operator respondents only). Who would you say is leading CEM in your company? Fig. 3 (operators). Would you say you have a holistic 360-degree view of your customers? Fig. 5 (all). What do you regard Contents 41% as the biggest challenge Individual managers are No taking it upon themselves the industry faces

60% with regard to Matching customer’s customer expectations with 39% experience? the quality of the 33% services delivered 22 Survey

A dedicated CEM I don’t know manager 23% Results of our exclusive customer experience 12%

8% Yes No one is leading a 17% CEM effort The C-suite 16% survey Generating enough revenue to keep up with costs associated with providing a best-in-class customer experience Fig. 2 (operators). How would you say customer Generating enough revenue to keep up experience is treated within your organisation? Fig. 6 (all). How has the customer experience that the 16% with costs associated with providing a telecoms industry provided over the last five years changed best-in-class customer experience 32 Analyst v operator in your view? 10% Retaining customers in the face of 45% As an integral part of everything we competition from OTT players do across all business units 10% What do analysts and operators think should be 57% Improved Tracking and keeping up with changes in customer trends/behaviour

Making sure customer information is consistent, done to improve customer experience? 38% As integral to certain 8.5% parts of the company but accurate, and shared throughout operator business units not others 4% 29% Stayed the same Developing relevant technology 3% Hiring quality staff and keeping them trained 17% As a separate, distinct discipline 14% Worsened 40 Designing a strategic blueprint for customer experience Quarterly survey: good but not good enough Customer loyalty has never been operators' A European Communications survey finds lack of leadership and strong point but that is slowly starting to customer visibility are holding operators back from delivering excellent change customer experience 42 Closing the customer service loop Operators must incorporate social media platforms into their multi-channel customer service strategies

44 Blurring the retail and enterprise boundaries Should operators be rethinking the way in which they treat their customer segments?

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eurocomms.com | european communications | 21 SPECIAL REPORT: CUSTOMER EXPERIENCE

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

S president Barack Obama Communications, just 12 percent of C- and director Benoit Reillier. “Since once said that the leaders and suite executives are leading the customer experience is such an businesses we revere are, customer experience agenda at major important competitive lever, as well as generally speaking, the result operators (see Fig. 1). complex and cross-functional, it is Uof devotion to a “bigger purpose”. It is Worryingly, no one is leading a surprising that so few see this as a C- generally accepted that customer customer experience effort in eight suite responsibility,” they told European experience is one such bigger purpose percent of operators. In a majority of Communications. that telcos must focus on if they are to cases (41 percent) individual managers Dr Michael Opitz, director at succeed in a market where, are taking it upon themselves, while for management consultancy Arthur D. increasingly, they are competing against 39 percent of respondents, a dedicated Little, is in agreement. “Customer multinational brands from out side the customer experience manager has been experience must have the backing of telecoms sector. put in charge. the management board and be However, according to a new survey The stat set alarm bells ringing with implemented in the KPIs and incentive carried out by European KPMG strategy partner Milan Sallaba schemes, otherwise it will always be compromised,” he said. Fig. 1 (operator respondents only). Who would you say is A lack of coherent leadership naturally feeds down to a fragmented leading CEM in your company? implementation of strategy. Although a majority of operators (45 percent) said customer experience is treated as an 41% About the survey Individual managers are taking it upon themselves 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 39% parts: the first part was answered by all respondents, while the second was dedicated to operators only. A dedicated CEM Overall, 35.5 percent of respondents manager were operators, 30.5 percent were 12% vendors and 34 percent were third parties. 8% From a geographical perspective 68 No one is leading a percent of respondents came from CEM effort The C-suite Europe, 14 percent came from the Middle East and Africa, while 12 percent came from Asia-Pacific.

22 | european communications | eurocomms.com SPECIAL REPORT: CUSTOMER EXPERIENCE

“Operators clearly have some work to Fig. 2 (operators). How would you say customer do,” commented Sallaba and Reillier. “A experience is treated within your organisation? 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.” As an integral part of everything we 45% Before delving further into the do across all business units 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 38% As integral to certain parts of the company but questions were opened up to people not others who make up the rest of the telecoms ecosystem. One of the most fundamental questions was what should be included 17% As a separate, in a “telco” definition of customer distinct discipline 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) integral part of everything their As the survey finds out, this remains and the call centre (67 percent) (see organization does across all business a serious problem. Just 17 percent of Fig. 4). units, that means a majority does not operators say they have a 360-degree “It is surprising to see network (see Fig. 2). view of their customers. Sixty percent quality as the most important driver of Thirty eight percent said it is integral say they don’t, while a further 23 customer experience,” commented to some parts of the business but not percent say they don’t know (see Fig. 3). Sallaba and Reillier. “With network others, while 17 percent said it was treated as a separate distinct discipline. Fig. 3 (operators). Would you say you have a “A well established customer holistic 360-degree view of your customers? experience strategy should be treated as an integral part of the entire organization,” said Opitz. No Clearly, more work is needed, but according to Sallaba and Reillier, the 60% 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 I don’t know order to reach the latter objectives, 23% operators must first overcome one of their biggest problems: harnessing their 17% Yes various legacy systems to provide a complete picture of their customers and, therefore, enable a joined-up customer service.

eurocomms.com | european communications | 23 SPECIAL REPORT: CUSTOMER EXPERIENCE

sharing deals becoming increasingly common, operators will be forced to Fig. 4 (all respondents). Which of the following find sources of differentiation beyond aspects do you think should be included in a their infrastructure. When this happens, “telco” definition of customer experience? factors such as customer care and billing relationships will become increasingly important sources of differentiation.” 79% Network quality Operators need to recalibrate their century-long ties to the network – this doesn’t mean that it should be reduced Customer care and in importance, rather other factors need 77.5% billing care to be attributed equal importance. This is neatly illustrated by what the Call centre industry views as the biggest challenge 67% it faces with regard to customer experience: matching customers’ Content and services expectations with the quality of services 65% delivered. Exactly a third of respondents chose Website this answer, with generating enough 61% revenue to keep up with the costs Mobile user interface associated with delivering a best-in-class 59% and apps customer experience and quickly responding to market trends coming joint 58% Security second with 16 percent (see Fig. 5). According to Sallaba and Reillier, 57% Billing systems there continues to be a mismatch between customers’ expectation and 54% Loyalty programmes operators’ ability to deliver that can be boiled down to one key problem: “The 53% Quality of staff industry has had a tendency to overpromise,” they said. 50% Order handling and inquiry So if many are overpromising and under delivering, how well does the 47% Retail store industry think it is doing overall when it Devices comes to customer experience? On a 47% scale of 0-10 (where 10=best-in-class) Marketing campaigns respondents think the customer 45% experience being provided currently is 42% Social media above average with 48 percent giving Data quality and master data telcos a score of either six or seven. 41% management Only a small minority believes it is Business intelligence and analytics either very poor or best in class. 41% Arthur D. Little director Stuart Keeping says internal programmes are ongoing at most operators, but agrees they are not giving a great service: “The Also, as both KPMG and Arthur D that the industry has improved the reasons for this include a lack of Little note, respondents will increasingly customer experience over the last five alignment across the customer journey use the OTT providers as a benchmark years. However, a significant minority and services are not differentiated when thinking about how well the thinks it has stayed the same (29 enough to meet different customer industry is doing. percent) or actually worsened (14 expectations.” Respondents are also in agreement percent) (see Fig. 6).

24 | european communications | eurocomms.com SPECIAL REPORT: CUSTOMER EXPERIENCE

Interestingly, the wider telecoms Fig. 5 (all). What do you regard community is markedly more skeptical than the operators in answering this as the biggest challenge question. Seventy four percent of the industry faces operators think the industry has with regard to Matching improved compared to 57 percent customer customer’s overall. expectations with the quality of the “We support this opinion,” said Opitz. experience? 33% services delivered “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 16% undifferentiated way to treat customers Generating enough revenue to keep that does not meet their expectations up with costs associated with providing a best-in-class customer experience of a good user experience. Wider factors such as regulation 16% Generating enough revenue to keep up naturally come into play with the with costs associated with providing a best-in-class customer experience throttling argument, but Sallaba and 10% Reillier nevertheless warn that some Retaining customers in the face of operators may have a “distorted competition from OTT players perception” of the quality of service 10% Tracking and keeping up with changes they provide. in customer trends/behaviour If that is the case, a majority of Making sure customer information is consistent, operators showed restraint when 8.5% accurate, and shared throughout operator business units scoring their own companies out of 10 4% for the quality of customer experience Developing relevant technology 3% they currently provide. Hiring quality staff and keeping them trained Fifty five percent gave themselves a

Fig. 6 (all). How has the customer experience that the score of six or seven (again 10=best-in- class). Fourteen percent gave a score telecoms industry provided over the last five years changed between zero and three, while 15 in your view? percent selected a score of between eight and 10. Overall, therefore, operators are slightly more optimistic about the 57% Improved 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 29% Stayed the same issues as the biggest source of poor customer experience. Over 29 percent of respondents chose this answer, which came well 14% Worsened ahead of unavailability of desired service combination (14 percent). A self-service system that was limited/difficult to use and bill errors

eurocomms.com | european communications | 25 SPECIAL REPORT: CUSTOMER EXPERIENCE

came in joint third with 12 percent of understanding of customer behavior the vote (see Fig. 7). We may see was stopping them from delivering an “The fact that network congestion is ideal customer experience (see Fig. 9). the most cited source of poor the rise of the This finished ahead of an inability to customer experience is worrying,” said Customer Experience provide consistency in interactions Sallaba and Reillier. “This should be a (25.5 percent) and an inability to offer basic requirement for operators, not a Officer to the the products and services that key differentiator.” customers wanted (21.5 percent). However, Arthur D Little principal Dr “boardroom This certainly seems to back up the Bjorn Thunstrum saw it differently. “It findings with regard to having a 360- is interesting that network congestion degree view of the customer. was chosen as this is exactly the area Opitz said it was understandable Luckily for operators, Sallaba and in which operators are doing the least that responding to customer queries or Reillier suggest the answer does not – almost no operator has so far problems came top,” but suggested require thinking the unthinkable. “The implemented a quality of service this was a reactive lever that should smart deployment and application of ‘guarantee’ for retail customers.” act as a starting point, rather than an business intelligence will, over time, Operators are equally clear about end point. support better customer which lever they think is the most “The most important lever is the understanding,” they commented. important they can pull to provide an ability to deliver a personalized, Whether they realize it or not, excellent customer experience. branded end-to-end experience,” he customer experience has become a With 29 percent of the vote, added. key battleground for operators in their responding effectively to customer But even if operators know exactly search to keep and attract users, queries or problems finished well what customer experience they would boost revenues and compete against ahead of providing higher like to provide, other factors limit the new entrants to the telecoms market. personalization (19 percent) and execution of a coherent strategy. The message appears to be that competitive pricing (15 percent) (see When asked, a majority of operators they’re doing good, but not good Fig. 8). (37 percent) said a limited enough. As ever, time is not on their

Fig. 8 (operators). What do you regard as the most important 29% lever in providing best-in-class customer experience?

