 | Issue: | Asia-Pacific 2004 |
| Article no.: | 6 | |
| Topic: | High-Speed Wireless Data – Getting Synchronised | |
| Author: | Jan Abrahamsson | |
| Title: | Regional Managing Principal, Asia-Pacific | |
| Organisation: | Ericsson | |
| PDF size: | 84KB |
About author
Jan Abrahamsson joined Ericsson in January 2004 as Regional Managing Principal for Asia-Pacific, and is based in Singapore and Stockholm. He has 12 years’ experience as a business strategist within the field of wireless telecom, Internet and media. Before joining Ericsson, Mr Abrahamsson was CEO of the international management consulting firm A&Co, a company he founded. Prior to this, Mr Abrahamsson was CEO of Intelligence, and took the company from a local to a global profile in two years. Mr Abrahamsson has also worked for three years as the Executive Vice-President Asia-Pacific for Edgecom, a telecom consulting company focusing mainly on wireless and Internet-oriented companies. Mr Abrahamsson holds degrees in finance, economics, the humanities and journalism.
Article abstract
During this year several major operators will launch their 3G-based services. This means that, in the future, customers will choose their operator based on a desire for new “experiences” – news and information, music and sports, and entertainment. The operator can tailor their 3G strategy for the local market and the individual customer; but, to compete effectively, the operator needs to develop the ability to act as a full-service provider rather than just a simple communications provider.
Full Article
Operators worldwide see a need to differentiate offerings to retain customer loyalty and attract new customers. Many markets in the Asia-Pacific region have high subscriber penetration and have come far with mobile data services. The region’s operators are also technically very advanced. Nonetheless, it is extremely important to develop and launch services in a planned and structured way, considering business, technology, and marketing as key factors for success. During this year we will see the turning of the tide as several major regional and global operators launch their 3G-based services. For many, this has been a long-awaited event, signalling, finally, the appearance of a new area of opportunities for users and operators alike. As the market moves into the high-speed wireless data environment a host of opportunities and challenges emerge. One of the main challenges for the operators of the region will be the task of building competitive advantage in this new environment, while also converting the competitive positions they may have today into a competitive advantage for the future. While the main focus of the operator’s business will continue to be traditional communication services, the sources of competitive advantage will no longer arise from these basic communication services, but from the communication ‘experiences’ they offer to the customer. It must be considered, therefore, that in the future many customers will make their choice of operator based upon which can best satisfy their desire for such “experiences” as news and information, music, sports and entertainment. So, in the never-ending search for competitive advantage, and as the customer’s focus shifts to being ‘experience-led’, the complex decisions of whether, when and how to implement 3G services become more and more important. Depending on the local market, and the chosen overall strategy of the operator, different launch strategies are being deployed in the launch of these 3G services. Still, regardless of the chosen service, some lessons and success factors can be learnt from previous service launches around the world. Learning from Past Mistakes “You must learn from your past mistakes, but not lean on your past successes.” These are the words of the American motivationalist, Dennis Waitley. Although he wasn’t talking about the telecoms industry in particular, his advice is very relevant for operators today. The ability to admit mistakes and learn from them is something that every successful business needs to take on board. For operators who have had unsuccessful service launches in the past, there is no excuse to make the same mistake twice and possibly waste millions of dollars. The old attitude towards bringing a new offering to market, whether it be voice or data services, was one of ‘Launch it and people will come’. At the most, operators would invest in an expensive advertising campaign, often without making sure that the offering was compatible with the most popular handsets, that staff had been trained and, most importantly, that the service was one which customers would actually use and pay for. This type of approach is symptomatic of a young industry, where speed to market and novelty were all-powerful factors. However, this is no longer enough to guarantee success – as proved by the relative failure of early data service launches, where promotion focused on the technology rather than the applications. As more operators enter the market, and the available number of end-user services increases, customers are becoming more selective about what they do and don’t pay for. With this in mind, a new word, synchronisation, has entered the telecoms dictionary. It refers to the coordinated approach between all different aspects of the business, which is necessary to ensure the optimal return on new service launches. Customer Focus Any synchronised approach has to centre on the demands and values of the customer. The fundamental starting place for any service