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As operators in mature markets take steps to move away from low margin or loss making all-you-can-eat data pricing models,US carriers are pioneering a model that enables families to draw data for each member’s personal device from a single monthly allocation. AT&T this week became the latest carrier to introduce the play.
AT&T’s plan starts at 1GB for $ 40, with a $ 45 fee for each smartphone attached to the plan. Current customers are not required to switch to the new plans, but can choose to do so without having to extend their contract. The new plans will also be available for business customers, and the operator expects the plan to become even more useful to consumers when M2M services grow in usage and popularity.
Verizon launched its shared data plan in June. It is offering customers unlimited voice calls and text messaging and a single data allowance for up to ten devices, beginning at 1 GB for $ 50, with an additional charge of $ 40 for each smartphone on the plan.
Jan Dawson, chief telecoms analyst at Ovum, said that although Verizon had the opportunity to benefit from a first mover advantage when it launched its shared data service, it made several key mistakes from which AT&T appears to have learned. He explained that AT&T is giving customers more options and a simpler charging structure.
“AT&T’s offering has almost identical pricing but some really important differences in the detail,” said Dawson. “Most importantly, AT&T isn’t forcing customers into the new plans, which is really important because they’re not the best deal for all customers. There are some subtle differences in the pricing too, but they won’t make a significant difference to most customers.”
Mike Roberts, principal analyst and head of Americas at Informa Telecoms and Media warned that, when operators introduced family plans for voice services, voice usage went up quite significantly. Operators do not want to encourage similar behaviour with data because of capacity issues.
“The art for the carriers is to sell the appeal of shared plans as being more convenient and easier to manage. The head of the household could manage the one bill and have everyone on it and keep control without having to worry about multiple bills,” explained Roberts.
Not all US operators are convinced, however, and Sprint has no plans to move to shared data pricing. Stephen Bye, CTO at Sprint, told Telecoms.com that while the cost of provision is rising faster than the revenues being derived from data, unlimited data plans are simply more convenient for the consumer. He said convenience is the key to customer retention and, when operators start to price data based on usage, it creates a very complex situation for a customer.
“With unlimited data price plans, customers clearly do not have to worry about their data consumption. But if operators introduce usage-based price plans customers have a new set of problems to think about, such as whether a software update is counted against their plan or the extent to which background applications are running and using up their data allowance without their knowledge.”
Controversially, though, Bye suggested that unlimited data can also be more cost-effective for the operator.
“A lot of operators are focused on the network cost but one needs to look at the overall end-to-end cost: what is the service related cost, how many calls are coming in to customer care teams? So we look at the end-to-end business model and we continue to believe that unlimited is the best value proposition for our customers, it provides the best experience, and that’s something we continue to support,” he said.
And T-Mobile USA has also suggested that consumers will not benefit from the shared contract model. The firm claimed that AT&T and Verizon’s shared family plans are costly, as the operators are charging more for what consumers want by raising rates on data, while promoting unlimited talk and text, even though today many consumers use less of these services.
T-Mobile added in a statement on July 19th that shared data plans are also complicated, as individual users don’t know how much of the shared allocation of data they are using, making it difficult to stay within their limit.
“Conversely, at T-Mobile we believe that customers who pay more, should get more,” said Harry Thomas, director of product marketing at T-Mobile USA. He added that data should be worry-free, with no surprise data cap or bill shock, and also flexible and affordable.
“Rather than having to account for each device on a shared family data plan, T-Mobile customers can use their existing data plan to power multiple devices, while still saving hundreds of dollars annually.”
Location based services have been on the operator radar for a decade or more and have been the next big thing for most of that time. Still looking for a opportunity to build an ecosystem around the sector, it’s now been suggested that carriers can sell their anonymised user data to third parties. According to research released this week, that model represents an $ 11bn opportunity by 2016.
According to a study comissioned by test and measurement firm JDSU and carried out by STL Partners, retail, transport and advertising firms could benefit from anonymised location based data on consumers that mobile operators can provide. The firm claims many tier one operators have publicly stated their intention of providing such location based insight services and are beginning to capture market share.
Dr. Mike Flanagan, CTO of location based services firm Arieso, which was acquired by JDSU in March this year, explained that a retailer such as Harrods could stand to understand more about its customers’ behaviour as a result of using such services to track customer movement around the store and surrounding area. But a commercially viable LBS model has yet to emerge that demonstrates any real scale.
French operator SFR told telecoms.com in October last year that it has found itself providing anonymised location based data to third parties which has helped increase blood donations among its customer base, build better public transport infrastructure in Paris, and even fight crime. The operator used Igloo Geolocator, an LBS solution from software provider Intersec.
“We are not selling our customers’ data, but by selling our studies of anonymous data, we are helping with projects to ease congestion and help build more efficient public transport in Paris,” explained Mathieu Gras, the operator’s head of location based services.
However, with media revelations exposing how certain agencies unlawfully track consumers’ data, concerns have been voiced about data privacy. As a result Flanagan warned that operators can and must collect and analyse location based data in an ethical way.
“We’re working with our customers to make sure they are fully compliant with the directives from regulator bodies, as well as broader consumer sentiment on how this kind of thing should be controlled and how privacy should be respected,” he added.
Turkcell has rolled out a Big Data application to help it recover from network failures by correlating information from different sources in real time to identify the root cause of failure.
The Turkish carrier, which boasts over 32 million subscribers, tapped up SysMech for the installation, using the specialist’s insight gained from cell site optimisation, planning and monitoring of the London 2012 Olympics.
Turkcell needed a Big Data analysis tool because a network of its size generates a lot of data, which in turn requires a lot of time, resource, energy and money to track the many issues that occur.