19% 15% 13.5% 10% 6% 4% 2% 2% channels and services customer loyalty Competitive pricing High quality network Marketing campaigns Responding effectively to Responding effectively customer queries/problems in Acknowledging and rewarding store, over the phone or online Providing new/innovative content offers, services, and customer care. offers, Providing higher personalization with Offering the latest devices/technology Offering Consistent purchasing experience across

26 | european communications | eurocomms.com SPECIAL REPORT: CUSTOMER EXPERIENCE

Fig. 7 (operators). What do you Operators may regard as the biggest source of 29% poor customer experience have a distorted among your customers? perception of the 14% quality of service they “provide 14%

12% agenda of most operators, it is important to realize that it is even Call center Network higher on the agenda of customers handlingcustomer of ” requests themselves. To this end, Opitz says customer congestion and other servicequality issues of Unavailability of experience should be viewed simply as desiredcombination service Self-service use 12% “delivering a consistent end-to-end system limited 10% or difficult to experience across all touchpoints that at least meets if not exceeds 4% 4% customer expectations.” Sallaba and Reillier suggest 2% operators look elsewhere for Bill errors inspiration. “Best-in-class customer experience is no longer defined by

Trouble resolution other operators but increasingly by OTT

Multiple interactionsOrder failures players who not only fare better but required to update are targeting growth markets that IVR system limited customer information or difficult to use interest operators.” ec side so developing a clear, integrated Fig. 9 (operators). strategy across their business is vital. Which of the following For Sallaba and Reillier, this has to factors limits your start at the top and in those ability to deliver an operators where customer experience ideal customer has yet to make an entrance into the 37% boardroom, it is just a question of experience time. the most? “We may even see this trend giving Limited understanding of customer behaviour rise to a new type of CEO in the boardroom – the Customer Experience Officer,” they predict. 25.5% For Opitz, however, an independent director who reports directly to the Inability to offer products CEO could be a better governance and services required by 21.5% customers model. “Only someone who is 16% independent can challenge all the in interactions touch point ‘owners’ without being compromised by his/her own Can’t provide consistency performance,” he said. One thing that should be rammed home is that while customer behaviour experience is undoubtedly high on the Limitedon informationcustomers and

eurocomms.com | european communications | 27 SPONSORED INTERVIEW: ALCATEL-LUCENT

Seeking differentiation means no one-size-fits-all approach to customer experience

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

28 | european communications | eurocomms.com SPONSORED INTERVIEW: ALCATEL-LUCENT

Personalising the customer care, is engineered and built to be management, said Geller, is helping experience has also become plugged into each of those popular consumers better self-manage the increasingly important, Geller added: contact channels.” quality of service within their homes. “If you give the consumer access to Alcatel-Lucent’s portfolio of “The idea behind this is you’ve got technologies across the contact customer experience technologies every family member bringing new channels that mean the most to has three basic solution suites, devices and services within the them in a format that’s easy for stemming from the Alcatel-Lucent home, all competing for that finite them to use, [the experience] will acquisition of the Motive portfolio. resource of bandwidthWith so many feel more personalised to them.” The company has expanded upon the new technologies being introduced Alcatel-Lucent offers this kind of original portfolio by combing that eat up bandwidth, consumers choice and despite the ongoing trend additional solutions and services have to re-prioritise the services so of services and operations from within Alcatel-Lucent to create bandwidth sensitive services get the increasingly shifting online, Geller the newly expanded Motive Customer highest bandwidth, said Geller. said it is not wise for companies to Experience Solutions. The first is CX Alcatel-Lucent is continuously put all their efforts into online management, mainly centred on researching and updating their device operations. “There are a variety of customer care and managing devices library to manage the wide variety of contact channels that consumers, and services. A big part of CX mobile devices that exist, such as based on their preferences, will tablets, smartphones, and e-readers. automatically gravitate towards,” he “These devices require special said, adding that he believes there management mechanisms to make will always be issues that crop up for It is not wise for sure they can be set up correctly, service provider customers that will companies to put all that they can be fixed when they require some level of customer agent break and be maintained and grow in assistance, rather than self-service. their efforts into online capabilities over time,” said Geller. “Our technology, in the context of operations Another big focus of the Alcatel- customer management and customer “ Lucent portfolio is CX analytics: ” eurocomms.com | european communications | 29 SPONSORED INTERVIEW: ALCATEL-LUCENT

able to reduce ‘first 30 day calls’ by important thing for companies to 75 percent. Another company has keep in mind overall in terms of QoE Customer taken Alcatel-Lucent’s self-help is that every company – just like technologies and turned them into every company’s consumers – need experience is now apps that people can download onto customer experience solutions becoming an executive their iPads, smartphones, etc., that tailored to them individually. enable users to self-manage their “Everybody wants to start someplace and board-level broadband, TV or voice services. In different – but what companies have “ the first nine months of this to recognise overall is that if you conversation application being rolled out, said really want to handle the customer Geller, the company was able to experience, you’ve got to put the avoid 600,000 calls in their call customer first, and manage “What we are seeing right now is not centre through self-service, which everything else centred around that,” only is the market space asking for meant a 30 percent decrease in their said Geller. powerful analytic engines” so they can contact rate. crunch data and make decisions, but With this, he said, the most www.alcatel-lucent.com 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 services customers are requesting – helping to monetise the network – as well as on a suite of consulting services, which aid companies in customer experience management. “I think there has certainly been a shift from a reactive customer experience to a pro-active one,” said Geller. “The industry has awakened to the fact that you’re really not going to go out and acquire a bunch of new customers – you’ve got to keep what you’ve got and you’ve got to get more out of it – that really speaks to customer lifetime value (CLV).” One example of Alcatel-Lucent’s work is helping a large North American telco improve its QoE: “We’ve taken their first time install success rates from 60 percent to almost 98 percent,” said Gellar, adding the provider has also been Ben Geller, senior director of marketing, Alcatel-Lucent

30 | european communications | eurocomms.com

SPECIAL REPORT: CUSTOMER EXPERIENCE

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 group’s ‘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

32 | european communications | eurocomms.com SPECIAL REPORT: CUSTOMER EXPERIENCE

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 Mika Kitagawa Research Director, Gartner 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

eurocomms.com | european communications | 33 TELECOM AND UTILITY CONVERGENCE -XQH6KHUDWRQ3DUN/DQH+RWHO/RQGRQ8.

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What do customers really want in 2012? KANTAR WORLDPANEL’S FIONA KEENAN EXAMINES THE LATEST DATA TO REVEAL CONSUMER PRIORITIES FOR THE NEXT 12 MONTHS

obile phones are arguably female customer is not yet engaged – the most dynamic part of 54.7 percent of British smartphone the telecoms ecosystem. users are male and 51.1 percent are With 73 percent of aged under 35 – but they are likely to Mconsumers saying that they carry their make a purchase if the benefits of phone with them at all times it is clear smartphones are presented to them that they have become indispensable. clearly and simply. The advent of smartphones has also brought huge opportunities for 4. Non-smartphone users need advice operators – well over a third of people Advice and support provides a new say they use their mobiles when they way to reach potential customers and are bored or as a key part of their is important. Forty five percent of social life. The benefits of enticing new consumers, for example, say that customers and retaining existing ones, they have consulted in-store are potentially huge, but what are they marketing when making their decision looking for? and just under a third have consulted store staff for information when 1. Consumers want more from their buying their phone. Consumers are handsets... looking for guidance; operators that Smartphones are clearly in demand. get this right are likely to yield Across Europe they continue to commercial benefits. outperform standard handsets, now holding a 45.5 percent market share 5. Multimedia usage is a key area of in the UK, 41.2 percent in Italy and growth Users want to 40.6 percent in Spain. We have also The internet is the most used service seen consumer loyalty shifting away on handsets in the UK – a fifth of access the internet from the handset brand towards the consumers use social networking more OS – 17.8 percent of smartphone than texts or calls. Interestingly, more but there are owning consumers state that the OS multimedia usage almost quadruples will be the most important when a customer upgrades to a new fewer unlimited data consideration when choosing their next handset. However, existing consumers “tariffs available handset, compared with only 12.8 are not using these services as much; percent in December 2010. if more can be done to convince them of the benefits, new revenue streams tapping into this market will be a 2. ...but they want it for less will result. challenge for operators in 2012. Price is still a barrier to smartphones becoming a truly mass market 6. Wi-Fi is increasingly a threat What’s next? ” phenomenon. Across Europe the The expansion of smartphones has Nine percent of consumers in the UK upfront cost of handsets is the most had a direct impact on the growth of said they would be likely to use their important factor for over 20 percent of data packages and this looks set to mobile for watching films, 12 percent consumers in the UK, Spain and Italy. continue. But Wi-Fi usage is also on for watching TV and 13 percent for the up – in the UK over two thirds of buying fashion items, while a third 3. Some don’t know they want it consumers used Wi-Fi on their phones would be interested in using Near Field There are clear demographic in November 2011. Users want to Communication for shopping. All these differences among users and non- access the internet more but there are areas look set to grow and offer a users of smartphones. The older, fewer unlimited data tariffs available; clear commercial opportunity. ec

eurocomms.com | european communications | 35 SPONSORED INTERVIEW: AMDOCS

Creating differentiation by simplifying customer experience

he continuing struggles of the recent years has largely pushed is the most fundamental one: global economy, paired with businesses to begin shifting focus improving agent experience in the commoditisation of onto the customer service experience assisted channels, according to products and services across as a way to stand out from the crowd. innovative customer experience Tthe telecommunications market in And to do this, the best area to start systems company Amdocs.

