Home Asia-Pacific II 2014 Driving growth for CSPs in the digital marketplace

Driving growth for CSPs in the digital marketplace

by Administrator
Stavros VougasIssue:Asia-Pacific II 2014
Article no.:3
Topic:Driving growth for CSPs in the digital marketplace
Author:Stavros Vougas
Title:Vice President MEA & APAC
Organisation:Tecnotree
PDF size:225KB

About author

Currently the regional VP for MEA & APAC at Tecnotree, Stavros Vougas has 23 years of professional experience in the ITC market, with the last 14 years in the Middle East & Africa region and since 2013 in the Asia Pacific.
Previous to joining Tecnotree in 2012, Stavros worked in various multinational companies in the Telco and IT industry in senior Regional Management and Sales and Business development roles. Stavros has extensive experience in different vendor companies ranging from IT infrastructure, radio and network equipment and system integrators as well as software vendors for the Telco industry. An Aerospace Engineer by trade, he moved early in the commercial operations and business development roles where he served a number of US and European multinationals throughout his career.

Article abstract

In this changing marketplace business as usual isn’t any more a viable strategy. As we move further and fur¬ther into the open digital economy, communication service providers (CSPs) need to revise their approach to managing customer experience. Essentially, this means establishing infrastructure that can support automated per¬sonalised service bundles and subscriptions.

Full Article

As the telecommunications industry becomes even more competitive, communication service providers (CSP) are finding they’re struggling to find paths to profitable growth. Paying close attention to the direction of the market, having the agility to capitalise on new growth segments and finding ways to retain long-term relationships with users, are all key to business performance in this industry.

Advancements in network capabilities have revolutionised the possibilities for digital businesses. Increased network speeds and reliability means that internet services and applications are being enabled, and new possibilities realised. In the penetrated market it is no longer enough to focus only on customer acquisition or simple reactive churn management initiatives to grow, as often the costs of acquiring and supporting new customers are barely cov¬ered by low ARPUs collected. We need to remember that change is pretty much the only constant element we have had in the communications industry over the past decade. Today we are moving way beyond voice, data, music, games and movies into a world where everything that can be digital will be digital. And that transition changes the service demand and creates new revenue opportunities for innovative CSPs.

