Smart meter, smart grid, smart home. Everything in the future is going to be a whole lot cleverer than today it seems. And, of course, with all this smartitude comes connectivity. Cue CSPs rubbing their hands together at the thought of all that lovely M2M traffic to fill their networks up in offpeak periods.

The problem is, at least in the utilities market, there is an enormous gulf in understanding between utilities and what they need and want, and how many CSPs are addressing these needs. After the fanfare trumpeting the opportunities, reality sets in. This is when uncomfortable facts appear that shows that supporting the utilities market is not going to be as simple as many believe.

In fact CSPs face a range of challenges to fully exploiting this market. Yet the rewards of addressing it well are enormous. So let’s pay a little more attention to what the customer, and their end customers, need and want. Let’s think a little harder about what we can offer. When we do this we soon realise that the opportunity is actually different, wider and deeper to what we first thought.

In our new paper on this topic, we outline some of the challenges facing CSPs seeking to support the emerging needs of the utilities sector, and explain the wide range of opportunities available to those who can dream bigger dreams. These opportunities come from four main areas:

1. Helping utilities cope with changes in the utilities market.
2. Supporting utilities as they implement new technological advances that are both mandated and desirable.
3. Enabling utilities to transform their commercial approach.
4. Providing services to help transform the customer experience provided by utilities to their own customers.

M2M is a part of the second of these opportunities. Even M2M is a different opportunity in the utilities market to that touted. It is not simply low-cost traffic sent overnight. Utilities require hardcast SLAs, QoS guarantees, frequent updates at their convenience and more. They are not looking for “cheapest possible cost”, they’re looking for the right solution to their challenges. And just as important as M2M communications services are the flipside of these: the requirement to provide insight, advice and information to customers.

Communications services though are just the tip of the iceberg. Utilities also need customer support and billing services, in addition to a range of other services that together are set to transform the utility experience. CSPs are well positioned to deliver these, if only they can get the sand out of their eyes and see the whole picture and not just part of it.

For more information see our infographic below. The paper on which this is based can be downloaded for free, courtesy of MDS, from here: Four Key Challenges for Utilities – Four Key Opportunities for CSPs.

Full-sized  infographic as a PDF

Woman in small shop Ghana (Photo credit: World Bank Photo Collection)

If you read the telco press and examine many of the offers out there, you’d be forgiven for thinking that all customers were consumers (and arguably a very small number of consumer archetypes). Ah but then some CSPs have services that are specifically designed for business customers. Upon closer examination, however, you will discover that these offers are intended for large enterprise customers, which have enormously complex accounts, buy substantial numbers of services, handsets, lines and so on, and have specific requirements that necessitate tailoring of the offer.

Both of these sectors are enormously important, of course. But as CSPs struggle to compete with one another to maintain the lion’s share of each of these sectors, according to their business strategy, a third sector has largely been overlooked. This is the SME (small and medium-sized enterprises) sector, also called the SMB (small and medium-sized business) sector and the MSME (micro, small and medium-sized enterprise) sector. This set of customers is still enormously underserved in terms of products and tariffs, often falling between the consumer sector on the one hand and the enterprise sector on the other. When we spoke to CSPs in our latest research programme, they readily admitted this was the case. We interviewed 50 operators worldwide about their views on SMEs and every single one said this sector was a growth opportunity – 72% said it represented a significant growth opportunity. This is unprecedented in the modern telecoms market.

So why is the SME sector the “undiscovered country” of telecoms? Partly this is due to old-fashioned thinking that lumps all enterprises together as “business customers”. As such, individual SMEs were seen as insignificant opportunities compared to huge corporate accounts. CSPs simply didn’t understand or know how to address the opportunity the SME sector held. This 1990s mindset has no place in the modern world, and yet a surprising number of people still can’t seem to get their heads around the difference between an SME and an enterprise in terms of their needs, telco opportunities and strategies for supporting.

Profitably exploiting the huge potential of the SME market requires a different mindset and approach. This is a classic “long-tail” opportunity. It is a volume market like consumer, but SMEs want and need different different things to consumers in terms of products, tariffs and so on. This market has a high level of heterogeneity and requires offers to be tailored to different types of SME. However, this cannot be done in the laborious way in which we meet the needs of enterprises, because it simply isn’t sustainable and there isn’t sufficient margin. The key to unlocking the potential of SMEs is verticalisation – that is, packaging offers and products to meet the needs of specific vertical markets – and self-configuration. SMEs often don’t have IT departments or specialist IT personnel, so they are open to buying many IT services on a SaaS or managed service basis. This is a classic value-adding opportunity that CSPs are well positioned to exploit.