36 | european communications | eurocomms.com SPONSORED INTERVIEW: AMDOCS

“We’ve done consumer surveys systems and processes agents need customer experience – may be sub- that show that many consumers still to cope with: “The work environment par. “[The operator] was talking gravitate towards assisted of a customer service agent is about the 20-20-20 rule of customer channels,” said Yossi Zohar, head of suboptimal. Agents use a set of service: what it means is that the product marketing in Amdocs’ disconnected tools and technologies majority of agents working in customer management division. The to find answers to customer customer service call centres are in US-based company combines requests. Their tools lack intuitive their 20s, being paid 20K a year, and business and operational support navigation, lack data staying on the job for an average of systems, service delivery platforms communications between different 20 weeks,” he explained. “When and deep industry expertise, parts of the application, have people don’t really care – or don’t enabling world-leading service cluttered screens that contain too have the adequate training or providers to offer integrated, much information, and have overly motivation to deliver excellent innovative and intentional customer complex process flows that rely too customer experience, then that experiences at every point of heavily on agents to navigate,” shows.” The majority of the time service. according to the report. agents who should be trained to According to Zohar, while the Forrester adds that businesses efficiently and effectively solve majority of consumers are more can derive quantifiable benefits from customer problems lack the technologically savvy than ever, and focusing on and investing in agent necessary training, data or systems. will most likely research and look This, said Zohar, has a major impact into a product or service online on customer churn. before purchasing it, when it does That is why, back in October, come to actually buying the product, Personalisation Amdocs launched Amdocs CM 8.1, a most consumers seek help in is something that comprehensive suite of customer assisted channels to finalise their management products designed to orders. “Because of the commitment consumers are redefine and improve the overall user period of buying [mobile or network- experience for customer service based devices or services], people increasingly representatives (CSRs). This suite of want to be able to ask questions “ solutions helps companies increase demanding from their from a live agent; touch and feel the agent efficiency and productivity, product they are purchasing, and experience with using intuitive tools that offer a fast fulfill that instant gratification of and consistent response to customer getting the new product in their service providers inquiries. The solution provides a hands that same day.” The same simplified and intuitive interface for idea goes for the support side of CSRs in contact centres and retail things, said Zohar. “When something experience improvement: for every stores; better tools for handling the goes wrong [with a bill, product or dollar spent on improving usability, growing volume of smartphone- service], consumers get frustrated the organisation will realise” a benefit related support calls; and process and don’t have the patience to work roughly between US$10 and automation for faster order taking. it out themselves,” he said. “They US$100, by increasing customer Amdocs CM 8.1 can help cut average want to speak with a live agent, and loyalty and satisfaction. handling time by up to 15 percent, service providers cannot always Because of this, said Zohar, it is and training costs by up to 20 force them towards a cheaper important for service providers, percent, for example, by reducing the channel.” going forward, to start focusing a number of customer information The current experience in assisted significant portion of investments on, screens and intuitively guiding channels that largely exists in the and shift their business strategies agents to solutions. telecommunications industry, towards improving the agent Besides focusing on increasing the however, does not exactly live up to experience. “Assisted channels are quality of customer experience in the standards that consumers are usually the last resort [that assisted channels, however, said demanding. According to a recent consumers turn to], so we have to Zohar, there are two major white paper on improving agent make sure that these agents on the approaches that companies need to experience commissioned by Amdocs other end can properly serve the take in terms of innovation and and conducted by Forrester consumer,” he said. investments: an unassisted Research, the gap between Zohar cites a conversation he had approach, and a proactive one. The customers’ expectations and the recently with one North American unassisted approach has to do with service they receive is huge, and operator that helps explain why the fact that people are getting a lot mainly due to the complexity of customer service – and as a result, more comfortable with the web as

eurocomms.com | european communications | 37 SPONSORED INTERVIEW: AMDOCS

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

38 | european communications | eurocomms.com Simplify your customer experience with Amdocs

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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

riven by rising competition and did not get there through pure luck For real change, a CEM strategy must a new globalised consumer alone. It created brand loyalty and be implemented from the top down and age in which happy, loyal turned customers into active promoters touch virtually every part of an customers are your best of its products through a well-thought-out organisation. Silos should be broken Dmarketing tool and unhappy customers customer experience strategy, focused, down, departments made to your worst nightmare, operators are above all, on ensuring people get what communicate and customers should be adopting customer experience they expect. delivered a seamless, transparent, management (CEM) strategies to build "Many carriers follow Apple for best simple and friendly experience. brand loyalty, turn customers into practice in this respect. Many of the "CEM should be led from the top, advocates, reduce churn and increase newer support practices we now see in otherwise it will struggle to maintain a spend, often cutting operating costs in foothold among the many shifting the process. strategic priorities operators face these It looks like a win-win situation, but it The danger is days. Ultimately, the CEO should instil usually requires far-reaching changes the sense that CEM is at the heart of a within an organisation, from the mindset operators could be carrier's core values," says Mohr- of upper management to the attitude of McClune. sales staff in the smallest store. putting lipstick on a "Operators need to build CEM into the "In general, operators don't give a pig very fabric of their go-to-market good customer experience today, and strategies, from point-of-sale to support that's because of the way their “ and customer lifecycle management. organisations are set up," argues Colin Europe owe much to the Apple Genius That's a tall order, requiring some quite Shaw, the founder and CEO of customer and in-store Genius Bar concept," notes substantial changes to organisational experience consultancy Beyond Emma Mohr-McClune of Current processes." Philosophy. "If your organisation is Analysis.” Tall, yes, but not impossible. customer-centric then, surprise, Telefónica O2's Gurus and FT- In the past year, Belgacom has done surprise, you'll provide a customer- Orange's Orange Care are just two just that. Belgium's leading mobile and centric experience, but if it's focused examples of operators taking a leaf out fixed-line operator launched a CEO- internally then, surprise, surprise, what of Apple's book. But improving customer supported CEM strategy that, in the you'll get is an internally focused one." service, whether in-store, online or via a space of just 12 months, reduced early But how should operators, with their call centre, is just one part of an churn rates by between 20 and 27 entrenched business cultures, switch effective CEM strategy. percent, decreased detractors by 10-15 from an internal focus on profit margins "Interestingly, operators are one of percent and increased promoters by and the bottom line to one that places the top industries putting resources into between five and 10 percent, resulting customer needs, experiences and even customer experience, but the danger is in a significant improvement in Net emotions and feelings at the heart of they could be putting lipstick on a pig. Promoter Score. their business? The cynical view is they're just According to Geert Standaert, vice Take a look at Apple. If shoppers rebranding jobs to 'customer experience president of customer operations at sleep outside your stores just to be this' or 'customer experience that' but Belgacom, it was achieved by being among the first to buy a new product, nothing has really changed much. The more simple and friendly. it's obvious you enjoy fanatical brand optimistic view is that they are really "We assigned a Mr Simple and a Mr loyalty. Apple is one of very few embracing customer experience and Friendly within the organisation: I companies that can boast that kind of have recognised they need to change," became Mr Friendly and the head of success, and the iPhone manufacturer says Shaw. marketing became Mr Simple. Our job

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was to work in tandem to make doing transparency and engagement are Want to give a good business with us more transparent and crucial factors, and even seemingly customer experience? simple, which in turn makes the small changes – such as focusing less Measure the effort customer more satisfied," Standaert on call times and more on call quality – explains. "We didn't do any can result in dramatic improvements. reorganisation but we wanted to kill Hence monitoring every customer For many years Customer Satisfaction silos and did so by creating cross- touchpoint in an organisation, surveying was the most widely used benchmark business unit workgroups involving more customers and correlating customer for judging how well a customer than 200 people, who carried on doing satisfaction, experience and Net relationship strategy was working. But their existing jobs at the same time." Promoter Scores with operational and asking if your customers are happy or Belgacom also set ambitious targets business data such as lead times, not is only useful up to a point, and for a variety of operational and business repeat call, call waiting times and churn doesn't necessarily predict anything KPIs from call answering and lead times is critical to understanding what about loyalty. to early churn, it created a range of elements of a CEM strategy are most A study by the Harvard Business incentives to make customer-facing staff effective. School found that 20 percent of more engaged, and went public with its "Many organisations operate different "satisfied" customers planned to leave commitment to improving customer touchpoints in silos, but what they need the company in question, while 28 experience. is good control over all touchpoints with percent of "dissatisfied" customers "We knew from the start that the a common set of technologies and intended to stay. targets would be very hard to achieve, processes that map customer Net Promoter Score, in contrast, but we wanted to inspire people to be experience across all channels, offers a better indication of loyalty and very creative, very innovative, to think including social media," says Keith ongoing spend. But though it gives you out of the box with different ideas," the Wilkinson, Alcatel-Lucent Enterprise VP an idea of how likely your customers Belgacom VP says. "In some cases we and general manager for the UK and are to stick around and recommend you even exceeded our targets." Ireland. to family, friends and colleagues, it Belgacom customer service now Wilkinson acknowledges, nonetheless, doesn't directly measure their experience answers 90 percent of all calls in under that while "you can have all the of doing business with you. two minutes, up from 70 percent before customer experience technology in the "NPS is often influenced by other the CEM strategy, and schedules a call world, the company must ultimately be factors such as perceptions of the back at the convenience of the focused on wanting to serve the organisation in general, pricing and the customer if the call is not answered in customer." promotional strategies of competitors," that time. Meanwhile, waste calls that The path to best-in-class CEM is a notes Brendan Dykes, principal business do not translate into sales have been four-step process, says Beyond consultant at Alcatel-Lucent Enterprise. reduced by one million. Philosophy’s Shaw. First, companies A more accurate gauge of loyalty is The operator is now focusing on must identify exactly what experience Customer Effort Score. It directly ensuring a seamless experience so a they want to deliver to customers. measures how customers experienced customer who emails about a problem Second, they need to look at what parts each transaction by asking them how and then escalates to a phone of the current customer experience are easy or difficult it was to complete: conversation deals with someone who adding or destroying value, what positive eight out of 10 customers who have a knows the history of the issue and can or negative emotions are they evoking, high effort experience are more disloyal quickly address the problem ¬– crucial taking into account not just what than before. in an age when customers will often customers say in surveys but analysing "Customers don't want to have to put have turned first to the internet and how they behave and act. Third, they in too much effort to do business with social media for information and may be need to design a deliberate experience, you," Dykes says. "That's an important just as knowledgeable as the customer and most importantly, fourth, make the message for operators to grasp." care representative they're talking to. entire organisation customer-focused so In the same vein, Belgacom is also the strategy sticks. driven by emotions," Shaw notes. reducing its number of outsourcing "Operators tend to look only at the "Loyalty is an emotional bond and it's partners from 40 to eight in 2012, functional, rational aspects of a that bond companies should be looking offering longer commitments and more customer experience, they get obsessed to build with their customers, but how volume to those who ensure more with lead times, delivery times, repeat often do senior managers in operators engagement with customers. calls. What they don't think about is that turn round and ask 'what emotions are Seamlessness, simplicity, people are not rational, people are we evoking in our customers today?'" ec

