Customer loyalty anchored on customized service

 The days when the mobile phone was only used for voice calls are rapidly coming to an end in Asia. With 3G starting this year in countries like China, India, Vietnam and Thailand, data services will become just as essential as voice for significant segments of the mobile market and are a major factor in their choice of operator, tariff plans and device.

This is good news for mobile operators, but it also creates some challenges. While billing for traditional voice and text services on a time and distance basis is well understood by customers, things get a little more problematic when it comes to offering high bandwidth services oriented around content.
Mobile operators need far more flexibility and control when it comes to these types of service. Additionally, they also need tools to help them fulfil and successfully manage government initiatives to drastically cut roaming fees such as those introduced in India and Australia.
Customers will always prefer an operator that offers a transparent, consistent relationship with a high degree of personalization and control. Without the ability to manage access to services, content and applications at ever-finer levels of detail, customers face the risk of experiencing the mobile data equivalent of electricity brownouts or suddenly receiving unexpectedly huge bills for content downloads.
At the heart of the problem lies the increasing demand on network and air-path capacity by users that take advantage of the new generations of data-centric devices and services now available. It’s estimated that a smartphone uses around 30 times the bandwidth of an ordinary handset, while a laptop pushes this to a massive 450 times. It’s also expected that mobile data traffic will roughly double each year through to 2012.
According to a Frost & Sullivan report, it’s expected that by 2014 around 47% of Asia’s mobile devices will be internet-capable. By contrast, revenues from voice services remain largely static, pushing mobile data to center stage in any mobile operator’s plans for growth and innovation.
While mobile operators can respond to this by increasing network capacity, this not only takes time and money but also runs up against some inconvenient laws of physics in terms of wireless spectrum capacity. Some Asian operator alliances have introduced flat-rate data roaming fees, but if they impose blanket bandwidth and download limits -- or just offer best-effort connectivity -- they may run the risk of alienating some of their potentially most profitable and high-spending customers with brownout scenarios.
Alternatively, if operators try to throttle back traffic through high tariffs and roaming charges, they’ll alienate customers even more as the newspaper stories already circulating about bill shock and roaming fees totalling tens of thousands of dollars highlight.
The crucial balancing point for matching services, network availability and customer demand lies in the policies applied to each customer’s account. Best effort or throttled-back service is no longer sufficient, especially where the experience of enterprise applications or high-value content is impacted. Similarly, the use of blunt generic pricing policies or caps on service access can have a brutal effect on the customer’s trust and their future spending patterns.
What is really needed is an ability to apply a “smart” policy approach to handle this increasingly complex and sensitive relationship with the required levels of personalization.
First, there must be smart controls in place. This means giving customers access to self-service portals or automated alerts that allow them to send top-up or bandwidth boost requests, change their service packages, get information on their usage and calling patterns, and set individual limits on roaming or downloads.
Second, smart apps describe the increased control of the reality of the customer experience that can be achieved through a far finer granularity of detail. Both the customer and the operator can start to tailor policies to support specific applications – video and music downloads, web browsing and email – while also taking into account the customer’s own real-time behaviors and preferences as well as the wider network conditions at different times or in different places.
Finally, smart caps can provide a more flexible, real-time and customer-friendly approach to the issue of setting bandwidth caps by allowing operators to act appropriately depending on whether they’re facing heavy or abusive users – or customers who inadvertently exceed a set limit by downloading a movie.
In practice, a smart policy control strategy can add an unprecedented richness and flexibility to each mobile operator’s palette of service and billing relationships – and keep the customer feeling that they’re in control of that relationship and the money they are spending. For example, by monitoring a post-paid customer’s behavior over long periods in real time, an operator can readily offer personalized bandwidth limits -- or alternative tariffs – along with appropriate warnings to ensure fair usage or alerts to new service plans.
Also, prepaid customers can be monitored and offered relevant opportunities to upgrade their contracts through a portal as their circumstances change. On top of this, the inherent flexibility of the concept – and its easy integration with standard mobile network architectures – makes managing the charges and service quality parameters for accessing third-party content and applications much easier and more transparent.
David Sharpley is senior vice president at Bridgewater Systems