Frankly, you’re either a “cup half full” person or a “cup half empty” one, and in telco-land we have far too many of the latter variety. I’m getting rather weary of all the complaining. We may not be able to “party like it’s 1999″ but, to be honest, in 2012 that looks like “embarrasing dad dancing” anyway.

It’s time to stop bemoaning the loss of the old telco country and go west to find a new land of opportunities. To prosper in the new telco economy, you first need to get your head out of the 90s. Then you need to learn about the size of this opportunity, how SMB opportunities vary by vertical market, size and by region, and how you can start making revenues out of them today.

To find out more about one of the hottest topics in telco today, see our infographic below, and order a free copy of the new issues paper that outlines strategies CSPs can use to open up the market by emailing editorial@telesperience.com.

VOSS’s Christopher May looks at opportunities for CSPs in the enterprise and SME markets, and reminds them what needs to be done to support UC services.

I got the feeling that there was someone trying to communicate with me via smoke signals. (Photo credit: Wikipedia)

The collaboration market is an exciting place to be right now.

There are some mind-blowing unified communication (UC) applications and services being launched, which are grabbing everyone’s attention, because they make us think about the great advantages that collaboration might bring. Solutions such as bring your own device (BYOD) and bring your own application (BYOA) will revolutionize enterprise communications, as will the latest HD desktop video systems.  And we are just starting to see enterprise social media taking form.

For service providers, the race is on to be first to market with the most innovative and appealing bundles of cloud collaboration services. Their challenge being to deliver these cloud services in a model that best suits the end user; be it hosted UC, managed UC, or a hybrid mix of hosted and on-premise (private cloud).

The interesting part – well interesting for me! – is why it’s taking these companies so long to realise that integrated management technology is key to unlocking the benefits that enterprise collaboration can bring. There are discussion groups and forums around the globe extolling the virtues of management: the savings it can offer, the simplicity it can bring to a UC environment, the competitive edge it can give a company.

But still, companies nearly always wait for the pain to be felt, before they consider investing in it.

Love ‘em or hate ‘em, it’s a bit like Manchester United…except replace the glory boys up front (I’m thinking of Rooney and in the past, Ronaldo) with the shiny new collaboration services that are wowing the market. These guys wouldn’t be nearly so effective if they didn’t have the workhorses (the likes of Paul Scholes) in the centre of the pitch, supporting their every move. These – dare I say – slightly dull but reliable folk are engines of the team; who work tirelessly to distribute the ball, for the good of the game. That’s what fulfilment management does. It’s not particularly sexy; it doesn’t really grab its fair share of headlines; but without it, things just aren’t as effective as they could be.

As Zeus Kerravala from ZK Research put it; “Management and analytic tools are needed to help make decisions on who to give what tool to, why, and what the payback will be.”

Which leads me on to my next point: collaboration is complex. And not just in terms of the need to manage multiple vendor products, operating across multiple network infrastructure elements, and internetworking with multiple layers of the network (aggregation, application and local gateway). Complex in terms of who should get access to which suite of collaboration services. Companies won’t want to give all collaboration tools to all employees – that would be a massive waste of money. So we need to be able to not only manage multiple user profiles (e.g. basic worker, knowledge worker, mobile worker, etc.), but also track consumption and utilisation of collaboration tools and services, to understand which department should pay for what.

Again it is the dull, reliable, fulfilment platform that provides the tools to manage services and easily allocate user profiles that automatically trigger the activation of the correct services to the appropriate employees, all in real-time.  And the fulfilment platform also feeds the correct service inventory data to the cost-accounting system to perform the telecom expense management.

Beach, Dominican republic (Photo credit: Wikipedia)

We like our bells and whistles in the mobile market. We like our innovation to be technically complex – pushing the boundaries of what’s possible. Innovation in technology markets is all about new technology and science  – right?

There’s not doubt that pushing technical boundaries can result in innovation and we need this to happen; but it’s also true that much so-called innovation is ineffective. The skeletons of ineffective innovation litter the mobile landscape. You can argue that innovation means taking risks, and failures are inevitable. But how do you increase the chances of your innovation being successful rather than ending up as roadkill.

