dexterity subscriber complexity

8/6/2019 Dexterity Subscriber Complexity

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THE NEED TO GET A HANDLE ON

CHOICE AND CHANGE IN GLOBAL

COMMUNICATIONS MARKETS

MAKING SENSEOF SUBSCRIBER

COMPLEXITY


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Today’s communications landscape is characterized by unprecedented change, choice,

and convergence. The rapid pace o innovation, the widespread availability o mobile

communications, and new services and packages have combined to oer the subscriber an

enormous array o new, better, more aordable ways o communicating and entertaining.

Managing the challenge o subscriber complexity and choice in communications and media

markets now represents one o the most critical business imperatives acing service providers

worldwide. Subscriber expectations are exploding around value, eatures, services, pricing,

quality, convenience, user control, and personalization – with more opportunities than ever to

switch allegiances to both established and new disruptive competitors.

Yet according to the 212 executives surveyed as part o the CMO Council’s Bringing Dexterity

to Subscriber Complexity campaign, most providers are challenged to meet this changing

subscriber demand, more oten ocusing on issues around technology inrastructure and

operational demands to increase protability rather than accelerating the development o adata-driven, highly personalized user experience. And while customer churn can be attributed

to service capabilities and pricing structures, customer experience is also weighing heavily on

the decision making process. Let unchecked and unmanaged, subscriber complexity runs the

real risk o spiraling out o control, making the delivery o service and the optimization o

customer experience an insurmountable challenge.

However, what is also clear rom this study is that the reality o today’s mounting complexity

is not a surprise to operators. It is the signicant internal resistance to change and the cultural

shit away rom a commoditized provider and into a customer-centric, insight-led, ully

integrated experience that may prove to be the greatest challenge. While maximizing return

on costly operational improvements and bandwidth capabilities is clearly an important issue

to address, in regards to managing subscriber complexity, it may turn out to be only part othe equation. Executives across the C-Suite, rom IT to Marketing, must start to look at the

systems, solutions and strategies in place that can manage subscriber data, help develop

a more robust, personalized experience, and develop key strategies that can identiy new

(potentially untapped) routes to revenue. The payo to overcoming these roadblocks and

challenges is nothing short o a revenue windall. In act, 94 percent o respondents see

revenue upside potential, and over hal see more than 10 percent increases in uptick.

User Demands Shaping the New Mobile Reality

More than ve billion global users and customers have access to a dizzying array o more

cost-eective and available services, devices, means o access, and payment options. This all

adds up to a healthy and growing market or more advanced orms o communication and

commerce. However, or those who are tasked with providing the global services, equipment,and inrastructure to support the onslaught, the age o convergence comes with a set o

substantial challenges and complications.

Customers have greater ability than ever to switch allegiances to both established and new

disruptive competitors. Churn is abundant, with annual churn or major telecommunications

companies ranging as high as 67 percent, according to the Database Marketing Institute.

A Jupiter Research report shows that 40 percent o consumers who highly value telecom



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customer service said they would purchase rom another merchant based on a poor customer

service experience, and 96 percent who put orth high eort to resolve their issues are more

disloyal.

Mobile device prolieration is abundant, and urther complicates the picture or operators and

device manuacturers. The worldwide smartphone market will grow 55 percent year over year in

2011 as total shipments o smartphones in 2011 will be 472 million – and that gure is expected

to nearly double to 982 million by the end o 2015 as more users exchange their eature phones

or more advanced devices, according to IDC. The market is experiencing a surge in tablets,

netbooks, dongles, set-top boxes, telemetry devices, etc. Driven largely by the iPad craze, the

tablet market is expanding by 45 percent quarter over quarter, according to IDC. Touchscreen

mobile device sales are expected to grow by 97 percent this year alone, says Gartner.

In tandem with this surge in devices are increasing demands or the bandwidth to run them.Network inrastructure and resources are stretched to the limits as data usage in Western Europe

and North America is expected to increase at a compound annual growth rate (CAGR) o 42

percent and 55 percent respectively through 2015. The average North American user consumed

59 percent more data in 2010 than in 2009, according to ABI Research. This heavy volume

and consumption o inormation is creating increased network congestion and also threatens

protability or data services that have traditionally been packaged and priced as an “all you

can eat” unlimited oering. The reality is that trac volume is growing exponentially yet

corresponding operator revenue has more o a gradual linear trajectory under current models.

