Balance critical to mobile broadband services

The advent of customers purchasing multiple services from one operator is changing the telecoms landscape. The increasing popularity of mobile and fixed service bundles is having the greatest long-term consequences, with issues such as cross-discounting, potential mobile data offload, integrated billing, and true multi-screen content increasingly occupying telco’s planning. However, as fixed and mobile bundle penetration is still relatively low, mobile-centric operators are focusing on multi-device mobile broadband bundles that involve offering multiple SIMs, a SIM plus a dongle, or smartphone/tablet bundle.

 

A large number of multi-SIM launches have occurred in 2011, with 30 operators introducing services in 2Q11 alone. In Spain, Movistar’s combined iPhone/iPad bundle has been successful, while in Finland, Elisa is combining dongle and smartphone access for high-end users.

 

Wi-Fi was high on the agenda at MBW as it is becoming a more prominent element of the mobile broadband product portfolio. Smartphone consumers rather than suppliers have been responsible for the increasing popularity of Wi-Fi, with consumers turning to cheaper and often more reliable Wi-Fi networks for mobile broadband access.

 

Deutsche Telekom’s new wholesale Wi-Fi product, which provides access to 500,000 hotspots and an authentication platform, is aimed at improving and standardizing customer experience. However, the company points out that it is the fragmentation of the Wi-Fi market (with 60% of Wi-Fi connections outside of operator’s control) rather than differing standards that is the major problem for telcos. This raises the question of whether Wi-Fi is an opportunity that telcos are missing out on.

 

O2 UK highlighted two important points on customer insight-led product development at MBW. Firstly, the showcasing of how telcos use or can use customer insight to better shape product and tariff strategies within the telecoms vertical is unusual compared to other industries. The higher uptake in mid-range tariffs that O2 experienced when they shifted to usage-led marketing underlined the importance of effectively linking everyday consumer experiences and usage to broadband speeds and data limits.

 

Secondly, finding the right balance between building value into broadband access and designing and pricing bundles to appeal to major segments is challenging, and requires a strong bridge between product/marketing and network teams. O2 pointed out that it has to be pragmatic and work with the network it has, not the future next-generation assets that it will have.

 

The importance of the brand and marketing value of a first-mover LTE launch was highlighted strongly by operators at MBW. However, this value is generally limited to those within the telecoms industry, investors, and early adopters. 3 Austria’s €1.2bn investment in a network modernization program has paid off through strong subscriber growth and improved EBIT. However, these benefits have just as much to do with improved internal operations, better visibility into traffic patterns, and smarter product and marketing development.

 

Coverage, reliability, and “mainstream” speeds were consistently highlighted as being more important than headline or promised speeds. 3′s network upgrade has resulted in its average download speed increasing from 1.2Mbps to 2.3Mbps and its average upload speed increasing from 300kbps to 700kbps. While these are not considerable increases, they will significantly improve the customer experience of the majority of 3′s customers.

 

While matching supply to demand, ensuring that profitability corresponds with market realities, and keeping a close eye on long-term strategies have always been at the forefront of business management, they continue to be the most important points that operators must adhere to.