I believe that the cause of much ineffective innovation in telecoms is because we get carried away by technology. In fact we do this to such an extent that unless there is something technically difficult we can showcase, we hear grumbles that it’s not truly innovative.

Well that, I have to say, depends entirely on your perspective. Are you innovating to impress other technologists? Or are you innovating to create value and profits by meeting people’s needs.

Scattered around the industry are excellent examples of successful innovation that might not be at the cutting edge of technology, but is robust, well-designed, meets an unmet need and is popular with customers. Let me give you a good example of this. Today I was told, yet again, that SMS is dying. More or less at the same time an email popped into my in-box telling me about  what Viva in the Dominican Republic is doing. The company has tripled access to mobile internet services at a stroke using technology from ForgetMeNot Software.

The new service, vSocial, enables Viva’s subscribers to send and receive internet messaging using any mobile phone. It will provide every Viva customer with access to internet-free apps that offer easy to use, affordable social networking, email and online chat with friends, family, staff, suppliers and customers without having to invest in new technology, handsets or infrastructure. The trick is to use some clever tech, along with SMS and USSD, to convert Facebook actions and updates, emails and messages from chat services such asWindows Live Messenger and GTalk, which means subscribers do not need mobile internet contracts or high end smartphones, and neither do they need to download any software.

So what? I hear you say. After all, if you’re reading this story then you can probably do all of this already. But stand outside your little world for a minute, and think about the experience of subscribers in other regions.

Internet subscriptions in the Dominican Republic, for example, are extremely low in comparison to  demand for them. Nearly 40% of the country’s inhabitants have access to the internet, of which 2.2 million are on Facebook (over 40% of total internet subscribers). There are 90 mobile subscriptions to every 100 people, but only 2.4% have a mobile internet subscription. The Viva deployment instantly triples that figure, by transforming even the most basic featurephones into a virtual smartphone.

Paul Roberts, Director of ForgetMeNot Software, said: “Investors should be looking to mobile markets in Latin America as opportunities for both profit and philanthropy. The internet-free mobile app environment provides the opportunity to change the relationship that mobile subscribers in Latin America and across the world have with their phones, regardless of the make or model of the handsets. The awareness of, and demand for, mobile apps and services is a worldwide phenomenon, but almost all app development has focused on the relatively small minority of mobile subscribers in developed markets who have smartphones and data access. ForgetMeNot Software has adapted the app business model to focus on the 3 billion mobile subscribers around the world who do not typically have the advantage of widespread internet and data access.”

This type of innovation actually adheres to one of the cardinal rules of successful innovation. The innovator understands what people are doing and what they want to do, and has found a way of delivering against their needs. They have done it cleverly without the requirement for disruptive innovation. They kept the innovation real. This doesn’t guarantee success, because other elements are required for effective innovation, but it’s certainly a great first step.

Watch Paul Roberts talking about the mobile market in the Dominican Republic.

A Chinese buffet restaurant in the United States of America (Photo credit: Wikipedia)

Welcome to our café. Firstly, we’re going to bust some myths about the mobile business. Next we’re going to give you some recipes that will help keep your hungry diners – sorry we mean customers – happy. And there’s some entertainment in the mix too (just not video, because we all know that is evil!).

Join Teresa and Seth at their café to hear about What Video Optimization Vendors Are Not Telling You.

Coins from Bosnia, Slovenia, Hungary, Denmark, UK... Magyar: érmék (Photo credit: Wikipedia)

We often discuss the failure of CSPs to maximise their revenue-generating opportunities and bemoan the systems and processes that prevent them from doing so. However, this is starting from the wrong place. Systems and processes are supposed to enable revenue maximisation strategies, they cannot create a revenue maximisation strategy.

The truth is that revenue maximisation starts with a CEO who has a vision of what he wants his business to be, and who values his customers – seeing them as his primary business asset. Not networks, not IT, and not even all the lovely data. This is such a simple truth that it is so often completely overlooked. So let me repeat it: the primary business asset we have is our customers, their loyalty and goodwill, our relationship with them, and our knowledge of what they want, and their value to our businesses. Revenue maximisation starts at the very top of the CSP and it is wholly dependent on creating a successful customer experience.