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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

o longer willing to hang example,” Mullen notes. “When we use endlessly on the line to speak these channels it’s not just to have a to a live agent, consumers Operators nice brand conversation; we can fully are increasingly taking their resolve any issues.” Ngripes online when they have an issue typically reach just a Another advantage is the rich with a telecoms service provider. small percentage of statistics Eircom can now draw together It’s easy to see why. By raising a and analyse, giving the company query or reporting an issue their subscriber base valuable trend information – by channel, electronically, not only do customers or across the board. spare themselves the time and “with their own web That Eircom is listening to its frustration so often involved in making pages customers via social media appears contact by phone, they also eliminate to have gone down well with the need to repeat themselves ad customers: Mullen reports that 99 infinitum. the types of customer it wants to percent of customers affected are Whether they have emailed their attract, Eircom has established a “delighted” with the development. query or submitted it directly via an dedicated team within its customer care “[The listening and interaction] isn’t operators web site, the process offers operation to” look after social media, done obtrusively, but they’re them a reassuring audit trail of their web-based queries, chat and email as a impressed to find that just mentioning communications that, along with the holistic activity. a problem online has proactively assigned case number, they can refer This is achieved using Lithium, an triggered a resolution, without them back to at any time. integrated social community having to come to us.” The downside is that response times management platform the operator has This service resonates particularly can be slow – up to two days in some just deployed. “This lets us post and with customers of Meteor, Eircom’s cases. Which is one of the reasons that track comment via Facebook, Twitter mobile service targeted at 15-25-year increasing numbers of consumers are and our own forums,” explains Dervilla olds. Says Mullen: “These customers taking to social networking forums to air Mullen, Eircom’s director of online. are most likely to speak their mind on their grievances rather more publicly. The platform spans all three of Facebook when they’ve had a poor They have discovered that, in some Eircom’s brands - Eircom, the fixed service experience, but we’re now able cases at least, a good online rant can broadband and voice company, and its to nip those frustrations in the bud and have a surprisingly quick response from two mobile businesses, eMobile and turn the situation around.” the service provider in question. Meteor. One of its features is the ability Meteor’s Facebook presence has The challenge for operators is how to to “listen” for mentions of Eircom and amassed 80,000 “likes” or fans. draw all of this together to create that its subsidiary brands across the various Competitively, it is a differentiator. much sought-after fully joined-up social media communities - giving the “Although, as a mobile operator, we are customer experience through integrated company a chance to pick up and third in Ireland by customer base we back-end systems and processes. So address any customer issues quickly, have more online followers than what’s involved logistically? preventing bad news from spreading. Vodafone or O2,” Mullen notes. “Via Irish operator Eircom has just Crucially, the Lithium platform social media we are punching above our invested in a new unified technology connects into Eircom’s central case weight.” platform to ensure a closed-loop management system, as used across Operators that neglect social media customer service experience that other more traditional contact channels. channels in their interactions with incorporates online customer feedback “This means that whether a customer customers do so at their peril. captured via social networks like Twitter issue comes to us by telephone, in “Consumers place a lot more weight and Facebook. store or via the web, all contact is fully on reviews and comments posted in Because it considers the online integrated and tracked - there is no risk social forums than on the claims made channels so strategically important to of losing Tweeted enquiries, for in operators’ own publicity,” notes

42 | european communications | eurocomms.com SPECIAL REPORT: CUSTOMER EXPERIENCE

Russell Palmer, industry solutions providers manage inquiries or can be automatically posted via principal for communications and media complaints online. Making social media operator’s Facebook page. If people are at Pegasystems, a vendor of business platforms part of an operator’s multi- interested and click the buttons, they process management (BPM) and channel customer self-care offering are automatically routed to a secure customer relationship management opens up a huge potential to encourage environment in the operator’s network.” (CRM) solutions. “It’s therefore vitally interaction between customers and their Integration with subscriber databases important that service providers are providers.” or CRM systems (to change personal monitoring those conversations to Social networking platforms offer the data via Facebook), or with the charging understand the feeling of the market in convenience of the internet combined system (to top up or send money to response so what they are doing.” with the real-time service, he notes. another account), is just the starting As operators continue to grapple with And their reach is enormous. “Facebook point, Velayutham adds. “Looking the complexities of internal has over 800 million users and ahead, self-care on social media could organisational silos, which prevent easy Google+ has attracted 25 million new support an even more personalised integration of distinct customer users in just two months,” Velayutham user experience with chat tools for information and billing systems, the says. “While Facebook, Twitter, YouTube direct support, for example.” growing importance of social media etc break new records almost every Other options for the future include channels intensify the need to month, operators typically reach just a crowd sourcing for customer support transform the way customers are small percentage of their subscriber (encouraging customers to help each managed at the front end, Palmer base with their own web pages.” other), or location-based advertising suggests. NSN’s Facebook app is pre-integrated from third parties, Velayutham notes. In relation to Twitter, this means with the company’s unified charging “Even real-time information on network being able to receive customer solution. “To create new offerings, no congestions in certain areas could be communications, routing issues to special charging/billing system skills delivered automatically, when integrated someone who can do something about are required. Just put the needed into our customer care automation it (via a case management system); features together and the new offering solution.” resolving those problems; and then Identity management technologies communicating the results back to the can help associate the customer’s customer to ensure satisfaction. social media ID to their records in Another technology vendor to the service provider’s database, capitalise on the rising power of notes Yossi Zohar, head of social media is Nokia Siemens product marketing for Networks, which has launched a customer management Facebook app that enables solutions at technology companies to move their online vendor Amdocs. “Once the customer service activities onto customer is identified, and social media platforms. The their interactions via social new app, designed media are handled by primarily to enable customer care effectively, the customers to check their channel can go on to be used to account balance, browse and push promotions to the customer buy special offers and and influence the customer’s subscribe to services, can followers.” also be used to channel Ultimately, personalisation and customer support issues. integration are the panacea in joined-up “Traditional online services customer service, concludes Andrew are not considered effective in Mennie, general manager for EMEA at solving problems,” explains Soma CRM vendor eGain. “A central Velayutham, head of product repository of knowledge – customer management for customer experience history, products and services, management at NSN. “Our research technical nuances, etc – drawn shows that just 45 percent of the from multiple platforms and customers in the US, for example, are accessible to all those that satisfied with the current way their play a role in customer

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relationship management, will deliver a that allows knowledge to be profiled by investments, and one emerging trend consistent experience for the customer channel, personalised customer among larger organisations is that they as well as increase efficiencies and experience and can track and report an are recognising the need to deal with all enhance service performance at the interaction that moves cross channel,” of this at a group level,” Mennie notes. telco,” he says. he says. By rolling out customer experience At the back end, this requires that Among those that making tangible best practice systematically across all operators map out the customer progress with all of this are Vodafone of their operations – consolidating journey, irrespective of the interaction and Virgin Media, Mennie notes. Others content, diagnostics and navigation and channel, to understand the different considered to have made big strides unifying interaction channels – SPs paths this might take and the with social media include RIM, the should finally be able to achieve that implications for the operator’s developer of BlackBerry, and Belgacom. 3D picture of each customer account processes and systems. “Either you There is still a lot of work to be done, and the means to act on it, extending a can manually integrate the different but at least things are moving in the more personalised experience to sources, systems and channels, or right direction. “Many operators are subscribers and in turn increasing invest in a customer interaction hub already making [the necessary] 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

onsumer and enterprise bring your own device (BYOD) is why people are bringing their devices to customers have always happening. work.” traditionally been kept in Sandra O’Boyle, Current Analysis’ Liudvikas Andriulis, chief marketing separate silos because their service director, business network and officer at Effortel, which is a virtual Cneeds and expectations of service, as IT services, says that BYOD is mobile network enabler that provides well as their budgets, have been relatively common in knowledge transaction processing and considered too different to be grouped industries: “It’s usually the top management services for MVNOs as together. executives who are the ones doing it – well as acting as an MVNO itself in However, a number of trends are they bring their own iPads or iPhones in partnership with supermarket chain emerging that question whether this and then suggest that everyone does Carrefour, has another take on this approach will continue as the it.” trend. distinctions between different types of There is also a class of younger user He says that there has been an customer begin to blur. – the digital native for want of a better erosion in the relationship that mobile Of particular interest is the expression –that is bringing its own network operators have with their retail consumerisation of IT – smartphones devices into work through frustration subscribers, driven by the increasingly can accommodate a higher bandwidth with company IT provision. powerful brand relationship that than ever, the use of tablets is on the Says O’Boyle: “BYOD really depends handset manufacturers, particularly rise and people are allowing their home on the culture of the company, the type Apple and the Android derivatives, have and work lives to converge. of industry and the individual’s role built with end users. As a result, employees are within the business. But it is perhaps a “It’s difficult to see how network increasingly using their personal mobile bit of a distraction from the real issues operators can rescue that position devices at work to access enterprise – people are using mobility to change unless they truly differentiate their data. A recent survey by Current business processes and make services, something that rarely happens Analysis shows that despite company businesses more efficient. It’s easy to today,” continues Andriulis. “That can policy – a third of enterprises prohibit get distracted by the security and happen in two ways – either in the the use of personal devices at work – management issues rather than look at provision of unique services and