Beyond the growth o data volumes, the explosion o apps and content is making the

subscriber equation more complicated. With more than 50 billion downloads expected next

year, the mobile app market is predicted to boom to $17.5 billion by 2012. The tremendousgrowth o IP-based multimedia is also increasing consumer choice and expectation while at the

same time adding new levels o intricacy to the service provider and operator base.

Finally, changing demographics and data access and delivery models are playing a role in

conounding the operator’s business. The slowdown in growth in developed countries and the

rapid uptake in emerging markets is changing the priorities o service providers and helping to

shape a new set o oerings and policies. Emerging models such as data access service passes

or a set period o time, bundled access with content and application use, partner-unded

access or trac priority, and split billing are a ew examples o the new innovative ways to

more discretely deliver and charge or service.

Fighting the Enemy WithinWhile operators agree that they must address signicant roadblocks that currently stand

between them and the ability to deliver more personalized and relevant services and user

experiences, the more signicant barriers may actually lie within their own corporate walls.

Over two-thirds o the operations surveyed eel that the traditional corporate mindset within

their organization is out o sync with the new orms o competition and service delivery.

Additionally, 72 percent believe that the poor alignment between marketing sales and IT –

three critical stakeholders in the delivery o an optimized customer experience – is a major



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roadblock. What is clear is that these internal, corporate challenges could be doing more harm

to the user experience than user demand itsel, creating additional roadblocks in their wake.

Consider the other key issues operators are acing:

• 81 percent struggle to launch and provision new services quickly and cost eectively

• 72 percent lack the subscriber insight and intelligence critical to the

execution o a more personalized user experience

• 75 percent lack integration between disparate data sources, tying

directly back to the challenges o not having the needed insights and intelligence

• 78 percent indicate they are not able to target individual subscribers with oers and

upgrades based on both historic as well as current behavior and needs

These issues link to the reality that corporate culture and inrastructures are not connected,

aligned and ready to meet the needs o the shiting industry, and must change to meetthe growing complexity. Until the mindset o management and the alignment between

key customer experience roles is managed, operators will likely continue to see these issues

around insights, intelligence and the ability to quickly go to market with products and

services.

The more in-depth dialogs the CMO Council conducted with operator executives (outlined

later in this report) point to many o the same struggles and issues. Nearly every executive

sees segmentation and data integration as a key challenge to be overcome. As one executive

put it, “There is denitely a greater need or insight and intelligence into our subscriber

base in terms o preerences and behaviors because the market on customer needs is always

changing…we are working extremely hard to create new models or data mining in order to

understand emerging clusters.”

Other executives in the conversations point to an internal legacy mindset that is hampering

progress. One commented on the industry as a whole: “My view on how the operators

have handled the infux o everything, broadly speaking, is that many o them still have

this utility-driven mindset. Many o them are still thinking in silos and they’re not market-

and customer-centric yet. So there’s a long way to go…they have to start breaking down

mentally the way they think o a utility, and start to be much more customer ocused,

customer centric, and customer driven as an organization.”

Unortunately, it does not seem that this shit is a key priority or operators, who instead

intend to ocus on simpliying the customer experience rather than truly making real changes

to improve it. Subscriber data management and integration will be a key strategic priority

according to 43 percent o the respondents, as another 32 percent will ocus on replacing

declining core service revenues.

But operators must get their priorities straight. While new routes to revenue must be

uncovered, it is telling that only 9 percent o operators will make up-selling or cross-selling

within more developed markets a priority, while only 5 percent will look to make services more



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accessible and aordable in developing markets – both likely dependant on access to data

through improved subscriber data management solutions and ully integrated data resources.

Operators must commit to and make the delivery o an optimized customer experience –

one that is highly relevant and personalized to the needs, behaviors and expectations o the

user – a key priority. This will require that not only data resources be aligned, and or key

unctional groups to be in lock-step, but also or senior leadership to change their thinking

to embrace this new culture o customer complexity.