The most common mistake made by traditional CSPs is to focus on technology, rather than customers. Many have now recognised this mistake, but sadly are doomed to fall into another trap – that of being overly concerned with the shareholders rather than their customers. It is not that shareholders are not important, it’s just that if they are the primary focus then don’t expect the business to be dynamic, fast-growing or exciting any time soon. In fact if CSPs really focus on their customers and deliver against their needs, and also create value for other stakeholders – such as employees – then shareholder value will be enhanced far more.

“Despite all the change swirling around any successful business, some things appear to remain constant for relatively long periods of time. Foremost is that business needs people to make it function, and people inevitably leave their mark upon it.” The End of Shareholder Value: Corporations at the Crossroads by Allan A. Kennedy

There are businesses who exist soley to maintain a steady performance – smooth quarter on quarter results are achieved by delaying investment, eschewing risks and sacking valuable staff in order to keep the “numbers” on target. Some of these businesses are dead for a long time before anyone realises, and when they do realise there’s a problem it’s far too late to breathe life back into them. The situation is compounded by stock-based incentive compensation programmes for C Level executives, which aligns the self-interest of management and shareholders.

Contrary to many reports you have read, not all CSPs out there are dying, decaying or zombie businesses. Their future is not inevitably to be a bit pipe while someone else claims the lion’s share of the business value.

However, if they’re to find a lucrative place in the value chain – and there is more than one spot for those that can pull together the right strategy – then changes need to be made not just at the bottom, in the networks and IT infrastructure, but also at the top and within the business.

It’s simply not necessary for the CEO or C Level executives of a telco to have worked as a network engineer or to have been in the telecoms domain for the last 25 years. In fact, we need more executives that have fresh eyes and fresh ideas. Such executives can clearly see the telco USPs, and strategise how to exploit these to best effect. They can communicate this strategy, which translates in to an articulate systems strategy that engineers and IT staff can deliver against.

Maximising revenues is easy: it’s about meeting the needs of customers and staying relevant to them. It’s about building a long-term relationship with those customers and adding value to their lives. We just make it difficult because we approach it in the wrong way.

We think it’s difficult to deliver because of our legacy infrastructure. In fact, harder than changing our infrastructure is changing our mindset and overcoming deeply entrenched beliefs, values, experiences, behaviours and interests that are now no longer aligned with our goals. A common frustration I hear from IT staff is failure of the business to clearly articulate what is expected from them. In contrast, the very best businesses I see today have a clear vision of what they’re trying to achieve, and strategies that join together to deliver against that business vision. They have an organisational commitment to their customers that comes from the very top. And, ultimately, these businesses are far more likely to deliver long-term value to their investors.

Stephen J. Kobrin, a Wharton management professor, makes an important distinction here. He says that many businesses are “customer friendly” without being “customer centric”.  The difference between these two is that customer-centric companies understand customers so that they can identify which ones are valuable, where there are unmet needs, and where their revenue is going to come from. In other words, “customer friendly” implies treating all customers the same; in contrast, by really understanding customers you can begin to figure out what their needs are, and you can prioritise whose needs you meet according to their value or potential value to you.  Customer-centric does not mean treating everyone the same. Of course, what it does require is the ability to deliver different products, tariffs and service levels to different kinds of customers. And that requires a flexible infrastructure that supports advanced targeting and personalisation.

Get your complimentary copy of ‘Seven CSP Strategies for Revenue Optimisation’, sponsored by Orga Systems, or the accompanying datasheet ‘Revenue Maximisation Trends 2012-14′ by emailing editorial@telesperience.com.

(Photo credit: Wikipedia)

There’s no denying that M2M is a growth market with huge potential. At the start of this year, ABI Research predicted that the market for cumulative cellular M2M connections will rise from about 110 million connections in 2011 to around 365 million connections by 2016. This represents an annual growth rate of roughly 27% by 2016, which will translate to about $35 billion in connectivity services revenue.

And the market is reacting to this growth: by the end of 2011, most of the major European, American and Asia-Pacific operators had established M2M business units in order to focus their activity in the market. Machina Research predicts that a clear top tier of operator alliances will emerge in 2012, which will enable operators to implement a global footprint through a network of affiliations.

Yet there is still a huge amount to do to ensure that the back-end services and support systems are in place for operators (and the other players in the M2M value chain) to make the most of this potential. To keep up with growth, the billing industry is trying to address M2M billing issues to help the operators make the most of the opportunities. In most cases, however, they are not hitting the mark.