44 | european communications | eurocomms.com SPECIAL REPORT: CUSTOMER EXPERIENCE

applications that only operators can Reinhard Zuba, chief marketing officer segments, it’s more about having a full deliver, or by delivering exemplary at Telekom Austria Group, says: “It’s view of the customer and ensuring that customer care.” not about silos but about identifying the service expectations are met as well as One way could be to cater for the needs of a segment and then designing potential opportunities explored and new breed of “prosumer” or corporate product and service around those exploited. home worker customer. Says Andriulis: needs. At Telekom Austria we provide a Yossi Zohar, head of product “It is not uncommon now for some convergent solution - we are a marketing for Amdocs, says that many households to own five handsets, a converged and total communication telcos are running disparate systems couple of tablets and broadband dongle provider and we find that the demand for their enterprise, consumer and SME or two. They rely on those devices for high quality service is increasing.” customers. “To deliver optimal completely, particularly in increasingly customer experience you need a 360 common ‘mobile only’ households. That degree view of the customer regardless environment starts to look very much The trick is to of where they are. It’s hard to give like a small business.” them a good experience without this. These can be incredibly valuable be able to differentiate Although telcos are providing households to the operator and sophisticated services their customer operators will need to go far beyond the between different support systems are not necessarily up agreed standard consumer SLA to keep to date.” the relationship intact. roles, and different So what can we conclude? A key “We see preferential upgrades, “service needs driver of differences in the treatment of credits and personal service. We expect enterprise and consumer customers that situation to develop in the coming has been that in a B2B relationship years with preferential pricing plans, Camille Mendler head of enterprise there are many roles, fulfilled by household rather than individual billing verticals at Informa Telecoms & Media different people within the business, and corporate standard levels of believes that if telcos think smarter requiring more complex account service guarantee,” adds Andriulis. about their customers they” can use management; whereas in a consumer Lee Myall, UK regional director at their expertise to bridge the gap relationship all of these roles are Interoute (which it must be said doesn’t between the consumer and the typically fulfilled by one person. run a consumer business) agrees there enterprise and also create new However many organisations are looking is a case for a different level of service business opportunities for themselves. to blur the lines, particularly where agreement that meets the needs of She cites the example of Orange common services are provided to each prosumers. Business Services joint venture with sector, and similar skills are required, “Many people have really Veolia Water, m2O city, to provide smart and this is increasingly prevalent where sophisticated IT set-ups in their homes, metering services. consumer devices are making their way but no one is really offering a halfway Peter Glock, cloud services director into business. house service plan between consumer at Orange Business Services There economies of scale to be had and enterprise that caters to their comments: “At France Telecom Group in blurring the lines between enterprise needs. The advent of FTTH really we have a traditional approach, our go- and consumer, but there is also a changes the level of what can happen to-market approach is segmented by challenge in recognising the areas in the home,” he says. the size geography and market sector of where differing needs still exist and in While some telcos may not appear to our customers.” ensuring that the customer experience understand the extent of the But are the offers any different for is consistent across all touch points. As opportunity, there are those that most these market sectors or are they Duncan Barnes, director in consulting at certainly do. T-Systems, for example, converging? Deloitte concludes: “The trick is to be recently announced that its CEO “Years ago we had two remote able to differentiate between different Reinhard Clemens now also has full access offers for our customers – one roles, and different service needs, to responsibility for IT at Deutsche was SME and there was a different one different people within business Telekom. The Germany-based operator for enterprise. Now they’re branded customers, and only treat those with intends to consolidate the entire differently but they’re the same offer very similar needs and expectations to group’s IT activities in one department, because the requirement is the same,” consumers in the same way as an indication that there could be some says Glock. consumers – otherwise commercial changes in the offing. Perhaps there isn’t a right or wrong aspects of the relationship may be Not everyone agrees, however. way to approach different customer damaged.” ec

eurocomms.com | european communications | 45 SPONSORED INTERVIEW: ORACLE

Fostering brand loyalty in the telecommunications sector

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

46 | european communications | eurocomms.com SPONSORED INTERVIEW: ORACLE

increasingly important for companies – the ability to differentiate the hard to understand customers’ needs. to understand and build better [customer] experience purely on the “Phone companies usually have largely relationships with customers to try basis of network coverage or inconsistent or incomplete data, for and gain loyalty. “[Service providers] bandwidth is not a sustainable example,” he said. “When they’re have to understand exactly who you differentiation.” tracking customer experience, most are, what interactions you would like Where service providers become phone companies just track the last with [them], what interactions you’ve noticeably different in terms of call you had with the call centre, and had in the past, etc., so that they can customer experience is when they that’s no good.” The traditional recognise customers’ needs” said “connect their insides” said Rawling – method of tracking customer behaviour Tankha. “Once that happens, the first meaning converging systems and based solely on the last time they building block is understanding what platforms within a company to make phoned with a complaint or inquiry, kind of relationship [customers] want them more seamless and efficient – means that chances are, that data is to have with [service providers] rather creating the opportunity to develop not relevant any longer, said Tankha. In than the other way around. That’s meaningful relationships rather than addition, he said, customer service where the main difference lies – [the just process transactions. “I think we agents often do not know how to relationship] must be built from the need to get very conscious and simply address problems customers outside in, rather than the inside out.” coherent in terms of what we really may have, or make appropriate Gordon Rawling, senior marketing mean when we say things like recommendations: “They often don’t director at Oracle said that being able ‘relationships’,” he said. have the systems or capabilities to be to establish these relationships is One problem that most service able to give you instantaneous where differentiation in customer providers need to solve in moving answers on what you’re calling about,” experience will come from between towards developing better customer he said. If service providers telecoms. “Many of the service experiences and relationships, said understand how to tackle the problem providers [Oracle] is talking to have Tankha, is that these companies often of converging all systems and seen a future not so far away where – have little or a poor quality of data departments – which Oracle’s software certainly in the more mature markets about their customers; which makes it systems largely help to facilitate – the

eurocomms.com | european communications | 47 SPONSORED INTERVIEW: ORACLE

next piece of the puzzle then, is to inquiries, customer care, etc. Being for service providers to move away understand how to create a different able to start my customer experience in from a focus on selling, and more shade of experience to suit the needs one channel and finish in another – towards interacting with customers. of the various types of customers each that’s the first component of “What it’s really about is changing the company has. interactions.” Second, said Tankha, focus of what you’re doing – which “Different customers have different service providers need to get away from isn’t to say that you’re not trying to needs – somebody who is spending the traditional idea of “I, as a service improve your business and 100 dollars a month versus someone provider know what’s good for you, and relationships, but it’s about focusing who is spending 1,000 dollars a month I’m going to offer you a product or a on those interactions,” said Rawling. may need different levels of “This mentality is what’s colouring and interaction,” said Tankha. driving the way in which [Oracle] we are One element of the customer Loyalty doesn’t making our software.” experience that needs to undergo Rawling said that a big contributing fundamental change, he added, is the just mean getting factor to the current disconnect that current system in which most service can exist in terms of customer providers decide what product will be your customers to experience has to do with the given to their customers, instead of buy more technology that is being used to the other way around: “With this, you operate telecom systems. get a package or bundle that might not “ “Part of the problem that’s work for you,” said Tankha. “You’re not bundle based on that.” He said that happened in the industry is you have getting bundles because [service service providers need to start giving lots of bits of these processes providers] are trying to predict what customers the flexibility to allow them supported by lots of different bits of your buying behaviour is, but rather, to create their own” products and technology that work in very different because the systems they’ve got are bundles based upon the standard ways – and if the customer has done unable to allow you the flexibility to services available. “If customers want things on multiple channels, then choose your own bundle and create to bundle their broadband and mobile they’ve likely had an unsatisfactory what you want, instead.” services and need 100Mb of experience,” said Rawling. With this in Creating brand loyalty amongst broadband a month, and only 200 mind, one of the benefits of the customers through a more minutes of mobile time, for example, portfolio of software systems that personalised user experience can they should be able to choose that,” Oracle is offering is the ability of these largely mean profitable growth overall said Tankha. products to supports all areas of a for telecoms, said Tankha. With this in Lastly, is the focus on creating system, making sure it works in mind, providing a consistent, loyalty and attachment: “Loyalty unison. However, noted Rawling, the personalised and interactive doesn’t just mean getting your biggest mistake the industry could relationship with customers requires customers to buy more – it’s about make is to think it is possible to buy three important components to be creating a sense of wanting to be one single bit of technology to solve all implemented by telcos, he said. First associated with a particular brand, customer experience management is the ability to provide seamless offering flexibility and developing a problems: multichannel interactivity so that different business model of how you “It is also very much about changing customers can choose the channel of interact [with customers].” the way in which the business works, their choice, when they need it, he said: The whole mentality around doing and working on really touching the “This is not just for ordering, but for all business needs to change overall then, customer.” interactions – troubleshooting, billing where the biggest change required is www.oracle.com

48 | european communications | eurocomms.com Oracle Communications 10 0 of t h e 10 0 Top Telcos

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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. SPECIAL REPORT: CUSTOMER EXPERIENCE

Understanding customer experience seminar

uropean Communications held are rising, reported Keenan, but a successful customer fortunes among handset manufacturers Whereas experience seminar in London remain mixed. Canada-based on 18 January. BlackBerry manufacturer Research in operators have EAttendees saw presentations from a Motion is losing ground in most traditionally separated range of speakers from across the European markets except Spain, while telecoms ecosystem and participated in Nokia is down across the board. consumers into retail a lively discussion on how to provide a At an OS level, Android has best-in-class service. overtaken Apple’s iOs in all European “or enterprise groups, Kantar Worldpanel’s customer insight markets surveyed. As Alcatel-Lucent’s director Fiona Keenan kicked off head of strategy Peter Spencer pointed there are a myriad of proceedings by presenting the latest out, it is important not to “idolize” other segments that data on what smartphone consumers Apple despite its customer experience are using now and what they want in successes and amid the operators could target the future. overwhelmingly positive media On the plus side satisfaction levels attention. specifically – from When choosing a handset, OS is now women to green Pre-register for our Big almost as important as the brand of Data seminar in April the device itself according to UK consumers consumers, added Keenan. European Communications will be Friends and colleagues remain the hosting a new seminar on the theme of most popular source of information for want more for less. Big Data in April 2012. Programme UK consumers when buying a handset, Andrew Jones, managing director of information will be available soon on but the importance of retail should not service design at Openreach, took the www.eurocomms.com. You can also be forgotten with store displays coming stage to give an overview” of how follow us on Twitter @eurocomms to a close second. customer experience works in practice keep abreast of the latest Keenan also pointed out that the from an operator’s perspective. announcements. trend of consumers moving from PAYG Openreach, which is part of BT To register your interest in attending to contract tariffs will continue as will Group, looks after the UK’s local the event now; please visit increases in data usage. The flip slide access network. By providing a wide www.eurocomms.com/seminar and is that is consumers want value – they range of operators with their 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 [email protected]. Andrew Jones, managing director (service design), Openreach