Fundamental Need to Manage Change and Choice

Successul operators must achieve new levels o fexibility, insight and eciency in the

way they activate, cultivate and optimize their subscriber base. They must innovate and

improve how they identiy and address diverse customer needs, create more compelling and

individualized subscriber experiences, as well as market and deliver new service, pricing andpayment options. At the same time, they must cost-eectively manage network resources

in the ace o rising bandwidth demands rom their diverse user base. Operators are acing

a growing business imperative to innovate and elevate the way they segment and address

more ragmented and rapidly evolving subscriber audiences. This includes being able to

better identiy, track, engage, service and up-sell more diverse customer types with varying

liestyle, business, socio-economic, psychographic, ethnographic and application-specic

needs. These are increasingly driven by device or channel preerences, service requirements,

content consumption patterns, pricing options and payment plans.

Operators must uplit their game in the area o subscriber data management and increase

their capacity to deliver a more individualized subscriber experience and bring to market

new services, pricing, and payment options that can meet these more segmented needs.The confuence o new devices and business models, huge volumes o data, an explosion o

content and application delivery, and an increasingly competitive landscape is creating the

need to rethink and revamp strategies to handle the complexity. New systems and solutions

must be considered to handle the onslaught. And new mindsets and business models must

replace the old in order to survive and thrive in the new world o subscriber complexity.

Service providers need to take advantage o real-time intelligence and customer insight and

be able to make better business moves based on subscriber usage and context patterns. They

need to have the proper inrastructure, sotware, and support systems in place to provide an

end-to-end view o their subscribers and all their complexities and to allocate resources and

services accordingly. And they need to embrace the upside top line opportunities that lay

ahead i they get it all right.

Successul operators must achieve new levels o fexibility, time to market, insight and

eciency in the way they activate, cultivate and optimize their subscriber base. At the

same time, they must ocus on innovation and improve how they identiy and address

diverse customer needs and cost-eectively manage network resources in the ace o rising

bandwidth demands rom their diverse user base.



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RESEARCH OVERVIEW

In order to get an comprehensive understanding o the actors contributing to subscriber

complexity and how communications operators can get a better handle on the issue, the

CMO Council and its Customer Experience Board conducted on online survey o 212 senior

level proessionals in marketing and IT at communications service providers and cable/

satellite operators worldwide in April-May o 2011.

In addition, the CMO Council conducted more than 15 in-depth dialogs with prominent

marketing and technology executives at some o the world’s most recognized operator

brands along with other market infuencers and academics to get their insights and

perspectives on the issues, challenges, and best practices they have encountered in terms

o subscriber complexity. Combined with insight gathered rom third parties on the campaignmicrosite www.subscribercomplexity.org, this extensive inormation has been collected and

analyzed in the ollowing report as a means o educating the marketplace on obstacles,

opportunities, and best practices around subscriber complexity and choice in communications

and media markets.

This report is part o a broader thought leadership program called Bringing Dexterity

to Subscriber Complexity that proles and benchmarks where and how companies are

experiencing and addressing diverse needs, preerences, and behavior patterns across

a multiplicity o device types, plans, and pricing options in the complex market or

telecommunications, wireless, and digital media services. The program is a multi-channel

thought leadership program undertaken by the CMO Council and its Customer Experience

Board and sponsored by Openet (www.openet.com). The initiative looks at new practices incustomer interaction and engagement, subscriber data management, and alternative service

packaging and pricing.

Initial inormation on the initiative and a new whitepaper are available on the program

microsite site at www.subscribercomplexity.org. The microsite also eatures initial leadership

committee members, supporting acts, articles, content, and other resources.