One of the things to consider is that M2M will probably be a low-margin business: M2M is, after all, about driving down costs and automating as much of the activity as possible. While the costs of the activity need to be low for the M2M providers, operators also need to keep their costs low – and that includes billing. From a BSS perspective, machine-to-machine billing needs to be dealt with in a different way.

Operators need to be able to offer new deals, services and price models quickly and easily to keep pace with the requirements and innovation within the M2M sector and to ensure that, in this fiercely competitive sector, customers can be won because they’re able to respond quickly and with flexibility to their needs. More than ever, billing needs to happen at the speed of marketing.

The flexibility of the back-end systems is a vital component of the growth of M2M. Billing is one of the most important back-office components; but traditionally billing systems are complex to maintain and costly to alter. If they employ the traditional billing approach, operators will struggle to be as flexible as they need in the M2M field, in order to be able to take advantage of all the opportunities out there.

The cloud may offer a solution. It can help not only the M2M providers, but also all the partner services that are required to allow M2M to flourish. A range of different billing platforms that take advantage of the benefits of the cloud needs to be offered to both telecoms operators and M2M providers to provide a more flexible solution with a much lower total cost of ownership.

The smarter the back office is, the more pricing options and flexibility the service provider gets. M2M pricing will have to evolve from a fixed price to a mixture of flexible and bespoke tariffs and, in addition, operators will need to introduce tiered pricing because some M2M verticals will be more data-hungry than others.

The billing industry has to step up to the plate to help M2M grow as both an industry and also a revenue stream for operators. New systems need to be employed and, possibly even new pricing models; but the opportunities are there if we as a billing sector reach out and grab them.

For more information about FTS checkout their website.

The war for our digital future has been raging for some time and battles have been won and battles have been lost.

Like other wars, there are many issues and many protagonists. Was World War I – or as we are now supposed to call it by EU diktat, the First European Civil War – about the nascent German state flexing its muscles or the final demise of the great Austro-Hungarian Empire, or perhaps the death rattle of the Ottoman Empire? When you listen to the arguments in the digital war, it’s also difficult to understand exactly what’s going on, who’s right and who’s wrong.

In the digital war, the old guard are the fixed internet providers, which see it as their birthright to maintain their status.

A brick wall (Photo credit: Wikipedia)

But then along came the OTTs: the likes of Google, Apple, Facebook and Amazon. They look at things from a different perspective: what does the customer need, rather than what can technology provide? Each OTT is creating a separate ‘walled garden’ providing all the digital services any customer could want – and locking them in as part of the process. The world wide web of open content and services is outside and the OTTs are intent that the infrastructure providers, fixed and mobile, remain purely as providers of infrastructure and little else.

The telecoms operators, seeing their core revenues at risk, and eager for larger slices of the more lucrative service layer, have fought strongly in every battle. The last couple of months have seen a number of high-profile bomb-blasts.

First of all Facebook announced their $1 billion purchase of Instagram – just 13 people strong and with no revenue, yet still said to be a very canny purchase. Its photo-sharing technology extends Facebook into the mobile world, it addresses a seemingly insatiable need for its users to share almost everything, and it removes at a stroke a tasty morsel from the eyes of competitors like Google. The mobile operators’ original vision of MMS being the ideal technology for photo-sharing looks positively antediluvian and very much technology led.

Next came Telefonica Digital with its announcement of a strategic tie-up with the mobile division of Electronic Arts, allowing special promotions on a wide range of mobile games. While others already have similar alliances with EA, this ensures that TEF customers worldwide are not left behind. TEF Digital is an interesting concept in itself, as it is putting together a portfolio of digital offerings for TEF operators worldwide (and therefore O2 and Movistar) to select from. In the past it has been notoriously difficult for central organisations to bond with local affiliates to provide offerings ripe for their individual markets. However, they’ve got some good people involved in this, so let’s see.

Then came the news of the European Mobile Wallet. Wallet services are already up and running in some markets, notably across the pond (aka North America), but also in developing countries like Kenya where banks are not prevalent and the mobile wallet is the first widespread payments infrastructure in the country, oiling the whole Kenyan economy. The Kenyan mobile wallet, directly holding credit, looks very different to existing and future wallets in the developed world, which have links to customers’ existing credit cards and bank accounts.