50 | european communications | eurocomms.com SPECIAL REPORT: CUSTOMER EXPERIENCE

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

Sanjeev Kumar, head of telco consulting Europe, Infosys learn from best practice in other industries. infrastructure needs, Jones said the The me-tailing strategy – defined as There were four key areas to focus company’s mission was to provide an treating consumers as distinct entities on, according to Kumar: provide a open access to all their customers – has potential far-reaching seamless customer experience across equally. consequences and tied in with some of all channels; user customer data to “We not only have to look after our the data Kantar’s Keenan pulled out improve their experience; develop immediate operator customers but also earlier. differentiated services; and engage have to keep an eye on the end users Whereas operators have traditionally customers’ “hearts and minds” through too,” said Jones. separated consumers into retail or authentic and serious conversation. ec Key to Openreach’s current work is laying a fibre optic network to cope with Speaker videos the continued growth of mobile and video services. If you missed the event you can still catch up with all the presentations by visiting Jones said the board has a “huge www.eurocomms.com/video and selecting from the below: pile” of KPIs that it monitors in a weekly meeting, but when pushed Dan Adams, executive director, communications, media and technology at Accenture, said there were perhaps half a dozen outlines what operators need to do to improve their physical retail outlets in order to that were considered more key than provide a great customer experience. most. Andrew Jones, managing director (service design) at Openreach, outlines how the UK- The problem, he acknowledged, was based company defines and delivers customer experience with the aim of becoming a that the telecoms ecosystem remained leading customer-focused organization. a very complex one that involved a Fiona Keenan, consumer insight director at Kantar Worldpanel, looks at the latest data supply chain which needs to be from across Europe that shows what consumers are really looking for in 2012. simplified. Sanjeev Kumar, head of telco consulting Europe at Infosys, looks at how the telecoms Dan Adams, executive director of industry is evolving to embrace new technologies, competitors and what learnings can communication, media and technology be applied from other industries. at consulting firm Accenture, focused on the physical retail side of the And joining the speakers on the panel discussion: customer experience. There were three key trends, he said: Julian Johns, director EMEA Enterprise Sales, Logmein the shift from retailing to me-tailing, Gordon Rawling, Senior Marketing Director Oracle Communications improvements in service management Peter Spencer, Head of Strategy and Portfolio, Alcatel-Lucent and developing a flexible supply chain Yossi Zohar, Marketing Director Amdocs to support cross channel retailing.

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2012: the back office moves forward THIS YEAR SHOULD SEE OPERATORS’ BACK OFFICE SYSTEMS FINALLY GET GIVEN THE ATTENTION THEY NEED TO DRIVE NEW BUSINESS MODELS

perators have been happy to “At the final stage of the procurement blame a lack of standards, Operators need process it was common for suppliers to vendors and themselves for a drop their price by offering versions of lack of professionalism in their to grasp that they will their products that didn’t conform to Oback office systems over the past decade. industry standards or gave operators a But times have moved on and, says be taking a smaller short-term fix.” Martin Creaner, president and CEO of slice of a much bigger Now, Creaner says, operators have industry body TM Forum, 2012 should be admitted that their back office systems the year when concrete changes will be “pie aren’t agile enough and that they must made. invest in long-term solutions. “Operators have finally understood that “The market has matured and both they can no longer carry on with back about the app that sits on your phone,” parties know they need the other to be office systems that resemble a dog’s said Creaner. “All the profitability will sit in successful if everyone is to survive and breakfast,” Creaner told European the back office and will be determined by prosper,” said the president. Communications. how you ”analyse customers, provide However, a maturing market brings its “It’s insane that big operators have lived customer care and build new services.” own challenges. with them for the last 10 years, but I have The president says several factors have “Consolidation reduces choice and it is spent a lot of time over the last few come together to give him cause for increasingly difficult for the smaller months talking with many of them and optimism. On the standards front, which players to strike a deal,” warned Creaner. they know the world is moving on and TM Forum advocates as the biggest “There is probably less innovation as a that they have to act.” challenge to implementing a professional result.” Crucially, Creaner says that while he back office, there has been continued Ultimately, the stakes for getting it has heard this refrain before this is the uptake and collaboration over the year. right are high. Creaner predicts that first year he believes that they actually Twenty-five vendors have now put their operators have an 18-24 month window mean it. products up for certification and many are to ensure their back office systems are The reason? “All conversations come moving towards out-of-the-box capability – able to take advantage of the data round to threats provided by the OTT a key element in enabling operators to revolution. players,” replied Creaner. automate their systems and deliver new “Operators need to grasp that they will While operators now openly accept that services more effectively. be taking a smaller slice of a much bigger companies such as Facebook and Creaner says there is a much more pie,” concluded Creaner. “To do this they Amazon will disrupt their business models, collegiate relationship between vendors need to control the data and then provide the battle will be fought in the back office. and operators that can only be good for the connectivity. The back office will be “From a business point of view it’s not the industry as a whole. the hub for this.” ec

eurocomms.com | european communications | 53 BACK OFFICE 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

ightly integrated operational and with the likes of T-Mobile, Verizon and protections are preferable to on-device business support systems (OSS Sprint. anti-spam solutions, as they can protect a holistic customer profile on Mahaffey believes that operators have a broad base of users relatively easily.” demand to any application.” vested interest not only in making sure Malware and spyware – malicious TThat smartphones and tablets have their network is reliable and secure, but applications – affect mobile devices just as transformed the way consumers interact also in ensuring that their users feel safe they do PCs. On smartphones, malware with online services can only be a good using their mobile devices. There are writers can steal data, hijack phones to be thing for the convenience of users and numerous potential security issues used as “botnets” or fraudulently charge retailers, but also for service organisations affecting mobile devices, he notes — from money to a user's phone bill, Mahaffey and network operators targeting them with theft to spam to malware – which can be explains. Mobile devices also have the enhanced propositions. tackled with different approaches. capability, like PCs, to perform denial-of- But what of the security issues as For lost or stolen devices, for example, service attacks against mobile networks if consumers expand the ways they use their smartphone software is now available to a sufficient number of them in a given handsets? Who is responsible and how help users if their device goes missing – region are infected, he adds. crucial is it to retaining consumers’ trust including the ability to locate it or remotely There are multiple approaches to that operators play their part in erase the data. “Operators are starting to eliminating malware: screening app stores, safeguarding their advanced mobile help people via customer service, or via a scrubbing network traffic, and using on- transactions? retail outlet, to install missing device device agents. Yet Mahaffey says that, “There are multiple parties who software that can remotely find a device,” while network-based solutions have the have a vested interest in keeping Mahaffey notes. advantage of being able to cover a broad mobile devices safe, including the While text-based spam tends to be base of users, they can also complicate person using the mobile device, their considered more of a nuisance than a operator back-ends because all data traffic network operator, any applications or security threat, it is being used increasingly must flow through such systems: “They services they are interacting with, and to spread mobile malware – something are also becoming less effective as many potentially the person's employer if that operators are in the best position to users download applications over Wi-Fi the transaction is business-related,” address, he says: “Because all SMS (outside of an operator network) or over comments Kevin Mahaffey, CTO at messages travel through the mobile SSL (where the data is encrypted and Lookout Mobile Security, which works operator network, network-based cannot be examined).” The responsibility isn’t 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

