 | Issue: | Asia-Pacific II 2006 |
| Article no.: | 4 | |
| Topic: | Mobile device management and personalised services | |
| Author: | Paul Cuss | |
| Title: | CEO | |
| Organisation: | SmartTrust | |
| PDF size: | 60KB |
About author
Paul Cuss is the CEO of SmartTrust. He was previously vice president of the CRM division of Amdocs in EMEA, a provider of customer care and billing solutions to the service provider industry. Mr Cuss joined Amdocs with the divestiture of the Clarify CRM business from Nortel Networks in a number of increasingly responsible positions including the as President of eBusiness solutions, EMEA. Prior to that Mr. Cuss held various international positions at Nortel, amongst others as Vice President of Global Accounts. Paul Cuss has an MBA from Henley Management College in the UK.
Article abstract
Mobile operators depend upon new services to maintain their existing users, attract new ones and build their revenues. Adding new services, however, requires re-configuring the user’s handset settings, but few users manage to re-configure these settings without help. The cost to the operator of either re-configuring the handset, or not selling the service, is high. Mobile device management, MDM, detects the user’s handset remotely and reconfigures it over the air, improving the user experience, maximising operator revenues and cutting operator cost.
Full Article
A number of mobile operators around the world have, over the past six months, been running trials, or even launching, a wide variety of personalised services such as, for example, mobile TV. Overall, consumer reaction has been positive and many in the mobile industry believe that TV offers enormous revenue potential based solely on the fact that the combination of two of the most popular consumer pastimes – mobile usage and TV viewing – is a perfect marriage. However, mobile TV also serves to highlight one of the key challenges facing today’s mobile operators as they look to fulfil the appetite of content-hungry consumers. Certainly, the more advanced mobile technologies become the more revenue can potentially be earned from the user; at the same time, the technology becomes more complicated to manage and therefore more costly to support. In certain circumstances, this can have the undesirable effect of cancelling out a large percentage of any profit increases. It is a fine line, and juggling profit margins has become a daily routine for many in the industry. Keeping it simple Much of the complexity involved in the current generation of mobile services is centred on handset configuration. From simple SMS, short message service, and voicemail retrieval through to advanced multimedia services and content downloads, mobile services require the management of certain handset parameters. Failed connections often result from poorly managed settings and research suggests that an average of 18 per cent of consumers around the world have experienced MMS, multimedia message service, failure due to poor handset configuration – making poorly managed settings one of the most common barriers to data usage. The result, at best, is a call to customer care to resolve the issue. At worst, the consumer simply chooses not to try again and limits his mobile usage to familiar and friendly voices. Either way, revenue has been lost and the operator’s brand-name damaged. A short Internet search of user forums highlights the challenge. Users trying to access a particular European operator’s mobile TV service experienced multiple connection errors that barred their ability to watch streamed content. Time-outs, incorrect default WAP/GPRS profiles and firmware issues were all presenting barriers to consumers. The service in question costs US$8 per month, but the profit from this was almost certainly wiped out the minute the consumer contacted customer care to resolve the issue. Most operators have seen a rise in customer traffic, but this rise has been in direct proportion to the increasing complexity and diversification of mobile handset and service technology. Evidence from mature mobile markets suggests that up to 10 per cent of all calls, at a cost of approximately US$10-15 per call, to customer care relate to device management issues. So the argument comes around full circle – how do you ensure subscribers can access services quickly and efficiently and how do you minimize the potential increase in traffic to customercare centres? The answer lies in MDM. The phrase mobile device management, which has become something of a buzzword in the industry over the past year, refers to the collective ability to manage the user experience – from handset configuration to the continued support and maintenance of the handset – remotely, using over-the-air technologies. A watershed year for mobile device management In mobility, change and innovation are the norm. Today’s mobile markets are characterized by a constant stream of new devices, migration between network generations and the development of new applications. However, consumers do not want any of this complexity to be visible to them. When a new handset is released, a consumer wants the best in functionality, but almost certainly does not want to know about any of the background processes that need