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Missed millions as mobile operators ignore their customers

Written by Robin Hague

Staggering revenue failures as mobile consumers plead for more deals

The mobile industry converged on Barcelona for Mobile World Congress, which is increasing in significance year-on-year even as new research shows mobile operators are missing major revenue opportunities and there’s a growing gulf between what consumers want and what they’re being offered.

Among other milestones, Mobile World Congress saw the launch of the Garmin-Asus nüvifone A50, a touchscreen Android smartphone with location technologies and the obligatory apps; Dolby Laboratories’ next generation technology that brings discrete 5.1 multichannel audio to mobile handsets and of course Microsoft’s Windows Phone 7 series.

This last brings Xbox LIVE games and Microsoft’s Zune music and video platform to mobile devices; Microsoft says its partners have already started building the handsets, which are due in stores by Christmas. There was precious little detail about this though and it will take something very special to outgun Apple’s imposing iPhone and its galaxy of apps.

Another significant development sees Nokia and Intel unify their Maemo and Moblin Linux-based platforms to create MeeGo, a system that will run on multiple devices, including smartphones and tablets.

There’s also been some impressive work out there in upping the mobile television ante and there was plenty on offer to silence mobile TV cynics, who, including FreebandTVNews, have been warning of a dearth of the kind of strong content that’s needed to propel mobile television to a commercially sustainable level.

While there’s not much in the way of new content to shout about, there certainly are plenty of encouraging technologies that promise to connect more devices and more users to existing television and other video content, such as conventional TV and movies.

The new LTE standard is at the heart of much of this development, enabling much higher transmission rates, ideal for mobile media applications. In Berlin Fraunhofer researchers have developed a SVC over LTE coding process that will offer HD films on mobiles and netbooks, delivered without interruption and disconnection.

Nagravision demonstrated its Media MOBILE products, which also promise secure streaming of mobile TV and mobile VOD over 3/4G and WiFi networks.

Another exhibitor at Mobile World Congress was Convergys, which published extremely interesting research showing mobile consumers, in the UK at least, are willing to spend more on their mobile services, if only their mobile service providers offered them something worthwhile.

Convergys surveyed 500 mobile users in January 2010, finding nearly two thirds (61 percent) would “spend more with their mobile service provider if mobile operators gave them the flexibility to choose the options that fit their needs”.

According to Convergys, the results show that consumers are “increasingly willing to bundle broadband, TV and even games consoles with their mobile service, as long as the provider can offer the flexible service and choice that consumers demand”.

Nearly half (49 percent) said their operators made no attempt to offer them any promotions or bundles, even though a resounding 72 percent claimed they would like to buy new bundles.

In other words, mobile operators are missing an important opportunity to drive more revenue and increase ARPU, simply by failing to provide much more flexible and clever aggregations of their offers.

Bob Lento, Conversys’ President of Information Management noted: “ … it is clear that subscribers want their mobile providers to advise them on which services they should buy and which combination of services will give them the best value for money. This is a great win-win for the mobile operator, as each contact with the customer provides an opportunity to increase user revenues.”

“However, it concerns me that so many people don’t receive offers from their mobile operators, even though they would like to. This is a missed opportunity. They [mobile operators] need to utilize convergent billing solutions, customer service channels and real-time intelligence strategically, so that each customer receives relevant offers and the services he or she needs.”

It would appear no UK mobile provider has mastered this ability to offer bespoke packages to its customers and as a result, is missing out on revenue from millions of customers who are ready and willing to buy new packages, if only they were offered them.

For example, who is offering short-term mobile TV subscription deals for sports events such as this month’s Winter Olympics, Wimbledon tennis or the 2010 World Cup? No-one.

Convergys is a global relationship management specialist, so Mr Lento’s melancholy at mobile providers’ customer relationship failures is no doubt sincere. Furthermore, this is the sort of customer message that should be getting some Boardroom action, but is too often ignored.

It’s a particular problem for providers hoping to push forward mobile television. Assuming the technology is there to put content on phones, the operators will have to do better in terms of fitting their offers to the demands of the consumer. Again, Winter Olympics, Wimbledon and the World Cup. What about the fashion audience, mostly female, which might be delighted to be offered content from the big seasonal fashion shows?

According to the Convergys research, the appetite and the money is there, even in a recession.

Contrast the woeful adding-value performance of UK mobile operators with research from Accenture’s 2010 Consumer Electronics Products and Services Usage Report, based on a survey of 16,000 consumers in four mature markets – the US, Germany, France and Japan, and four emerging countries – China, India, Malaysia and Singapore.

According to this research the consumers in emerging markets are twice as likely as their developed-market counterparts to buy and use consumer technology in the next year.

They are over two and a half-times more likely to buy a smartphone and twice as likely to have played video games on handheld devices. They use mobile devices for social networking much more than people in developed markets.

Furthermore, and relating directly back to the Convergys research, they use all of a product’s functionality more often than consumers in mature markets.

Why the difference? For one thing, mobile service providers in new markets have much better, more flexible and consumer-friendly offerings than their mature market counterparts in Europe and the US. They’re not held back by old business models, which serve as the inflexible, consumer-unfriendly blocks to new revenue development.

So, there’s the lesson. There’s plenty of revenue out their for the taking, as long as mobile operators tailor their products and services for the consumer, rather than demand the consumer bends over backwards to fit the operators’ plans.

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