54 | european communications | eurocomms.com BACK OFFICE

lax about security, and that in the event of problems of security on [business] VoIP a customer’s bank account being hacked The most trunk connections, a Session Border the blame is more likely to lie at one of the Controller – effectively a VoIP firewall – can end points (the bank, the application important measure be used. This is most effective when developer or distributor, if not the end that operators should installed at customer premises.” user), than with the provider of the “pipe” In due course, IP-related security that joins them. take is communicating vulnerabilities will also come to the fore in “It’s no different from if I was using a PC the mobile dimension, as operators move and an ISP to access the Internet,” he “a realistic risk to LTE architectures based on a flat, all-IP says. “Can I really hold the ISP responsible core network. if my online account has been hacked? I assessment to their Where operators are reticent about doubt that would stand up in court.” customers pushing up their operating costs to provide Others believe operators won’t get away a service that customers still don’t seem to with shirking their responsibilities for much fully appreciate, an alternative is to see the longer. services such as ISDN to VoIP.” Members situation as an opportunity to add value. Given the range of potential security of the UK’s Internet Telephony Service While consumers may be unwilling to pay threats facing customers (which also Provider’s Association (ITSPA) have extra for enhanced security, business includes the vulnerabilities that creep in reported numerous ”examples of call fraud customers may well do. As indeed might as mobile services hand over to WiFi on VoIP circuits, he notes. content providers, service organisations and connections), Gareth Machlachlan, COO “The problem is not helped by the retailers keen to increase consumer and co-founder of mobile security vendor telecoms operators, many of which confidence in mobile transactions. AdaptiveMobile, believes that the continue to claim that their fixed-line and Trevor Hackett, an enterprise architect at traditional piecemeal approach to mobile mobile networks are secure, despite systems integrator 2e2, notes that O2 security is no longer sufficient. He argues ample evidence to the contrary,” he adds. offers enterprise customers enhanced that it is time that mobile operators led So what should operators be doing? mobile security solutions, which helps the way in mobile security by introducing “By far the most important measure differentiate it from its competitors. “They a comprehensive solution to mobile that operators should take is provide a ‘walled garden’ for business security spanning both the handset and communicating a realistic risk assessment customers,” he explains, noting that 2e2 network level. to their customers,” Cox says, pointing to uses the service to guard against sensitive “Only the mobile operator has the business customers who generally accept company data being lost with a mobile opportunity to ensure that all data crossing they have a role to play in ensuring their device. “If I was out, had too much to drink the network is legitimate, and as such it is own security. “They should then ensure and left my phone in a bar, the company they that have the opportunity to address that appropriate security measures are would be able to wipe the phone remotely.” this growing issue,” he says. “They can implemented on their own networks and The technology behind this is a mobile either rise to the occasion and be seen as strongly encourage any corporate device management (MDM) platform, industry leaders in mobile security or wait customers to do the same. which can also be used to set central for others to lead the way and risk “With very few exceptions, operators are access limits, controlling what users can jeopardising not only their customers’ not implementing these measures,” he and can’t do on their business handsets. personal data but also their trust and claims, adding that there are two reasons “MDM facilities will become more custom.” for this. “Firstly, even within the telecoms prevalent,” Hackett predicts, noting that It isn’t just data that can be intercepted industry, awareness of security is limited. the next challenge for companies will be either. As has been highlighted by the Secondly, security costs money. The to extend similar controls to handsets News of the World phone-hacking scandal telecoms market is cost-sensitive, so there that have not been issued by the which continues to rumble on in the UK, is a reluctance to make the necessary company, as users increasingly use their voice traffic continues to have its own investment. This is short-sighted, because own technology for work purposes. vulnerabilities. the cost of effective security can easily be 2e2, which partners with O2 to provide “This is both a mobile and fixed-line justified when the potential losses are combined IT and communications issue,” adds Peter Cox, CEO at UM Labs, considered.” solutions, notes that externally hosted which specialises in VoIP and unified Determining the appropriate solution is services can simplify the proposition for messaging security. “While mobile best achieved via risk analysis, Cox telcos, making them a “no-brainer”. networks have a specific set of problems, suggests. “To address the problem of call Compared with self-managed “on-premise” and the problem of call interception is eavesdropping on mobile networks, there a solutions, those delivered via a SaaS particularly significant here, fixed-line number of low-cost applications for model can be deployed more quickly and operators also have to face problems such smartphones which provide effective call cost-effectively, with no disruption to a as call fraud - especially as business encryption. To handle the problem of call mobile operator’s existing ICT customers move from traditional telecoms fraud and to address the more general infrastructure. ec

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Can we predict the network of the future? THE NEW YEAR HERALDS THE USUAL ARRAY OF PREDICTIONS BUT WILL THEY COME TRUE?

very new year, the European subscribers will begin to sign up in volume Communications inbox gets filled The stakes are during 2013 and begin to overtake with predictions for the year enterprise subscribers by 2015. However, ahead. January 2012 was no high to provide the consumer segment will account for Edifferent, with the usual suspects of cloud under half of all revenues, which should consumers with a “definitely taking off” and the “cataclysmic reach €200 billion by 2016 according to consequences” of OTT service take-up flawless 4G the research firm. appearing on several lists. “Over the next 18 months operators in One commentator is convinced this “experience Europe will flesh out their LTE strategies,” year will be the year of mobile VoIP while adds Commscope’s Phil Sorsky. “Ensuring another assures us it will all be about the that new technology can be integrated rich communication suite. will also improve network efficiency and across 2G, 3G and 4G is key.” Such predictions not impress Juniper utilization while reducing network costs, As this trend evolves, heterogenous Networks’ Trevor Dearing. “I can’t sit back according to the China-based” vendor. networks will play an increasingly key role, as everyone ignores the key ingredient Improving wait time should be another key according to Sorsky. “Operators will that makes all these innovations work – goal. introduce heterogeneous networks to help the network,” he said. “Despite the current fixation on provide ubiquitous high-bandwidth Dearing believes the challenge will be bandwidth, network speed will no longer connectivity,” he explains. the “unknowns” caused by the adoption be measured by the bandwidth a service “The stakes are high to provide of any new technologies and business needs, but determined instead by the wait consumers with a flawless 4G experience processes, and how to plan for them. time experienced by users waiting for and heterogenous networks will play an “We know that the volume of networks to respond. Zero wait time for integral role in next-generation deployment information is greater and the speed at users is the new paradigm,” it said. strategies.” which it is consumed is faster. What is As an all-IP future looms, so does that With Juniper Research predicting that unknown is where the weak point will be other favourite prediction – LTE. With the LTE service revenue will represent over 26 and how it will manifest itself,” he added. rate of LTE network commitments at an percent of total service revenues from all For its part, Huawei believes operators all-time high, the total number of LTE mobile services across all generations need to speed up their transformation base station deployments will reach within the next four years, operators will towards an-all IP network and “lead the almost one million by 2014, according to need to ensure they choose where they industry into an all packet phase” to help Juniper Research. invest their money wisely. mitigate Dearing’s concerns. Although take-up will be dominated by But then again, these are all just The provision of on-demand services enterprise subscribers at first, consumer predictions. ec

eurocomms.com | european communications | 57 NETWORKS 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

lthough mostly confined to driven by frustrated teleworkers, utility companies are building, paying for passive elements, network consumers, content providers, local and sometimes running fibre networks. sharing agreements are businesses and public sector Competitive cablecos are delivering proliferating, due largely to organisations. All want the same symmetrical high-speeds and, together Aaccelerating pressures to cut costs facilities and access to corporate with altnets, challenging incumbents. market will explode the coming years.” applications that urban dwellers enjoy. Governments are starting to realise Despite all the noise about creating Sophisticated intelligent devices from that FTTH/B/C can stimulate local knowledge based economies, reducing TVs to tablets are becoming ubiquitous economies and support rural global emissions and cutting national but the networks to which they connect businesses thereby increasing the and international travel, many outside cities are hardly fast enough to number of jobs. Rolling out the efficient, governments seem unwilling to invest support their capabilities. Everyone cost effective smart e-government fully in the one thing capable of wants access to bandwidth hungry services including health, education and delivering them – fibre networks. multimedia applications everywhere. culture they want depends on fibre. Especially fibre networks in underserved Gabrielle Gauthey, senior VP, public Recognising they cannot leave it to areas where people live and increasingly affairs, Alcatel-Lucent suggests there is operators to meet the entire cost of work. Instead operators are widely left to a better business case for fibre in rural FTTH/B/C deployments, several fund fibre deployments and, somewhat than urban areas: “People queue to get European governments recently understandably, have concentrated on fibre and, where copper is not as good announced new funding either through low hanging fruit in major cities. as in cities, there are fewer competing direct grants or Public Private In many developed European technologies. As an interim measure, Partnerships (PPPs), which together with telecoms markets, the rural/urban FTTN/C combined with VDSL is a good JVs are popular. digital divide is growing despite first step to FTTH and a temporary “Governments can stimulate demand government pronouncements about solution for less dense areas.” by increasing awareness, investing in launching e-government initiatives, Most incumbents favour the FTTC/ end user devices and increasing stimulating rural economies to increase VDSL model, which is faster and more confidence that revenues will be realised jobs and relieve pressure off major economical to deploy but connection in future. If governments have a stake in conurbations. Access to fast broadband quality varies according to the length of PPPs they underwrite some market networks is as vital to the economic the local loop which differs considerably risk,” explains Matt Yardley, principal health of rural areas as transport by region and country. analyst, Analysys-Mason. “At the heart infrastructure. So hungry are rural inhabitants for of all models is how to handle high “In rural areas the socio-economic broadband connectivity that the take-up market risk and demand uncertainty. benefits of fibre are high,” explains rate is rising and they appear willing to There is considerable activity throughout Hartwig Tauber, director general, the pay the price. That price, so far mostly Europe but very different and FTTH Council. “Fast speeds and paid by telcos, is in building FTTH/B/C. fragmented policies. Ultimately the upstream capacity are becoming more However, significant capex, thin margins, solution is not to create numerous small important with on-line storage, the low take rates and delayed ROI have scale telcos.” cloud, video and applications requiring made the business case for building Local and national European symmetrical stable speeds - rural FTTH/B/C networks too challenging. governments are expected to make €50 challenging for all but fibre. Only a few “The ROI is not such a big problem billion available for rural broadband years ago the question was ‘why fibre’ because the approach is different. projects. Telcos, utility and construction now it’s ‘when fibre’.” Networks are used by several service companies, co-operatives and New ways of working and providers in a utility model; the main municipalities can bid for funding from communicating have cut ties to city players are utilities or municipalities,” the Connecting Europe Facility. Wanting offices changing market dynamics. continues Tauber. Wanting faster roll out, superfast rural broadband to support a Demand for high-speeds is burgeoning municipalities, local communities and single market for digital public services,