launch is to know, beforehand, that end-users really want and need the proposed service. It is important to play to the personal nature of mobile services by making sure the information supplied will be highly relevant to the individual; this is the key to the success of consumer mobile services. Four other elements must also be addressed, which relate to this focus on the customer. Those four aspects are: business planning; marketing planning and implementation; service development; and channel management. Business Planning Operators need to ask themselves how the new service fits in with their overall business model. Will it open new revenue streams? Is it priced and positioned in line with existing offerings? How will the necessary sales channels be managed? Operators need a clear strategy for the enterprise segment, as well, not just for consumers. Many users in the enterprise segment are willing to use high-speed wireless Internet access as a natural extension of fixed access. Usage levels will be higher and the perceived value will be clearer to the customer. Network Evolution Equally important, once the business strategies are in place, is to ensure that the right technology, in line with the business plan, is selected. What is technically the best, most cost-effective, and practical way to expand network voice and data traffic capacity, as needed, in the years to come, and sustain network performance? How will the launch of new end-user services affect network capacity and quality when introduced in the current network? How can the impact, both in terms of radio network capacity and quality, be mitigated or managed by adapting the existing 2G network to 2.5G and 3G? Operators need to develop a strategic plan for core networks, access networks and network services. An analysis, to evaluate and help understand the implications of different strategic options, is of great importance. Service Development New service offerings have to fit in with existing services, both in terms of pricing and strategic placement. ‘Is this service something that the customer will want?’ remains the central question; but other concerns, such as whether this opens up new revenue streams, and what sales channels will be most effective, must be addressed. Operators need to be able to respond quickly to customer demand for video and music services. They also need to develop effective processes to determine usage levels of video clips and music services, analyse this usage, and follow-up by adjusting the content in accordance with their findings. Meeting demand, and adjusting to trends, quickly provides a competitive advantage. Content will be a key driver of the usage of communication services, so making the right content available can determine an operator’s competitiveness. Processes It is important to have effective cross-departmental processes for service development and launch in place. The challenges faced in 3G environments are different from those of the accustomed GSM value added services. Channel Management Operators are increasingly looking to establish three-way relationships between themselves, the customer, and third-party sales organisations, such as retail stores and other outlets. Managing the flow of information between these three parties is a crucial part of creating the right interface with the customer. Marketing Planning and Implementation The decision about which services to launch, and when, is increasingly being led by marketing rather than technology experts. The options are now limited less by what technology can support than by what the market will sustain. Issues such as integrating the customer, sales channel marketing opportunities, effectively packaging services and driving customer spending now guide operator decisions. Keeping fully abreast of these challenges, not to mention maintaining the ability to meet them all, will test the resources of even the most established operators. Finding and holding on to staff who have led successful service launches in the past is not easily done and is certainly not cheap. One solution is to call on the help of external consultants, who have practical experience of working with a variety of operators, are able to offer advice on best practice and benchmarking and can provide expertise in each of the areas highlighted above. David Wilson, a consulting manager, explains the importance of a synchronised approach. “No operator can afford a failed service launch. If you invest in advertising, but the sales teams doesn’t know what they’re selling, if you develop a service, but it doesn’t fit with your wider business plan, then you will fail. The ability to integrate these four areas, all of which revolve around the customer, will give you a headstart in recovering your investment and going on to profit from new revenue streams.” Measurements of Success To compete in the content and media segment, operators need a new set of key performance indicators, KPIs, similar to those used for traditional services, to measure their business. Such KPIs include time-to-market in days and hours, weekly service revenue targets, ability to respond 24/7, as well as others, for effective benchmarking. Certainly, although many operators are familiar with the concept and the importance of synchronisation, few understand the full extent of its application. Operators can minimise risk and maximise profitability by drawing upon the experience of others; and learn, not just from their own successes, but also from best practice and successes of others.
