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| Written by Yves Kammerer, Business Development Director, Lumata |
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