In Europe, EE, O2 and Vodafone announced last summer that they wanted to set up a joint venture for wallet services using the UK as the launch market. The operators were wise to take lessons from established banks, realising that they cannot go it alone. Can you imagine a customer of Barclays or HSBC only being able to make payments to customers of the same bank? Long ago the banks set up national and international clearing houses and the mobile operators are now looking to do something similar.

The aim is to provide a single common mobile wallet infrastructure available to banks, retailers and mobile customers. Initial intentions were for a highly visible ‘big bang’ launch at the London Olympics in line with other new technologies being showcased at the event.

Alas, the big operators did not silence the opposition and have been taken to task at the EU level. Google, who hope to launch their own European offering, have lodged an objection, as have Hutchison 3G (who were not invited to be part of the initiative). The stated fears of the EU’s Competition Commissioner are that the planned joint venture would stifle competition and innovation from others. They say: “we need to make sure that competing services can keep emerging on this market, so that incentives to innovate remain”.

While there are vested interests on both sides, each has valid non-commercial arguments as well. Tie something down too early and innovation is stifled. However, without a critical mass, any single organisation’s wallet offering would struggle to take-off with markets remaining fragmented.

Whatever the EU decides, and they are allowed up to August 27^th to make their ruling, the offering will now miss the opportunity of a ‘big bang’ launch at Olympics 2012. This gives time for others, Google included, to hone their own offerings.

As in all wars, many of us are innocent bystanders, but the outcome of each and every battle affects millions of individuals across the globe. This tension between openess and competition on the one hand, and a standard platform for innovation on the other, is set to replay I suspect many times. What customers want versus what regulators think they should have, versus commercial interests, is a very interesting intersect in the digital war.

Broken laptop computer (Photo credit: Wikipedia)

One of the fundamental requirements for consumer choice and true competition is that the consumer is able to switch service providers in order to choose the product that best meets their needs. In the telecoms market the ability to switch provider has been mandated and facilitated by regulators. In the UK Broadband Market one of the ways in which Ofcom has sought to facilitate this is the use of a MAC code.

The Migration Authorization Code (MAC) is a 17- to 19-character unique identifier code that is generated by the actual telecommunication provider (in the UK this is usually BT), which identifies the local loop (telephone line) to be switched, and authorises the provider to switch the customer to the new ISP.

The MAC code reduces the time taken to migrate service provider from 17 days to cease an asset and 7–10 days to provide a new order without a code, to 3–10 days with a code.

This is the second time that I have personally changed ISP. The previous time our household moved from BT to Sky in a completely uneventful manner. In contrast, this migration was from Sky back to BT (in the form of Plusnet, a wholly-owned BT business). The migration was little short of a nightmare and highlighted key lessons for all ISPs and CSPs.

Why did we move broadband service provider?

Firstly our decision to churn should be a lesson to all service providers. It was not based on cost at all, but on the quality of service being provided by Sky. Originally Sky had offered us completely free broadband as part of our TV service, but after a couple of years Sky asked us to move to a paid package on the basis that in one month we had gone over their arbitrary limit. Note that our average usage wasn’t over the limit, but the agenda was to move customers to a paid-for subscription. I didn’t have a problem with this, since I expect to pay for what I use. What I had a problem with was that as a paying customer my quality of service was worse than it had been before I started paying.

My guess was that Sky were attracting more and more customers to their free offer, which in turn reduced the speeds for all.  Whatever Sky claims, all I can say is that from my own experience, speeds most definitely ceased to be satisfactory. In fact they were so unsatisfactory they caused us to test our broadband speed at various intevals and we discovered they were slow compared to what other ISPs could offer us. This experience was recently  backed up by a survey conducted by The Guardian newspaper, which found a 60% gap between the speed promised by Sky and that acutally delivered.

Since we were already paying for the service and we were out of contract, there was no barrier to us churning. At no time in the previous several years had Sky made any attempt to build loyalty with us, nor when we rang them to ask for a MAC code did they try and convince us to stay. As one of their paying customers it was logical to assume they would want to retain us, but once we informed them we intended to move to Plusnet they did not even try and retain us.

