By Amit Sanyal, AVP & Joint Head, Consumer Value Solutions Business, Mahindra Comviva
Without a doubt, the rapid growth in the global telecommunications space seems perfect on paper. Sample this: according to data released by GSMA Intelligence, the total number of mobile connections (including machine-to-machine) stood at 7.75 billion worldwide while the number of unique mobile subscribers stood at 3.82 billion, both as of the first quarter of 2016. Meanwhile, the revenue for financial year 2014 stood at a staggering $1.06 trillion, a 1.99 per cent year-on-year growth.
That, in a nutshell, represents an overall extremely rosy picture. Now, let’s examine a few parameters more closely, beginning with a trend that has reared its head somewhat recently and thrown the old order into a tizzy. I allude to the number of SIM cards per unique subscriber, which has been growing steadily every quarter. As per GSMA Intelligence, in the fourth quarter of 2014, each unique subscriber across the world had 1.80 SIM cards. This number fell to 1.79 from the first to the fourth quarter of 2015, to reach 1.80 once again in the first quarter of 2016. Going forward, the firm has predicted that this number will remain steady, at least until the second quarter of this year. Thereafter, it is expected to rise to 1.81 in the third quarter and will remain the same till the fourth quarter of 2017. In fact, it is expected to remain at this number beyond this period as well.
Next, let us look at the minutes of usage (MoUs) per connection worldwide. This parameter has shown an interesting, if somewhat skewed trend. It stood at 287 in the fourth quarter of 2014, then marginally dropped to 286 in the first quarter of 2015, and then spiked to 292 in the second quarter of 2015. The ARPU per subscriber displayed similar attributes. It stood at $20.25 in the fourth quarter of 2014 and then continued to decline marginally. In the first quarter of 2015, it fell to $19.76, rose somewhat to $19.95 in the second quarter of 2015 and then reached $19.98 in the third quarter. Then came the fall – to $19.82 in the fourth quarter of 2015 and to $19.58 in the first quarter of 2016. Finally, churn rates, an operator’s biggest nightmare perhaps. Although GSMA Intelligence remains relatively tight-lipped on the subject, it has mentioned that churn rates stood at 3.22 per cent in the fourth quarter of 2014. After that the number would be roughly in the same range.
The idea behind this data deluge was not to provide a ready reckoner of the global telecom sector, but to point out that the telecom space is a bit of a paradox. Why I stated that the sector is performing well on paper is that while there is little doubt that operators are raking it in, let us not ignore the fact that parameters like SIM usage, ARPU, MoUs and churn rates have a different, and perhaps less pleasant, story to tell.
The very existence of the multiple SIM card trend, for instance, is testimony to this. Industry experts agree that the prime motivation for using multiple SIM cards is to take advantage of inherent price differentials across competing operators in domestic cellular and roaming scenarios. This trend is most prevalent in emerging markets, where customers are more price sensitive.
The bottom line that operators should sit up and take notice of is that a customer may be registered on their network but may not be using their services at all. In other words, an operator may have the numbers to boast of, but a part of its revenue is being “leaked” on to a rival’s network by virtue of the customer using multiple SIM cards.
A viable way to retain customers is to build the right value proposition to mitigate the practice of holding multiple SIM cards. This can be done by focusing on providing a fair mix of the all-important elements of quality of experience and quality of service, coupled with the services bouquet itself.
This brings us to the crux of the piece – the role of customer experience management (CXM). First, telecom operators should move away from offering limited products and services through limited channels. The first rule of understanding what CXM can do for your business is developing more sophisticated and personalised offerings, which ought to be delivered and serviced through multiple channels. This will help assure customers that your brand is omnipresent and is willing to lend an ear to what they have to say.
Next, let us dwell on the importance of a multi-channel CXM strategy. The keywords to focus on are these: consistency and ease of interaction. As a customer, there is nothing more frustrating than having to wait for minutes to contact a customer care representative, or having to contact the same company for the same query over and over again. This could lead to the loss of a viable customer. Therefore, operators must ensure that they are listening to their customers. If an operator gets a sense of what the consumers need, it will be easier to anticipate their demands the next time around. That is CXM at its best.
Of course, it does not end there. Besides the assurance that your brand is “always-on”, the availability of real-time services is a brand’s trump card. Today’s customer expects, no demands, a brand that can deliver convenient and immediate services. This highlights the importance of self-service. Customers should be enabled to carry out transactions like purchase additional data, pay bills, update contact details or their plans or handsets immediately. This is a win-win proposition, which will benefit the operators through customer stickiness, reduced cost and churn, increased sales and reduced usage of call centres.
In sum, this is by no means an exhaustive list of the best ways to leverage CXM. The aforementioned pointers are mere theory; one will need a long-term strategy that is clearly defined and well-researched, and focuses on the customer’s journey in an end-to-end manner.