In one example the telco highlighted the situation of a power failure at a base station which triggered several different alarms. SysMech’s ZenSM tool was able to identify the underlying problem and aggregate the alarms, summarising the failure in a single alarm and reducing the time an engineer takes to work out the problem. This results in less alarms to investigate, quicker recovery from failures, and increased service availability.
Big data will be a key topic at the Broadband World Forum, taking place on the 22nd – 24th October 2013 at the RAI Exhibition and Convention Centre, Amsterdam. Click here to download a brochure for the event and here to register for a conference pass.
Head of customer experience, Virgin Media, UK: “Big data can help better explore vast opportunities the digital world creates”
Paul Elworthy, head of customer experience for Virgin Media, UK is speaking at the Broadband World Forum, taking place on the 22nd – 24th October 2013 at the RAI Exhibition and Convention Centre, Amsterdam. Ahead of the show we speak to him about how Virgin Media is looking to enhance the customer experience of its Broadband customers.
What impact is new technology having on how you interact with your customers?
There are two main areas that technology is really influencing how we interact with customers. Firstly the growth of online communication channels – in particular social media – is having a transformative effect. Social channels provide amazing opportunities to not just serve customers via their channel of choice but also to amplify the brand across large customer segments. Clearly with this opportunity come risks – any mistake can rapidly gain an audience. But for those organisations that have customer experience at the heart of what they do, like Virgin Media, making your brand and attitude more visible is a massive opportunity.
Secondly we have a huge amount of data about the products we provide and customer feedback. Over the last few years we’ve been working hard to ensure that data works harder for us across the business – improving the performance of our products, targeting resource, increasing efficiencies across our marketing, sales and retention channels and improving the support experience.
How do you look to differentiate your customer experience from that of your main rivals?
Virgin Media’s customer experience is rooted in our three strategic assets – our people, our brand and our network. The Virgin brand has always had the customer at its heart, and delivering the great customer experiences that we’ve all come to expect from Virgin brands relies on having a really engaged bunch of people working together for customers and shareholders. We’re proud to have some of the highest people engagement scores in the industry. This really matters. When you combine these elements with our powerful fibre optic network, we’re in a unique position to deliver the products and services that make a real difference to people’s lives. So, in that respect, differentiated customer experience is at the heart of our proposition. The job of our product, service and customer experience teams is ‘simply’ to optimise those assets to deliver great customer experiences consistently, day in, day out.
The Broadband World Forum is taking place on the 22nd – 24th October 2013 at the RAI Exhibition and Convention Centre, Amsterdam. Click here to download a brochure for the event.
Where has the industry as a whole gone wrong with regards to the customer experience in the past and how can it look to improve?
Failure to deliver great customer experience comes from a number of areas; failure to listen properly to what customers are saying; failure to effectively analyse that insight for meaningful outputs; failure to apply that insight systematically and consistently through all product and service development; and finally, failure to give the customer a seat on the Board i.e. by not including customer measures, like Net Promoter Score (NPS), in core business performance metrics and reward structures. Sounds simple – but as we all know it isn’t!
“Dial 1 for this, Dial 2 for that”. Do you see a future where you’ll ever be able to move away from this sort of phone system?
Yes. We have already deployed intelligence into our IVR systems to identify why a customer may be calling and therefore route them intelligently. Is there opportunity to do more? – of course. We’re already exploring new call routing and auto-diagnostic technologies which will over time reduce the overhead on customers to manually route via IVR. It takes time – but it will happen.
How do you manage customer expectations when their broadband speeds don’t match what they were expecting?
Our fibre optic network means we deliver against our advertised headline speeds. In fact, independent testing by Ofcom shows we often deliver speeds faster than advertised and our customers typically receive 90 per cent of the advertised ‘up to’ broadband speeds, far out-performing our competition. We’ve also invested significantly in developing our in-home wireless capabilities. Our new Super Hub 2 has gone through independent testing with Bristol University who found it out-performed all our other competitors’ kit.
We also have extensive online assets, including videos and articles, helping our customers get the most out of their broadband. This is a really key point – the vast majority of issues affecting speed for customers are actually down to factors within the home such as the wireless signal being interfered with, so we have invested heavily in customer education material like this to help them get the most out of an increasingly complex digital world.
Free tech support is on-tap including free engineer call out if it’s a network issue. And if we find that the customer has problems rooted in their device we have tech support teams that can go in and fix problems for them remotely.
How is the use of “big data” enhancing what you can learn about your customers?
We obviously have a huge amount of customer feedback and product performance data, so our focus has been on how we bring that data together and leverage it to improve the product and service experience. Also, we’re increasing our capability to combine operational and product data points with customer NPS and Voice of our Customer data. Having this 360 degree view across cause and effect helps us focus on what matters most. We are also starting to explore how big data can help our customers better explore the vast opportunities the digital world creates in the same way Virgin Media TiVo helps our customers explore the vast choices they now have in the world of digital entertainment.
What is going to be the biggest change for customer experience in the next five years?
For organisations where customer experience is well established we’re likely to see a move beyond delivering the basics brilliantly to how customer experience can be used to further differentiate and switch on promoters and advocates. Creating stand-out experiences that customers want to talk about.
What are you most looking forward to about attending the Broadband World Forum?
Meeting up with colleagues old and new around the industry, to share stories, experiences – and hopefully a beer or two!
And finally – Have you ever actually read Virgin Media’s, or indeed anyone’s entire ‘Terms and Conditions’?
Yes I have. And just in case our legal team are reading this – it’s a beautiful piece of work!