to take place, such as number portability or MMS access. To the man on the street, configuring the new device is the responsibility of the mobile operator and if it is not done effectively, the subscriber’s expectations will never be met. Any early user of WAP in the Nineties will remember the experience of manually entering the service configuration into the handset, often following lengthy instructions from the operator’s website. Today’s plug and play consumers expect more and demand out-of-the-box functionality. Initial attempts to overcome the problem by pre-configuring the handset shortly after its manufacture went part of the way, but the process was static. Once the consumer left the point of sale there were few means by which to update his subscription and service settings to reflect changes like the launch of a new service, such as mobile TV. In addition, many of today’s consumers do not obtain their mobile equipment from the operator. Some equipment is second-hand or simply purchased from third parties. In most cases, these handsets contain outdated or incorrect settings. For the operator, these devices are invisible, their capabilities and configuration histories unknown. The chance of the subscriber actively contacting customer care to resolve the issue is limited, leaving that consumer confined to low margin voice and SMS services only. Such factors are the very reason that operators around the world are now looking for ways to extend their reach into the network, to manage continually the device and ensure its optimisation over the air. Most people in the industry define mobile device management not as a single technology, but as a process. MDM comprises three key layers of technology. The first is an over-the-air server through which the operator can communicate with the device remotely. The second layer consists of an intelligence layer that combines detailed repositories of handset and subscriber data. The final applications layer consists of the services that apply actual changes, and update the handset’s configuration to meet the requirements of each specific type of usage. Typically, an MDM solution may combine several applications such as handset configuration, firmware and feature updates, and remote diagnostics. All of these applications are based upon the same core platform and most take advantage of the ability of MDM to detect and probe remotely handsets that are active on the network. The principle business driver for MDM developers, today, remains handset configuration. Using the processes described above, the operator can automatically detect a new handset entering the network and assess its capabilities – does it support WAP, does it have a camera, can it use MMS? – and the relevant settings automatically pushed down to the handset. The process automates what was once a manual process and ensures that all handsets – no matter what their origin – are correctly set to benefit from all available, and applicable, operator services. Meeting operator demands for profitability Since MDM contributes to financial success on so many levels, it has achieved strong operator acceptance. There is, of course, the obvious – ensuring a handset is correctly configured and functioning correctly means subscribers are more likely to generate data revenue. Only when you dig deeper into the current business model adopted by many major operators around the world, however, do you begin to see the importance. Research last year from Informa Telecoms & Media stated that 2006 will be a ‘watershed’ year as mobile phone operators change their strategies in response to a number of major threats. These include high subscriber acquisition costs, a higher churn – the rate at which customers change networks – and falling prices. The company said the unsustainability of the traditional operator business model will become more apparent in 2006 as operators come under more pressure as a result of higher churn rates, price erosion and high subscriber acquisition costs. There is no alchemy involved in this simple equation and operators around the world have made significant steps in trying to reduce their SAC, subscriber acquisition costs, in a bid to squeeze more profit out of stagnant ARPU, average revenues per user. It is no secret that many would like to remove handset subsidies from their business model altogether. Certainly, Belgium, Finland, Italy and South Korea have all placed restrictions on subsidising handsets. Although research has shown that in Korea the removal of handset subsidies did not affect the profitability of the market – over a quarter of Korean consumers spent over US$490 for their current handset – others are not convinced. The widely held theory is that consumers have become accustomed to cheap handsets and will baulk at the idea of swallowing huge price increases. So operators are faced with a mountain to climb before they even breakeven on a subscriber. In many cases, the breakeven point will not even occur until the closing months of the first year, at which point the subscriber is at risk of churning. Ultimately, using MDM to ensure wider data service uptake, and achieve lower customer care interactions, means that the breakeven point can be reached a good deal sooner.
