“Tangled” telco market needs to re-think business model

Market challengers, smaller players, regional and international legislation, and constantly connected consumers, are all coming together to create some of the most competitive trading conditions for years in the telco market.

aspect.software.logo_.2014Tim Howling, Head of Telco at Aspect Software, believes that the bigger players may end up ‘tangling’ customers with a complex web of products, services, and a growing number of providers.

Howling suggested that telcos – both mobile operators and fixed line providers – are exposing customer loyalty to threats of easier switching, competitive pricing, and poor customer service. He said: “The insatiable need for global consumers to be connected 24/7 has changed the telco market into a somewhat different beast than it once was, even as much as a decade ago,” said Howling. “Traditional fixed-line providers are now subscription television providers, with broadband packages, mobile device contracts, insurance services, and more.”

According to the Internet Advertising Bureau UK and PwC, more than one in four British consumers now owns a tablet, and Deloitte’s latest figures on smartphone ownership indicate a 72 per cent saturation of the UK population. Ofcom’s last Communications Market Report in 2013 also revealed that the average household spend on telecoms services increased by 1.7 per cent in 2012, and on average, people in the UK spent more than one day per month using the Internet over a mobile network or fixed connection.

“We’ve got niche players quietly slipping into the fold with lower cost offers – even supermarkets are getting involved in the act. The traditional telco business model is under threat, especially since fixed line voice services is decreasing in use, while getting more expensive, and conversely, mobile connectivity is surging,” Howling commented.

Ovum recently said that customer experience is a top priority for telcos in 2014, following years of cost reduction in technology to support customer engagement projects. Howling says the implications for customer service are clear: “In this tangled web, the consumer can bite. Switching is now easier and free by law, and the EU is pushing legislation to scrap roaming charges and cap profits. Add to this the complexity of billing and systems – the most common reason for a customer to engage with their telco provider – and cost and customer service immediately become the two key variables affecting loyalty.”

Howling continued: “All this means that compared to other industries, telcos should have a slightly different objective for its customer service, if they are to compete effectively today. The power behind customer engagement – how, when and why they contact a company – is now with the consumer, and not the provider. As such, established telco powerhouses are feeling pressure from the smaller, and newer, providers that are offering a more targeted customer service.”

Howling recommends that telcos favour speed over personalisation when it comes to customer service to relieve the complexity, and retain customers. He said: “All customers want is a relevant, satisfactory and fast conclusion to their query. The telco also wants a resolution in the least amount of time, with the fewest number of resources. Developments in self-service – which in an omni-channel environment includes social media, SMS, mobile web, instant messaging and mobile applications – will go a long way in making this objective a reality.”

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