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Written by Yves Kammerer,
Business Development Director,
Lumata | |
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Research shows that in developed markets, the revenue mix is changing in
line with the evolution of consumer behaviour, and the greatest growth
opportunity will come from mobile handset data. Industry drivers such as
competition, deregulation, and technology advances are forcing
telecommunications companies to reorganise around their customers, expand
markets, and upgrade infrastructure.
For emerging markets, telecoms operators will continue to benefit from the
growth
of mobile penetration and rising GDP per capita that will increase
telecoms service spending. Improved mobile connectivity will also stimulate
usage of data services, but mobile voice will remain predominant (45% share of
total retail revenue in 2017) because fixed infrastructure will continue to be
poor.
Room for data revenue growth does exist within emerging markets as a result
of there being a high number of
un-served customers
representing an untapped opportunity and with a significant
appetite
for mobile data. What is interesting is how this trend is manifesting
itself in the Middle East. The mobile telecoms market in the Middle East
continues to show signs of growth and in particular the increased use of
smartphones and mobile broadband.
According to data from GSMA, overall annual growth in mobile broadband
connections in the region fell from 101% in 2011 to 61% in 2012, but levels of
mobile broadband penetration (as a percentage of total connections) in some
Middle Eastern countries are now eclipsing their Western counterparts.
Furthermore, the region now has
17 LTE networks spread across eight
countries, which provides tremendous growth opportunities for those
operators that can capitalize on being 4G ready and equipped to serve their
consumers (I will come back to this in my next blog).
Turkey was cited as ‘the most advanced market in the region’,
where mobile broadband networks account for 59%, United Arab Emirates (55%) and
Saudi Arabia (54%). In contrast, the average for Southern Europe stands at just
45%, while Western Europe has about half its connections on mobile broadband
networks and in Northern Europe around three in five connections are mobile
broadband.
One identified game changer for operators in the Middle East has to
be to focus on the customer experience. You would assume that in order
to maximise your market share and dominate the competition the logical starting
point would be to ensure a consistently positive experience for your customers.
But with market conditions as complex as they are in the Middle East, this is
harder than you think to navigate.
Senior Telecom Analyst Hasan Sandila, IDC Middle East, Africa, and Turkey,
stresses that because operators in the Middle East are finding it hard to
differentiate their offerings from one another they are likely to focus on
innovation and market diversification (and areas not core to their business).
We believe that putting customer experience management at the heart of this
innovation and diversification is also crucial to future successes.
Gartner sums up customer experience management pretty well
in their definition: “the practice of designing and reacting to customer
interactions to meet or exceed customer expectations and, thus, increase
customer satisfaction, loyalty and advocacy.”
A good example of early signs of this in the Middle East region,
again highlighted by GSMA is from Turk Telecom. On its Q1
2013 Investor Call, the operator’s Chief Marketing Officer Dehsan Erturk stated
that “…mobile data revenue is the backbone of our revenue growth. Data revenue
now constitutes 14% of total service revenues with a (traffic) growth of 55% on
year-over-year basis
thanks to smartphone campaigns and unique internet
packages, addressing different customer segment users, various device types and
data bundles.”
The operator ran 40 separate smartphone marketing campaigns during 2012 and
had 12 smartphones in its portfolio that were exclusive to Avea, including its
own-branded Android handset, the ‘inTouch’. As a result Avea has the highest
level of smartphone penetration in the country with 27% in Q1 2013. On the back
of this, data revenue increased by some 79% annually to hit $348 million in
FY2012-13.
This example clearly demonstrates the beauty of Customer Experience
Management. In this case, segmentation of the customer base coupled with smart
campaign management and a high level of personalisation enabled Avea to
successfully target their customers and increase data usage and revenue.
Another way of enhancing this Customer Experience Management is through
incorporating
Proactive Data Quality Initiatives which provide
compensation to smartphone owners and heavy data users when they experience a
bad quality of service or connection lapses while using data services. Instead,
subscribers may receive extra call time or data back for free. From our
experience, this isn’t a new concept but a very simple and often forgotten way
to acknowledge a problem and enlist brand loyalty from your customers (instead
of causing frustration).
At Lumata, we have also seen how
innovative loyalty programmes
which incorporate gamification and social media elements truly engage
subscribers and drive customer loyalty but at the same time need to be easy to
run and manage by the operator.
To conclude, Customer Experience Management combined with Proactive Data
Quality Initiatives that also integrate customer loyalty programmes is an
incredibly compelling way to attract and retain customers as well as grow
revenue. Due to the complex and competitive market nuisances, this is an area
which operators in the Middle East should pay particular attention to if they
want to lead the charge.
Meet Lumata (Proud sponsor) at Middle East Com, 23-24 September at Sofitel Dubai, The Palm Resort. Visit www.comworldseries.com/me