The hell of moving broadband provider

Notably, when we asked for a MAC code, Sky told us we “didn’t need one”. This concerned us, since we knew that since 2007 they should provide one when requested. What we didn’t know – and no one at any point informed us – was that where the line is unbundled (a term which the average customer has little hope of understanding) there are potentially serious problems with the process. We have subsequently discovered that some ISPs who are LLU providers say they cannot issue MAC codes to go back to the BT Wholesale network. This is not true, BT can accept MAC codes from LLU providers for customers switching back to BT. The advice, we now realise, is to persist but again this is something that the average customer cannot and shouldn’t have to deal with.

The next thing that happened was that our new ISP (Plusnet) rang us to inform us that Sky had issued a cease order on our line which was prior to the date at which they could provide service. This arbitrary date had been decided by the Sky CSR on the basis of their billing period – ie what suited them. Plusnet advised us to ring Sky and get the cease order lifted because “reconnection” by BT would cost us £50. This we did. (We note, however, that the cost of reconnection is frankly outrageous in this day and age.)

On the day we were due to move over our entire line went dead. We had no homephone, no dialtone and no broadband. Having dealt with a less than co-operative Sky we now had to deal with Plusnet, but we were confident this would be okay – after all they had won customer service awards galore.

The first issue I had with them was that this situation was a crisis for us, yet they didn’t know or seem to care. After nine hours without service we had to ring them and wait in a queue for 20 minutes to talk to a CSR. When I explained patiently what the problem was, the CSR replied he simply didn’t know what was wrong. At this point I explained that I needed the broadband service back up and running for my business. Rather than see this as an urgent requirement to get the problem fixed (and maybe even upsell me to a higher level of SLA), he proceeded to tell me – a brand new customer who had not spoken to the company before – that I was in the wrong. I had broken their terms and conditions, he said, by having a consumer account rather than a business account and working from home. I pointed out that I had spoken to one of their salespeople, had explained my needs (including enquiring about their home worker plans) and she had suggested the plan we were now on, with an option to upgrade if necessary later on.

As a customer what irritated me the most was how Plusnet believed that the way to start a relationship with a customer and build value for themselves was to offend a customer in a crisis. Rather than an accusation, a suggestion to move to a more suitable package once they had actually provided a service would have been welcome, and a more effective way of building a relationship.

At this point we were told that we had to wait – in total we suffered seven days without broadband, a horrendous experience for an always-connected family. The only bright spot was that Three UK had kindly sent us a MiFi – a wireless broadband router – to evaluate for a story I intended to write on mobile broadband. Taking the opportunity to try it in earnest I can honestly say we were all impressed. Apart from some signal variance within the building, the speed the MiFi provided actually seemed faster than that we had received from Sky. The only real negative thing I have to say about MiFi is that the pricing plans are limited and none of them was appealing to me. Unless I had been in crisis I would have been loath to cut the cord; having tried it in earnest I honestly believe it is a viable alternative to fixed broadband for some customers and, importantly, something all homeworkers and SMEs should have in their bottom drawer.

Learning points for CSPs

I believe that moving broadband provider should never, ever be as unpleasant as I experienced. When I move mobile provider, it is not. In fact, my experience of moving away from T-Mobile was so pleasant that I have continued to think fondly of them and would seriously consider reconnecting at a future date. In contrast, I will never, ever use Sky broadband again, and will move from Plusnet as soon as the contract period is up.

• Learning point number 1: how you deal with customers at the end of their lifecycle is critical for your brand, and for any hope of a future relationship with the departing customer. Just because they choose to move to another CSP now, does not mean they would not spend money with you in future – unless of course you muck up this opportunity by the way you handle them at this critical last touchpoint.
• Learning point number 2: CSPs should never ever blame a customer for being on the wrong package. If they are on the “wrong” package or tariff then why is this? How much revenue are you making out of them? Are they profitable? If they’d actually be better off on a different package then you should be upselling them, not blaming them. This is all basic sales 101, but something we’re still getting wrong too often if the experience of me, my friends, relatives and business network is anything to go by.
• Learning point number 3: there are few useful SME and home-working tariffs available in the UK, and I suspect in many other markets. I was accused of using a lighter weight consumer tariff when I should  be on a business tariff. However, to me as a customer these distinctions were not meaningful. In terms of actual usage I am a pretty average consumer. I would argue that many consumers use far more data than I do even if you combine my business usage and my home usage. This is simply because I use little video or other high-bandwidth services. It is no good arbitrarily dividing customers according to some internally-defined categorisation, if the offers you have for them don’t meet their actual needs.
• Learning point number 4: an apology and some small form of compensation would have meant a lot to me – neither were forthcoming.

