For Wireless Carriers, “Customer-centricity” is the key to unlocking Potential and Profits

Contextual Perspective:

In March 1876, Alexander Graham Bell, using a liquid transmitter, spoke the following sentence “Mr. Watson – Come here – I want to see you“; Mr. Watson, listening at the receiving end in an adjoining room, heard the words clearly.  Bell’s invention heralded a communication revolution that steadily transformed the Social, Industrial and Economic well-being of humans. During the first century of its existence, the Telecom industry’s Operating model remained relatively simple. Operators remained vertically integrated, owning all the assets (networks, switches etc.), and conducted all their business operations (Order Management, Billing etc.) internally. Their core service offering was Voice, augmented by a range of features (Caller ID, Forwarding etc.). Eventually, advances in Technology (Wireless, Wired, Cable, Satellite etc.) have dramatically disrupted the industry’s business model. Today, Heterogeneous Networks (that are increasingly converging) enable Customers with “seamless mobility” i.e. the ability to have ‘anytime, anywhere, always’ access to Services and Applications on a range of Devices.

The Telecom Industry’s Eco-System:

All the components in the eco-system (listed above) profoundly affect Customer Experience, some more than the others. Over the years, centrifugal forces such as device-loyalty and app-mania have steadily eroded brand-loyalty away from Wireless Carriers.  Consequently, the Carriers have been reduced to enablers of value-added services, as opposed to the providers of “real” value. In fact, at the recently concluded CTIA, the CEOs of the 4 major Wireless Carriers expressed some serious concerns. While Sprint raised issues about the lack of “industry reputation, customer trust and subscriber brand loyalty”, Verizon focused on the need for “additional spectrum” for customers with data-enabled services, since the demand for data would exceed capacity by 2014. T-Mobile wants to extend the rollout of 4G LTE network, with the objective of making 4G services “affordable” while AT&T wants to make the customers’ “quality of life” better by focusing on how they use mobility.

Carriers have an unprecedented need to re-establish their value-proposition with their customers. In their ascent to leadership, they need to focus on the fundamentals that matter most to customers, primarily Network Availability and Service.

Some of the key initiatives that Carriers should focus on include:

• Network Leadership – The Network has been, and continues to be the lifeline for customers. Convergence amongst different types of Networks (Wired, Wireless, Satellite, Cable etc.) is profoundly affecting customers’ experience. For example, a customer engaged in a Video Conference on the handset (running on a wireless 4G network) can drive home and continue her session from the same handset as it seamlessly switches over to her personal WiFi network. She could then transfer the same session onto her HDTV, powered by an FTTH (Fiber-To-The-Home) network. Customers expect the Quality of Service to be very high even as their willingness to spend for extra byte of data is on the decline.

Carriers enable this functionality (branded as Triple-Play or Quad-Play) either by owning their networks or developing arrangements with partners. The ingenuity lies in developing an Operating Model with which they can outsmart competitors by focusing on the Network’s aspects of Reliability, Presence, Availability, Scalability (including support for burstable traffic) etc. The Network can and must be a source of their distinctive competence.

• Culture of Customer-centricity – The CEO and the Executive team must relentlessly ensure that all the performance objectives/metrics of the organization are aligned towards supporting customer-centric values and behaviors. While allowing for superior leadership and performance management to thrive, leaders at levels must take steps to make superior customer experience “real” and “tangible”.
• Customer Experience to be at or above that of the Retail industry – Although 80+% of the surveyed customers claim to be ‘Satisfied or Very satisfied’ by their Carriers’ services, the Wireless industry lags behind the rest of the Retail industry. For instance, a customer cannot redeem an internet-based coupon at a retail store or order a purchase online to be picked up at the retail store. Carrier must massively overhaul their internal operations, from Warehouse and Inventory management to incentivizing retail sales associates.
• Offer Customizable packages for Business Customers – Balance the ability to Customize Product/Service offerings with the need for scalability. Invest in back-office systems and IT applications that can easily scale to meet the growing needs of customers (ex: Data services).
• Humanize the brand – Run a concerted campaign to distinguish the brand from competition; translate the network’s superiority into aspects that customers value such as least-dropped calls, streaming video at low costs on high-speed networks etc.

To conclude, the intangible benefits of endearing their brands to the customers transcend beyond the quantifiable benefits. As their relative brand premium increases, Carriers can confidently negotiate better deals with the other stakeholders (including device manufacturers, equipment vendors etc.). These activities would further improve their profits and margins.