In this changing marketplace business as usual isn’t any more a viable strategy. As we move further and fur¬ther into the open digital economy, CSPs also need to revise their approach to managing customer experience. In fact, these new digital services are expected from users.. With some internet services proving more expensive for CSPs to facilitate, such as content streaming, these services need to be packaged, priced and charged for in a way that will be beneficial for both the CSP and consumer. To provide an excellent customer experience, and to do it efficiently, CSPs need to re-orient their systems and processes to support more integrated product/offer management with the order creation and order execution processes. Essentially, this means establishing infrastructure that can support automated per¬sonalised service bundles and subscriptions.
Create bundles to drive profitability
The typical way of creating multi-play bundles has been trying to address all different needs of sub¬scribers with a few all-inclusive bundles. CSPs have been trying to keep up with the competition by adding more and more services to the more or less statically priced bundles. Despite that bundle expansion might present good value for the sub¬scriber, it is not clear whether the subscribers actu¬ally appreciate this value.
It is essential to understand that a service the sub¬scriber has access to but does not know about, rep¬resents no value to the subscriber but may repre¬sent a significant cost to the CSP. In order to put the value back to the bundled service packages and to boost profitability, CSPs should start offering each subscriber a personalised service experience. Subscrib¬ers should be able to build individual packages not only consisting of voice and data services but also, for instance, of their preferred music, video and cloud services delivered and bundled by the CSP.
By allowing the subscribers to create their personal bundles from the available offerings, the CSP makes it clear that subscribers are only expected to pay for what they really value. In reality, though, the selection needs to be moderated against uncontrolled cherry picking to ensure the entire service set remains prof¬itable. In a world of too much selection, subscribers have been proven to appreciate ‘editorial choice’ over a fully free reign over services consumed. Therefore, by intelligently pre-packaging the available services into small ‘mini-bundles’ the CSP can ensure a balanced selection both in terms of end user options and sound business sense.
Launch new services more rapidly
As the new digital products and services are evolving rapidly, it is essential to keep the service offering up-to-date and attractive. Most of the service portfolio changes of a CSP will be minor changes to the existing products. Typically, the existing service portfolio is enhanced with new allowances and promotions in order to cre¬ate new flavours of services already available. Or existing products are bundled together with new items like smartphones. For example a new LTE enabled tablet is bundled with exiting 4G mobile broadband access products.
An ideal tool for automating and speeding up these service portfolio changes is a unified overlay system that consolidates all product and service information into a unified, metadata-based information manage¬ment repository, comprising of a commercial product and customer information in conjunction with tech¬nical service and resource data. The architecture of such a system creates a clear separation between the underlying assets, bundles and offers and provides feature-rich tools to create dynamic offerings targeted to different customer segments by using a wide variety of criteria.
Enable personalised subscriptions
The value proposition of a CSP can be made more attractive by offering subscribers the freedom to choose the services they want in a personalised subscription and by offering flexible payment options. Subscribers may resist subscribing to certain services if they feel that the value proposition is not right for them. Take for example a cable TV service which includes 200 TV channels costing 50 USD a month. If sub¬scribers can select 20 of their favourite channels, out of the available 200 channels, and pay only 30 USD a month as part of an individualised subscription, the subscribers are more likely to sign up for the service.
The subscriber will view this relationship as purely transactional, desiring to choose the elements they want, when they want them. To ensure the provider can capitalise on this behaviour, empower the subscriber to create personalised subscriptions, allow the operator to cross-sell their own and 3rd party services in a cost-effective manner, thereby resulting in increased revenue, customer loyalty and stickiness.
Building customer loyalty
Ensuring you’re providing the digital services users demand is crucial. However, in this new digital marketplace, CSPs also need to focus on continuous customer relationship building and long-term reten¬tion strategies. And on customer lifetime value, which by definition is a prediction of the net profit attributed to the entire future relationship with a customer. For example, in a narrow or lean margin business, Average Margin per User (AMPU) is actually a better indicator of operator success than ARPU, as losing $1 profit may require $10 extra revenue to bring the budget back to 100%. Essentially, business focus should be on developing and enhancing engagement with customers throughout their lifecycle in order to boost customer lifetime value.
Providing customers with a rapid and meaningful response to their everyday service needs provides an obvi¬ous opportunity to differentiate in an environment increasingly seeing cost-cutting leading to degraded service levels. But managing customer expectations in such scenarios is not only a difficult business chal¬lenge as it also requires a highly flexible infrastructure to cater the needs.
Empower with self-service
Customer self-service, whether involving a teenager with smartphone subscription or major corporate account with cloud services, is becoming a must-have for all type of service providers. For a CSP, self-ser¬vice offers the opportunity to lower operating expenses, boost revenues through personalised offering and to increase customer satisfaction and loyalty. And for customers, self-service can offer enhanced service control and greater convenience through 24/7 availability without queuing to talk with call centre agent.
According to a report by Analysys Mason , a well-executed self-service strategy can reduce the cost of cus¬tomer care by as much as 20%. At the same time, the focus of most CSPs is moving towards offering a com¬pelling customer experience and more and more personalisation of the service offering. As the same report is quoting as much as 18% higher Average Revenue Per User (ARPU) for active self-care users, it is no won¬der CSPs are jumping on board the self- service bandwagon.
An effective self-service strategy will indeed reduce the customer-care cost, but if implemented in isolation it has the potential to deteriorate overall user experience and damage the CSP’s customer base instead. Per¬sonalised and simple self-service, carefully integrated to an overall multi-channel customer service strategy, is the winning combination for the CSP of the future.
The technological pace of change can be a challenge for businesses, with growing competition and attractive offers forcing the behaviour of users to change. Smart and agile CSPs will capitalise on this demand though, integrating new digital service offerings into personalised bundles that support both customer loyalty management, and allow the provider to profit from an increasingly savvy, digital user-base.

Related Articles

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More