CSL fears LTE services will be devalued
Mobile operators need to learn a lesson from the huge disappointment of 3G, and be careful not to devalue their 4G services from the start, the head of marketing at CSL says.
Mark Liversidge yesterday told delegates at the TM Forum's Management World Asia event in Singapore his biggest fear is that the industry will fall into the same trap as with 3G – namely launching new services at the same or lower price than existing services.
Operators were forced to market 3G services on price, due in part to the over-hyped speed and coverage, he said.
As a result, CSL hasn’t rushed to promote its LTE services - launched in December -, which the company says covers half of Hong Kong, but haven’t been promoted by any above-the-line advertising, offers or pricing.
"This isn't because the products aren't ready. They are. Frankly, we're very nervous about our services, which required major capital expenditure, being devalued before [being] given a chance to take off."
Telcos have traditionally struggled to give consumers a strong value proposition that makes them part with additional cash when launching new technologies, he pointed out.
Liversidge also insisted that the technology needs to be invisible. "It's not about the technology and it's not about the network infrastructure. It's about making the interaction between the network and the device as smooth and intuitive as possible."
Devaluing new services and the investments made is a critical area the industry needs to address. "We have done a very effective job of supporting and sustaining the business model of device makers with the subsidy model."
Consumers have been conditioned to expect handsets for free. He urged operators to move away from the subsidy model and base pricing on the fair value of a device.
The biggest challenge for the industry for the next 10 years, he believes, is customer service. "If I'm a provider of 4G broadband service, where does my responsibility end? If users are sourcing content I've never seen, am I responsible for the experience? On the one hand, if you say you're not, then frankly you're just a dumb pipe."
However, he said if you become a smart-enabler, you have the challenge of understanding and controlling the massive volumes of content.
He noted that current business models are 10 years old, dating from a time when there were only candy-bar phones and voice calls, and SMS was exciting.