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EXECUTIVE SUMMARY OF KEY FINDINGS

Most operators are ocused too much on traditional concerns around inrastructure and

operational requirements rather than data-driven customer experience and new routes to

revenue

• 83 percent o operators eel they need to get a better handle on the network

resource and support challenges presented by a more demanding customer base

and the prolieration o new devices

• 47 percent say i let unchecked and unmanaged, subscriber complexity could spiral

out o control

Carriers are oten times ghting signicant internal barriers within their corporate walls

• 68 percent say their traditional corporate mindset is out o sync with new orms o

service

• Traditional concerns such as meeting consumers bandwidth needs (55 percent),

support or new devices (35 percent), and pricing are identied as main drivers o

complexity

• 72 percent point to poor alignment between marketing, sales, and IT

• 81 percent struggle to launch and provision new services quickly and cost eectively

Most are not paying enough attention to undamental, data-driven, personalized experience

• 72 percent lack the subscriber insight and intelligence critical to the execution o a

more personalized user experience

• 75 percent need integration between disparate data sources

• A majority (52 percent) do not have good capabilities or segmented oers and

promotions

• 42 percent need improvements in their CRM and subscriber management and

tracking

Many are not ully optimizing new routes to revenue

• While 59 percent o operators say they are considering new revenue sources rom

over-the-top (OTT) services,

• Focus seems to be on meeting OTT bandwidth needs (25 percent) and providing

fexible plans (14 percent)

• 94 percent aren’t exploring partnerships such as revenue sharing with OTT providers

• 88 percent don’t believe OTT providers are competing or their customers

An array o new devices, greater bandwidth needs complicating the picture

• Increasing bandwidth demands is the biggest contributor (55 percent) to subscriber

complexity, ollowed by support requirements or new devices (35 percent)

• The growth o smart phones (63 percent) and tablets (46 percent) are the two

biggest trends creating the need or more granular customer management



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A majority o operators earn a C or worse grade in managing subscriber complexity

• Mobile and over-the-top providers rank best, whereas cable and satellite operators

and ISPs at the bottom

• Only 25 percent rate their own pricing and service fexibility as high

• 46 percent have signicant issues with data silos and disconnects or poor integration

with customer data stored in disparate repositories

Shits in global mobile adoption are causing direct impact on operators

• 70 percent say a slowdown in adoption rates in developed countries has increased

the importance o their subscriber retention and revenue optimization

• 37 percent say the rapid adoption o mobile communications services in developing

countries is causing them signicant strain

Pricing models are in fux

• 74 percent say the traditional fat rate subscription model hurts their company’sability to maximize revenues and protability, primarily because o growing

bandwidth usage

• Only a quarter o operators rate their pricing and service fexibility as high in order

to compete in today’s complex communications market



Presented By

About the CMO CouncilThe Chief Marketing Officer (CMO) Council is dedicated to high-level knowledgeexchange, thought leadership and personal relationship building among seniorcorporate marketing leaders and brand decision-makers across a wide-range ofglobal industries. The CMO Council’s 6,000 members control more than $200 billion inaggregated annual marketing expenditures and run complex, distributed marketingand sales operations worldwide. In total, the CMO Council and its strategic interestcommunities include over 20,000 global executives in nearly 100 countries coveringmultiple industries, segments and markets. Regional chapters and advisory boardsare active in the Americas, Europe, Asia Pacific, Middle East and Africa. The Council ’sstrategic interest groups include the Coalition to Leverage and Optimize SalesEffectiveness (CLOSE), LoyaltyLeaders.org, Marketing Supply Chain Institute, CustomerExperience Board, Market Sense-Ability Center, Digital Marketing Performance Institute,

GeoBranding Center, the Forum to Advance the Mobile Experience (FAME), and thecause-directed research initiative, Pause to Support a Cause. More information on theCMO Council is available at www.cmocouncil.org

About the Customer Experience BoardThe Customer Experience Board brings together a dedicated knowledge center andglobal think tank comprised of concerned marketers from leading service providerorganizations and key industry experts who interact and engage to gather insightaround improving global integrated customer experience management and promotebest practice adoption in this critical area of business performance. The CustomerExperience Board is focused on benchmark studies, audits and competency assessments,content aggregation, report publication and syndication, peer-topeer interactions, bestpractice development, vertical industry analytics, and global models and frameworks forintegrated customer experience management. For more information visit

www.customerexperienceboard.org

About the BPI NetworkThe Business Performance Innovation (BPI) Network is an influential group of senior-level executives driving transformation, process re-invention, organizational innovation,lean operation, and competitive adaptability in multi-national enterprises worldwide.Members of this change-centered affinity network represent companies with combinedannual revenues of more than $1 trillion. The aim is to share thinking and advance bestpractices in how enterprises can “transform to better perform” as they seek to tap morecomplex, cost-sensitive, growth markets with large, diverse and evolving consumer andinfrastructure needs. More information is available at www.BPINetwork.org

