Telecom executives can be as clueless as a guy who think it is attractive to wear a Bluetooth headset on a date. According to a new telecom industry survey conducted by IBM, industry execs know that change is coming but they cannot bring themselves to discard their old ways. A full 69 percent “expect business model transformation to be the primary source of value over the next five years.” Yet when asked where their priorities lie, they are, in order:
Network coverage (52 percent)
Customer reach (45 percent)
Customer knowledge (22 percent)
Customer service (16 percent)
Ease of use (11 percent)
Device control/management (8 percent)
Those numbers should be reversed. Network coverage and reach are still important, but that is how telecom companies beat their rivals in the last century. In this century, they are going to have to do better than that. Personalized services, consumer control, and ease of use will win the day.
I guess it should not come as any surprise that telecom executives (both traditional and mobile) do not put the customer first, but knowing more about their customers and what those customers want should be a priority for more than 22 percent of them. And for all the talk of open networks and open devices, the fact is that only eight percent think they should give customers more control over their communications devices. They will eventually learn that such control is no longer theirs to give.
And the knee-jerk response of 58 percent of them on how to exploit emerging advertising revenues. Partner with Google or Yahoo. Here’s a clue for any telecom manager reading this: Google and Yahoo have yet to figure out how to fully exploit mobile or voice ads themselves, so they might not be able to help you out.
(Photo by FamilyofFun)
hahaha..what a dork. telecom execs are exactly that, they could care less about user experience and personalization. that is for their underlings to deal with.
execs in a lot of these behemoths are more focused on meeting the qtrly numbers and ’strategic objectives’ (ie, how can i fatten my already bloated comp package moving forward).
As a telecom professional it is obvious that we need to focus on the customer more and to allow for more personalization and openness. By doing this effectively we would be able to grow our business as well as the overall ecosystem. That said, if those survey numbers are to be reversed and if network coverage is to be relegated to third or fourth priority, exactly how is it that those customers we are getting to know better will get service? And if network coverage is not as important in this century, why is the 700 Mhz spectrum auction so important? Why is Google getting involved if network coverage was last century’s competitive advantage? I think you have part of the answer Erick but network coverage is as important as it ever was as a competitive advantage and a key asset to growing the business value for shareholders.
Probably 80% of most companies management are clueless. Most success is simply being in the right place at the right time. Wasn’t it Woody Allen who said “Eighty percent of success is showing up”?
Plenty of clueless “execs” at Helio and they don’t even own the network! LOL!
I love the picture–it just stands out and maybe people look ridiculous with their Bluetooth on in other places too. And yes, a lot of companies are still proprietary of their technologies, even with all this talk about open source floating around.
The telecom industry is full of players who have the old fixed line mentality, where nobody wants to be the first mover.
Only tried and tested (by someone else) new innovations are getting a foot in the telcos’ door.
It’s understandable to some degree, however, especially after the MASSIVE mis-investments into 3G licenses in Europe.
After that (circa 2002-3), the telcos have been much more careful on what they do, in my opinion.
Haa!!!
I love seeing those chach guys wearing a bluetooth at lunch. So funny!
Nice post/topic Erick. Telecom companies need to get their act together. There is no excuse for the US to be years behind Japan in mobile trends. I am tired of paying for text messages when they should be free, and billing needs to be more straight forward.
Erick, telco managers might indeed be clueless. However, I do not think that a very conservative strategy focussing on network coverage and customer service is necessarily stupid. Many ventures of telcos into value added services (e.g. portals, music downloads etc) have failed. Maybe, customers simply want them to be dumb pipe providers (well, I do). If that is the case, why not give the customers what they want? (Sure, the extra big margins will become thinner)
Michael
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http://viibee.com, online dating is fun again
Well, they should care! IMHO, here’s what they are missing!
There are basically 6 major revenue streams of mobile operators today and they are all in pretty bad shape…
1. National voice: Flat rates, bucket pricing and competition already brought down prices per minute between 50-70% in Europe.
2. International voice. The likes of Skype, Jaxtr, EQO (insert favorite VoIP player here) are already killing voice prices for international calling rates by offering pure over-IP voice (Skype) or by using local calls and connect them over IP (EQO). And if these startups don’t change the world or regulators will!
3. Messaging follows voice. Too bad that you included a lot of free SMS into your voice plans (subjecting them to price war) and that you failed to make MMS fly. Seriously, does anyone think that iPhone lacks MMS capability? Finally, mail – even after 10 years of WAP and smartphones there is still no easy way to pop your private mail in the mobile (Blackberry/iPhone aside) and if you even consider getting your job mail you will be swamped in configuration hell and having to argue with your IT department for the right to do your job.
4. Value Added Services (VAS). Off course mobile operators have seen their voice & messaging revenues decline for the last years and they thought that VAS was going to save the day. Problem is that only a few operators, like 3, iMode and a few others, have been able to boost real revenue in this area. They have about 15% of total customer revenue. Most European operators are hovering around 5%. VAS will not save the day and Internet services going mobile is more likely to win over mobile operator portals (walled gardens).
5. Data. Finally here a product that seems to be taking off! The guy in heaven has answered operator prayers. Yes, flat rate 3G/HSPA data plans are really selling well! But this is only partly good news because there are 2 major problems. First, how can it take 10 years to understand what customers have been saying all along and what ISPs figured out years ago? Flatrate is the key to growth! Not listening to customers should be mandatory in any business. Second, once you go flat rate you also go utility. If you say 9.99, I say 9.95. Data access will in a competitive world be low margin.
6. Advertising. Operators are using this as they used VAS 10 years ago (it will save the day) but I have yet to see anyone making real dollars from mobile advertising. The basic problem is that mobile operators do not know their customers that well and they do not offer reach (both key to advertisers). Prepaid customers are basically unknown in demography and most operators never have more market share than 30-40% at most.
So, in summary – mobile operators revenue streams are all ranging from bad to worse. But the even bigger problem is that no one actually likes mobile operators. They have been sitting on a product (voice) that everybody had to have and they have been exploiting that need. Now, when customers have a choice they simply prefer not to do business with the operator if they can avoid it. It is very hard to get a premium from someone who is just not that into you! Compare that with Apple, Harley Davidsson or BMW who all offer premuim priced products that people prefer (and are willing to pay for).
I would have to agree with this, but only when it comes to telcom CEO’s!
Network coverage is a HUGE issue once your out of the major metros.
There’s no worse user experience than a great handset with no bars of service.
I think the poster has this wrong.
Network Coverage should be #1 on the list. It’s a huge issue, because sure they might design tons of great services and devices – but if I can’t make a damn call then I won’t be a customer.
It’s bad enough that AT&T has those annoying commercials about their service working anywhere, anywhere except my house and office that is!
Does more device control/management quickly impacts and increases revenue? No. It actually raises the expenses and decreases the bottomline of the telco.
“Google and Yahoo have yet to figure out how to fully exploit mobile or voice ads themselves, so they might not be able to help you out.” — Are there any other alternatives? This is the reason why they don’t put control management at the top of the list.
It doesn’t matter what you think, as long as all other Telcos are in the same page then that secures them.
Erick you moron, if there’s no network coverage you can shove up your phone
Great article, nemrut is dead on, Sean your brainwashed. As an ex industry employee in senior mgt. Sales build the network, customer support is second.