 | Issue: | AME 2012 |
| Article no.: | 3 | |
| Topic: | Understanding the user experience is the key to monetising mobile services | |
| Author: | Lyn Cantor | |
| Title: | President | |
| Organisation: | Tektronix Communications | |
| PDF size: | 249KB |
About author
Lyn Cantor is president of Tektronix Communications. He was previously senior vice president and general manager of Visual Network Systems (VNS). Prior to his term with VNS, Mr Cantor had already served as vice president of worldwide sales, service and marketing at Tektronix Communications. Over the course of his 28-year career, of which 14 years have been with Tektronix Communications, Mr Cantor has held various vice president positions in Americas sales, global channels, product management and marketing, in addition to having general manager responsibility.
Tektronix Communications has been working with operators to manage and monetise data traffic since the first 2G and 3G deployments, and is now well placed to support operators’ endeavours to monetize services as they migrate to 4G (LTE). Tektronix Communications provides service providers and equipment manufacturers around the world with network diagnostics and service assurance solutions for fixed, mobile, IP and converged multi-service networks. This comprehensive set of solutions support a range of architectures and applications such as LTE, fixed mobile convergence, IMS, broadband wireless access, WiMAX, VoIP and triple play.
Article abstract
The marketplace in Africa and the Middle East is vibrant, responding fast to trends that predict a sharp risein data traffic and even sharper fall in revenue per gigabyte. The influx of MVNOs and the penetration of smart devices have prompted LTE rollouts in the region, but carriers need to introduce usage-based monitoring and analytics based network management to remain profitable and address the real business needs and social desires. The key is to truly understandcustomers’ needs, just as the web giants did. This can be achieved by analysing their network data, discovering usage patterns and consumer behaviour. Rather than being overrun by OTT, mobile carriers can utilise their knowledge of subscribers’ demographics, spending profiles, lifestyles, preferences and opinions to support innovative services.
Full Article
The demand for mobile broadband continues to grow at a rapid pace. Mobile operators are responding to the growing appetite for wireless applications and OTT services by migrating to LTE and expanding their 3G footprints. However, operators in the Middle East and North Africa now face the dual problem of having to efficiently manage higher mobile data growth while optimising their 2G and 3G networks to provide the staging point for profitable LTE network growth.
The Middle East has initiated a major push towards commercial LTE adoption. In Saudi Arabia there have already been commercial LTE network launches from Zain Saudi, STC, Mobily, and this has been followed by Etisalat in the UAE.
According to a recent report (Jan. 2012) from Analysys Mason, global mobile data traffic is growing at 67 per cent p.a. Conversely, revenue per gigabyte is estimated to fall 82 per cent by 2015. The new market dynamics, shaped by LTE and accelerating on every front, are placing enormous pressures on carriers and operators to adapt their services and drive innovation in order to reduce churn and maximise ARPU (Average Revenue PerUser). Smarter subscribers are ramping up demand for services. To meet this demand in the context of a commercially viable business model, carriers and operators need to become smarter themselves. Many operators, including those in the Middle East and North Africa, are turning to usage-based monitoring and analytics to leverage network data, which delivers valuable insights.
Vision starts with scrutiny
Finding ways and means of driving sustainable revenue from mobile customers is a journey that needs to start by evaluating usage patterns. Rediscovering today’s mobile user helps wireless carriers to understand, and improve, the customer experience. They need to shape trends rather than follow them. In a market saturated with increasingly sophisticated offerings, operators need to catch up with swifts in customer demand in order not to fall behind on revenue. Tools and solutions are available to enable operators to follow user journeys in order to specify new service propositions. Such tools give them the best chance of catching some of the revenue that flows through their pipes and currently ends up on someone else’s plate.
The mobile telecoms industry has been handed a golden opportunity by the social media industry and OTT players, primarily through the increase in mobile data usage. Whilst social media brands like Facebook and Twitter have dominated business headlines around the world, each one of them – and Google falls into the same category – came from humble beginnings. They are now corporate mega-giants, a stature achieved within a startlingly short timeframe. Each one of them has also made a significant contribution to modern culture and lifestyles,changing how people think, behave, assimilate and exchange information, and – above all – communicate. Every one of them came from a vision based on knowing their customers. Their founders understood the needs of their peers and created what seemed to be at the time arrestingly simple ways of addressing those needs.As they devised their solutions, they created new needs and ceaseless demand from ‘comms-savvy’ users.
Enter the telecoms industry, or rather – re-enter, because it’s time for the industry to taker a very close look at what its customers expect from it, and then build the vision on its detailed observations of subscriber behaviours. To put the opportunity in the context of the sheer scale of the wireless market – Facebook’s recent IPO was valued at US$100 billion and the value of the global mobile telecoms industry is estimated at around US$3 trillion.
Global media has cultivated an image of mobile operators being overrun by OTT players, cherry-picking revenue opportunities out of their networks, for free. Yet, with US$3 trillion worth of assets, the mobile industry is in an extremely strong position to harness these new market dynamics and has the right mix of elements in place to spark exponential growth. Mobile operators have access to the richest vein of data that any business in the world could wish for – data that holds the key to prolonged and extensive growth. Understanding what it means is where the scrutiny comes in. Responding to the opportunities it represents, is where vision takes over.