Learning points for customers

Broadband is now such an important part of our lives that you seriously need to consider what would happen if you were without it. I would heartily recommend you investigate mobile solutions like MiFi, at the very least as a back up. But, more importantly, you need to develop a contingency plan, because broadband can and does go down.

Inflating the balloon (Photo credit: Wikipedia)

Historically, CSPs managed their revenues by ensuring that all sums owed were charged for and paid, and that revenue leaks and fraud were minimised. All of these processes are still very important, and increasingly CSPs are bringing them closer together to ensure their effectiveness. However, simply defending the revenues owed is still old-world thinking. In future, communications service providers (CSPs) will increasingly have to maximise their revenue opportunities in order to remain competitive and relevant.

To many outside telecoms this might seem obvious – isn’t this what retailers already do, after all? But in telecoms this requires a big change in attitude, organisation, processes and systems. Many of you might say that we are already adept at marketing new products. The question is not whether we can rollout new products and tariffs but how easily, how quickly, and how cost-effectively. Furthermore, we must ask whether we are using insight gleaned from all the data sets we have to ensure that new products and prices are what customers actually want and are continually aligned to changing consumer need. In other words, we don’t just need to innovate, we need to innovate effectively.

The cost of not innovating

One of the problems we face is that telecoms executives are trained to assess the cost of innovation – although sometimes they still get that wrong – but not to assess the cost of missed opportunities if the company does not innovate. This latter cost includes lost potential revenue, but also lost customers tempted away by the more appealing products or price plans of rivals, lost market positioning, as well as brand damage when customers begin to perceive the CSP to be less innovative.

At Telesperience we have given advice to CSPs in terms of products or plans they could launch to appeal to their target customers. Sometimes the CSP has failed to secure the necessary investment to rollout the new initiative, only to see a rival rollout a very similar offer a year or two later. Eventually, the board recognised the loss of market position and funds became available to launch a similar offer. However, by then the CSP had lost the first-mover advantage and playing catch up proved to be expensive in more ways than one.  When the original decision was made not to fund the initiative, the CFO had been nervous about investing but had made the mistake of not factoring in the cost of not innovating.

In the end this mistake was costly because rivals stole market share and mindshare, and valuable brand equity was damaged. The CSP had to pay out more money than would originally have been required (in order to shorten the time to market) without getting the full benefit of first mover advantage, because by then it was a “me-too” response.

In contrast, another CSP we worked with was able to fund their innovation out of the extra revenue it made from successfully getting a disruptive innovation to market early. They could precisely measure the revenue they made between the earlier go-live date and the planned go-live date, and this alone more than paid for the entire investment that had been needed.

 How to innovate

This brings us to the question of how we maximise our revenues by maximising our opportunities. In telecoms this means bringing the management of revenues closer to the generation of revenues. By which I mean, the marketing department has to be more closely linked to what goes on in operational departments like BSS and OSS. In our recent study of revenue maximisation trends, 91% of the service providers we spoke to said that the ability to create realtime offers was key to maximising their revenues. They acknowledge that marketing was playing an increasingly important role, and is now just as likely to be involved in, or responsible for, revenue maximisation as finance. However, 72% also said that marketing departments cannot easily access the information they need to maximise revenue generating opportunities, which impedes their ability to innovate effectively.

To maximise opportunities, marketers need to ensure that the products and offers they rollout are relevant to, and appealing to, their target customers. In telecoms this is often not the case. This is because we employ inside-out innovation, where we design products and plans to suit our own needs, rather than ouside-in innovation where we understand and deliver against the evolving needs of our customers. As I have said, innovating is not enough; the innovation has to also be effective, meaning it has to appeal to our customers.

From the customer’s point of view, they expect the telecoms experience to be realtime and they don’t want non-realtime processes disrupting their experience. This means CSPs must be able to charge, react, provide and detect in realtime in order to maximise the commercial opportunities presented.

If you’d like to find out more about what CSPs tell us they are doing, or intend to do, to maximise their revenues, then you can download the free data sheet which summarises all the research findings (registration required). And watch out for the issues paper that will outline strategies CSPs can use to maximise their revenues (available in May).

Resources: Telesperience Datasheet: CSP revenue maximisation trends 2012-14