Once was the time that if you wanted a new mobile device you went to your mobile operator. When it came to delivering a consistent user experience this made things relatively simple. Your device had been through your operator’s testing process, it was likely configured for their services and when it came to support, their care agents knew how to resolve any problems.
But times have changed. Although still the biggest retail channel for mobile devices, operators no longer have such a monopoly. WDSGlobal estimates that on some European networks, the percentage of non-portfolio devices (those not official ranged and sold by the operator) is as high as 35%. This includes SIM-unlocked devices migrated from other networks, foreign imports and second-hand devices passed between friends and family or purchased through online auction sites.
It’s a trend that is set to continue with the dramatic rise of connected devices coming to market and the unbundling of the device from a mobile subscription. The wave of new tablet devices, e-readers and netbooks, not to mention connected home appliances such as TVs, fridges and cameras, means that operators will soon see a much wider breadth of devices attaching to their networks. In many cases, the operator won’t have sold the device, just the data access.
This represents something of a dilemma for the mobile operator. Many non-portfolio devices that churn onto a network do so without the settings necessary for them to connect to more advanced data services. Often, these devices are limited to basic voice and messaging because the operator’s network and support systems simply don’t recognize it. In fact, many impose a blanket refusal to support users with non-portfolio handsets, on the basis that it breaches the service contract or internal process.
But shouldn’t operators be welcoming, even encouraging consumers to bring their own equipment onto the network? After all, it’s a device that they haven’t had to subsidize.
Many operators already struggle to manage the growing army of non-portfolio devices. This manifests itself in three main ways: the problem of actually recognizing the device make and model; the problem of remotely configuring it for operator services; and finally and perhaps most significantly, the lack of device knowledge within the contact center makes resolving support issues a difficult and expensive process.
The first point of failure is typically the operators’ own device management deployments, designed to detect and identify new arrivals on the network and automatically provision them with the appropriate settings. These systems often aren’t optimized to identify much more than the officially ranged portfolio. The same is true for internal care and support operations. These rely on a library of device knowledge to diagnose and resolve customer issues. If that knowledge doesn’t exist then the device is returned to the network without a fix.
At worst, the new wave of non-portfolio devices churning between networks remains limited to low-margin voice and messaging services. At best, significant cost is added as the support operation looks to resolve the problem using inadequate support tools. As an additional consequence, CRM and customer experience management (CEM) systems can quickly become outdated, resulting in poorly targeted marketing campaigns. For example, promoting a service not supported by the non-portfolio device or incorrect configuration instructions being pushed to the device.
Opportunity for operators
The cost of acquiring new subscribers is on the rise, thanks largely to the increase in device subsidies that operators need to apply to the devices they sell (the average subsidy applied to a smartphone is $200). These costs have an enormous impact on profitability, in some cases delaying the break-even point on a subscriber to over 12 months.
Encouraging consumers to bring their own equipment onto the network is an obvious way to reduce this break-even point and improve subscriber profitability. However without adequate device knowledge, any margin advantage will just be eaten away by longer, more complex and more costly support interactions.
It’s a balancing act, but one that seems inevitable. Mobile operators will be looking to protect their value and position in an increasingly fragmented market, and an ability to deliver consistent user experience and support options across a wider base of connected, non-portfolio devices may become the key loyalty driver.
Tim Deluca-Smith is VP of WDSGlobal