Four key trends
Some of these trends are challenges, while some may be considered opportunities. A strategy of shaping, rather than following, the key trends driving the mobile market at this point in time is not only a survival strategy – it’s the path of least resistance to sustainable business growth through enhanced ARPU. The trends are best identified as:
• Broadband growth
• The increasing complexity of wireless access networks
• Impact of social media
• The proliferation of heterogeneous networks
Broadband growth is the single biggest market force. With the race on to monetise mobile broadband traffic carriers also need to create economies of scale to drive down costs of delivering data. ‘Scrutiny’ in this regard is about collecting intelligence across the network that helps operators to perform predictive analytics- identifying churn candidates, or other usage patterns that may impact the bottom-line. Focused data of this nature enables operators to determine the business model.
The increasing complexity of wireless access networks demands increasing sophistication of centralized troubleshooting solutions to make sure that user demands are continuously met. Interruptions to service have become a thing of the past- users don’t expect them and have no patience or sense of loyalty towards the operators where they might experience them, no matter how infrequent.
The impact of social media isreshaping the concept of customer intimacy. It offers huge revenue potential for carriers whoknow how to create subscriber relationships on the back of it. The basics are in place for carriers – a rich vein of information in the form of network data which includes demographics, value, lifestyle and the opinion of their subscribers.
The proliferation of heterogeneous networks is an area that offers many challenges. Such networks can be complex and costly to run. Increasing complexity places a great challenge on network forensics, making it difficult to analyse and troubleshoot. Service assurance tools and customer experience applications are entrenched in over 100 3G networks worldwide, and for many, will need to make the transition to LTE. Better visibility into the network offers insights into customer usage, QoS and general system performance; revealing innovative ways for carriers and operators to drive revenue. They can leverage OTT traffic to their advantage, understanding different advertising, billing and tieredmodels.
Not all subscribers are created equal
It’s not over until it’s over. The market is by no means mature and neither are its target users. Their needs are growing and evolving almost every time they turn their devices on (and let’s not forget, many of them never turn them off). Whilst the greatest proportion of users will always settle for basic packages with entry-level apps and connectivity, sophisticated users buck the trend, from a provider’s perspective, enticingly profitably.
They will pay for enhanced bandwidth at certain times. They will pay extra for defined social media packages and they will be drawn by offers such as free off-peak call rates. The trick lies in finding out who they are, what they want to do, and what are they willing to pay for.
Segmenting the user base offers a ready springboard for innovation. Professional and business users, whom are often one in the same, have critical requirements of their mobile devices and the applications which serve to heighten their on-the-move capabilities, and keep their competitive edge as sharp as it can be. Social users often regard the use of their devices as equally essential, albeit from a lifestyle perspective rather than as a business tool. They place high value on social interaction and also on easy access to entertainment – a desire which drives the enormous growth in video content.
Some users will never respond to products or services above the very basic. Similarly, some carriers are content to be the passive providers of a dumb pipe. Nonetheless, millions of calls, messages and data sessions are delivered over the world’s mobile networks every day. The pipe is stacked with smart insights whether the operator accesses them or not. It raises the question of‘why not’?
This information is an opportunity waiting to be recognised. It allows operators spanning the globe to build up a wealth of customer information deriving context such as location, demographics, values, lifestyle and even the opinion of their end-users. Operators can now use this ‘customer lifecycle’ data as the foundation for applications and create services for a new breed of subscribers who arewilling to pay for their personalised experience and are willing to respond to initiatives driven through the smart pipe.
It’s a complicated and difficult market landscape, changing almost daily due to the growth in smartphone usage, video and OTT services, not to mention the unpredictable nature of mobile subscribers. With LTE, operators are looking for a network infrastructure that provides them with the capacity they need – to deliver voice, messaging and data to the modern data consumer. Carriers are operationallydependenton network insights to enable the delivery of increasingly innovative solutions that address the increasingly sophisticated demands of their customers. This is a global trend that has been underlined by activity in the Middle East and North African region. This is a vibrant marketplace that has experienced an influx of MVNOs and growth in mobile data traffic that has prompted LTE rollouts in Saudi Arabia and the UAE, with over a further 26 LTE commitments planned in the region.
Capitalizing on the growth of mobile data
As operators migrate to 4G technologies such as LTE, they need to leverage network information from multiple technology domains to drive the growth of the mobile data industry. The more they come to grips with this wealth of data, the more they will be able to develop sustainable business models focused on the personalised and profitable delivery of mobile data. This intelligence helps creating services in direct response to the needs of business users and the desires of social users. It’s a marketing truism that segmenting target audiences, in accordance with their behaviours, enables an organisation to identify usage patterns, anticipate customer needs and then formulate innovative products and services to address those needs. In the case of mobile users, such tried and tested strategies can then assist in increasing ARPU. The story begins and ends with analytics.