58 | european communications | eurocomms.com NETWORKS

e-government and promote local job technology to keep Europe competitive.” 4.4 million houses and supplies opportunities, the EU is making €9.2 Cablecos, offering superfast speeds, wholesale passive fibre. Operators FT- billion available for broadband projects. already pose a competitive threat and Orange and SFR also provide wholesale Although it may not go far when shared spur incumbents to accelerate rural fibre access and collaborate to deliver rural between the 27 member countries, it is deployments. Such is the case in broadband especially where their expected to attract more investment: an Holland where cable is ubiquitous; networks are duplicated and underused. estimated €6-15 for every euro. French Numericable is influencing Wanting 90 percent coverage by The EC’s Digital Agenda wants all operators’ fibre projects and Britain’s 2017, the British Government’s BDUK households to have a minimum Virginmedia has a similar effect. (Broadband Delivery UK), initiative 30Mbps by 2020 and over 100Mbps German cablecos offer up to 120Mbps – allocated £530 million for broadband for half the population. “The most faster than Deutsche Telekom, which is rural networks – compared to a recent important first step is to connect public buying fibre capacity from municipalities. announcement of £100 million for sector buildings which costs less to superfast broadband in four major cities. supply, yields higher returns, supports Eventually core WDM (Wavelength local socio-economic benefits and The Digital Division Multiplexing), technology maybe stimulates broadband demand,” be adapted for access networks allowing believes Charlie Davies, principal Agenda is a political altnets to use different wavelengths analyst, Ovum. “There will be a mix of statement with no real thereby speeding competition. Investing public/private finance and communities £2.5 billion in fibre build, incumbent BT collaborating on civil access works. incentive for operators aims to reach two thirds of UK premises “There is still disagreement about the by end 2015. It is exploring PPPs to best approach – a big tender from one “to add fibre build regional FTTC using high-speed regional supplier or smaller, copper for the final drop and may deploy municipality/local community based mobile/satellite or even TV white spaces networks but everyone wants to avoid Altnets are similarly driving to reach the final 10 percent of houses. differing standards and interoperability competition while local governments and There are numerous possible problems,” she continues. “FTTH only utility companies are ”building very local scenarios suggests Galvin: “Some makes sense where there is one systems and laying ducts when streets communities dig trenches for BT to lay infrastructure provider but throughout are opened. Some small communities fibre; putting amplifiers on copper lines Europe, local areas are funding fibre are paying to dig trenches others are increases speeds and new technologies, deployments, creating a clash between stringing fibre on poles for speedier, less like pole top DSLAMs in rural areas, allow regional push for fast FTTH deployment costly, deployment. power feeds from houses – cheaper than and parallel moves by operators building “There are multiple layers of active fibre.” Disputes about the cost of networks and sharing infrastructure.” competition,” explains Mike Galvin, MD, access to BT’s pole/duct infrastructure Most agree a single open access fibre next generation access, Openreach. resulted in price cuts. network, rather than a host of smaller “Operators can enter the market via FTTH Council statistics highlight systems run by numerous players, is the LLU, wholesale, service provider level as traditional problems: take rates vary by optimum solution. “Fragmentation is a VNOs or at the service level. Although country with 62 percent in Norway, significant problem, each country is cablecos are credible competitors and dropping to 10 percent in France, fiver different and there is no common more serious than in the past, they have percent in Switzerland and less than one vision,” explains Gauthey. “In most no wholesale arms.” percent in Britain. Municipalities/utilities countries incumbents still own National initiatives promote accounted for 12 percent of houses infrastructure. Some have taken a deployments in France and Britain; Italy reached in June; altnets/MSOs passed radical approach, suggesting fibre has local fibre plans where, like France, 55 percent leaving incumbents supplying projects should be financed by many and public investment banks help local 33 percent. treated as a utility.” governments fund infrastructure. In “The business case for rural fibre is Fibre is happening but if it does not Spain, regulatory reform and challenging regardless of who is accelerate plans, Western Europe may competition are expected to increase investing,” says Matthew Hare, CEO of find itself on the wrong side of the digital fibre deployment and Scandinavia Gigaclear. “Governments can make the divide globally and regionally as deployed local fibre long ago. environment more favourable, encourage developing telecoms markets leapfrog to The French government wants 10 substantial investment and prime the fibre. Walter Goldentis, CTO at Austrian million houses passed by FTTH/B by market to get initiatives rolling. The key operator A1 cautions: “The Digital 2012 and four million subscribers but driver is competitor activity and Agenda is a political statement with no fibre deployment and uptake is still slow communities recognising fibre is real incentive for operators to add fibre outside urban areas. Working with local transformational – within 20 years there but it’s important to push new authorities Numericable offers fibre to will be little copper left.” ec

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Register now @ www.loyaltyandproﬁ tability.com 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

HOW CAN OPERATORS PROFIT FROM THE GROWING SECOND SCREEN SPACE?

or all the understandable live TV, which they passively consume, Others are making subscribers move to excitement around the growth of preferring instead the interactivity of tablets a new service tier to receive the tablet smartphones and the associated and smartphones,” adds Anthony Rose, app. surge in data, it is easy to forget co-founder of Zeebox – a social TV app. Adds Heynen: “I think the first thing Fthat they still lag behind another device in Rose claims 30 percent of all tablet operators will do is to actually turn their our affections. usage is in front of TV and growth in this companion tablet apps into full-fledged The TV, by sheer numbers alone, space is driving his UK-based company to multiscreen devices so the tablet or remains the number one device when it be part of a revolution in TV viewing. mobile device moves from being a remote comes to the consumption of content. When connected to a smart TV, the control or live streaming device to Yes, the trend is changing as the personal zeebox app lets you not only comment on becoming a digital video recorder (DVR).” nature of phones means there will be your show, it allows you to see what your In other words, operators can push more of them eventually, but we’re not friends are watching, buy or download selected content to the tablet and a user there yet. relevant products such as books or songs can pause, fast forward, or rewind the What is interesting to note, however, is and helps you find out more about what streaming content. how the two are converging here and now. you're watching via links to, for example, Heynen believes 2012 will be a pivotal Anyone who watches TV cannot fail to Wikipedia. year for the growing partnership and have noticed the emergence of, for Rose is keen to work with network collaboration between pay-TV and OTT example, a Twitter hashtag at the start of operators and believes there is a big providers, including those offering programmes that range from news and opportunity for them to sell second screen multiscreen services. current affairs to reality shows and the advertising. “It will be a big disruption,” He says the two biggest challenges will latest dramas. predicts Rose,” and a great way for be monetizing multiscreen services and This simple symbol highlights the operators to move customers from live TV determining how best to work with content growing second screen trend in which to their app store.” owners to deliver their content to multiple viewers increasingly use mobile devices to Heynen thinks this model is an option, screens per subscriber. discuss and comment on the show they but believes operators are still trying to Asks Heynen: “Does an operator start are watching on their traditional TV sets. figure out precisely what opportunities paying for content per screen instead of Jeff Heynen of Infonetics Research exist. per subscriber? Will there be options for defines the second screen market as “Some are introducing companion apps mobile-only viewing if you do not want to mobile devices, tablets and PCs whose to complement the pay TV services they have a traditional pay TV service?” primary purpose is to enhance, currently provide. However, these are The coming 12-18 months should complement or even replace the typically offered for free, and don’t do provide some answers, but Heynen warns traditional TV set as the primary video anything more than help subscribers stick that some innovative multiscreen services viewing platform. with the service they already have,” says could get shut down due to breaches of “People are becoming dissatisfied with Heynen. existing regulatory frameworks. ec

eurocomms.com | european communications | 61 CONTENT & SERVICES 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

perators will look in vain for lo- Even if one accepts IE's estimate of a band user base of 822 million raises cation-based services (LBS) to $6 billion LBS market in Europe by 2016, ARPU to just under €21 a year, or less save them from the precipi- it's small beer when you calculate the in- than €2 a month. tous decline in voice revenues crease it brings to ARPU. This also assumes there is no O– the money they are likely to make from Let's take mobile advertising, which change in the relationship between net- LBS may not cover their costs to deliver some see as easy pickings for opera- work operators, Google and other OTT the extra traffic. tors. Advertising agency ZenithOptimedia content providers such as LBS Nizar Assanie, vice president of IE Mar- reckons global ad spend for 2011 was providers, and that net neutrality still ket Research, a firm that specialises in $464 billion, with $72 billion going on rules. But if Cisco's prediction of a four- the location-based sector, says he does- online advertising. It says the internet fold increase to 966 exabytes of IP traf- n’t think that mobile operators will be will drive most new ad spend dollars, fic to be carried in 2015 proves true, "necessarily the major beneficiaries" of making online advertising ($113 billion) operators may have a strong case for a the location enabled search and advertis- second only to television ($216 billion) change in their favour. ing market. in a market worth a total of $535 billion It is unclear whether that change will "The major benefit to operators will be by 2014. be legislated or negotiated. With many increased customer loyalty, and in- That looks positive enough, but networks already congested or offering creased ARPU through greater data con- ZenithOptimedia notes that Google has a incomplete coverage, operators may be sumption by their LBS-enabled 44 percent share of the online advertis- able to win financial concessions from subscribers. Off-network vendors, I think, ing market, and may do better. regulators and commercial partners, pro- will likely be the major beneficiaries in ZenithOptimedia doesn't break out on- vided they are seen to use the money to this space." line media or application. However, com- expand capacity and coverage. In short, that means Google. panies such as Ericsson are abandoning Nevertheless, it is surprising that, with Location-aware applications may be traditional media to enhance their online the exception of GPS car-based satellite reaching the plateau of maturity on the presence. That means spending more on navigation (satnav), the LBS market is so Gartner hype cycle (see pic), but many of PR, events and editorial such as com- underdeveloped. Almost exactly 10 years the technologies needed to extend these pany websites and YouTube videos, ago, two IBM software engineers, Valerie apps into full-blown services, near-field which is Google's domain. Bennett and Andrew Capella, identified communications in particular, are at or Spreading Berg Insight's generous new revenue channels for operators, close to the hype peak. This suggests €17 billion estimate over the 5.2 billion such as tracking of both stationary and that commercial LBSs are two to 10 3G mobile users counted by market re- mobile assets, search, and proximity-trig- years away. searcher Informa means an uplift in gered event delivery. Market researchers show little agree- ARPU of just over €3 a year, even if the For mobile operators, knowing who is ment about the value of the market for operators could claim it all, which they where and when is the essence of terres- LBSs. IE says the global market for GPS can't. Averaging it over the mobile broad- trial mobile telephony, mainly so that navigation and location based mobile they can be billed appropriately. It should services will rise to $15.2 billion by have been natural for them to develop or 2016, with $6 billion coming from Eu- at least lead the development of LBSs. rope (see table). Telcos may find Instead, with some 40 percent of Sweden's Berg Insight suggests the phones already shipping with GPS sup- European market for mobile location- themselves cut off port, terrestrial telcos may find them- based services will grow from €205 mil- from the LBS revenue selves either cut off from the LBS lion in 2010 to €435 million in 2016. revenue stream entirely, thanks to the This is perhaps one-tenth of what IE pre- stream entirely new Ka band satellites, or having to dicts, but they are not quite measuring share revenues with third parties. the same market. “ Fixed operators may be somewhat 62 | european communications | eurocomms.com ” CONTENT & SERVICES

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

eurocomms.com | european communications | 63 BACK PAGE Sun sets on T-Mobile USA sale

Deutsche Telekom and rival AT&T abandoned the proposed sale of the Germany-based operator’s 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?

64 | european communications | eurocomms.com

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