About Openet’s Service Optimization Software (SOS)To succeed in this environment, you must first know your subscribers and how theyuse your services, be capable of deploying innovative business models that maximizerevenue, and be able to control the allocation of your network resources intelligentlyand efficiently. This is making the most of every network and customer. And Openet canhelp with our Service Optimization Software. At the core of our solutions is the OpenetFramework, a convergent, modular, real-time event processing and transactionmanagement platform. This Framework enables operators to transform their BSS/OSSenvironments to capitalize on new services, business models and network investments.A global company, Openet is used by the world’s largest and most innovative serviceproviders including AT&T, BT, Orange, Telstra, Time Warner Cable, and Verizon Wireless.Learn more at www.openet.com

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Media Partners

The Mobile Marketing Association (MMA)The Mobile Marketing Association (MMA) is the premier global non-prot tradeassociation representing all players in the mobile marketing value chain. With morethan 700 member companies, the MMA is an action-oriented organization with globalocus, regional actions and local relevance. The MMA’s primary ocus is to establishmobile as an indispensible part o the marketing mix. The MMA works to promote,educate, measure, guide and protect the mobile marketing industry worldwide. TheMMA’s global headquarters are located in the United States and it has regional chaptersincluding North America (NA), Europe, Middle East and Arica (EMEA), Latin America(LATAM), and Asia Pacic (APAC) branches. For more inormation, please visitwww.mmaglobal.com.

Light ReadingFounded in 2000, Light Reading is the leading online media, research, and ocusedevent company serving the $3 trillion worldwide communications market. Lightreading.com is the ultimate source or technology and nancial analysis o the communicationsindustry, leading the media sector in terms o trac, content, and reputation. LightReading’s research arms, Heavy Reading and Pyramid Research, provide the mostcomprehensive communications research, market data, and technology analysis inclose to 100 markets around the world. Light Reading produces nearly 20 targetedcommunications events including TelcoTV, Ethernet Expo New York and Ethernet ExpoLondon, The Tower Summit @ CTIA, and Optical Expo, as well as ocused one-day events

tailored or cable, mobile, and wireline executives. www.lightreading.com

RCR Wireless

RCR Wireless News: enabling intelligence on all things wireless or industry leaders andenterprise volume buyers. RCR Wireless News is the premier news source or the wirelesscommunications industry and is rst with carrier, distributor, network, handset andmobile content news. Published since 1981, RCR Wireless News keeps our subscribersengaged and inormed with breaking stories, enlightened eatures and invaluableindustry insight. RCR Wireless News target audience is executive-level employees atleading wireless companies, and volume buyers at enterprise-class organizations. It isour dedication to editorial excellence that leads executives to consistently choose RCRWireless News over other industry publications. RCR Wireless News oers daily emailalerts so wireless industry proessionals can stay inormed on industry happenings.www.rcrwireless.com

PipelinePipeline is the leading publication solely ocused on providing in-depth and ongoingcoverage o the OSS/BSS industry. Service Providers in more than 160 countries turn toPipeline or relevant inormation to aid them in the delivery o next generation services.Pipeline covers emerging OSS and BSS issues and the evolution o the communicationsindustry, and provides timely news analysis and perspective rom top analysts andthe oremost OSS/BSS vendors. Now in its eighth volume, Pipeline continues to leadthe telecom publishing industry through its innovative on-line ormat, interactiveadvertisements and provocative editorial content. Read the current issue o Pipeline atwww.pipelinepub.com


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MobileGrooveMobileGroove: named a top 50 infuential technology site by Konector – is the sourceo analysis and commentary on mobile search, mobile advertising, and social media.Peggy Anne Salz, the Chie Analyst and Founder o MSearchGroove (MSG), producesand markets thought leadership or the mobile industry. Her report, Mobile Search& Content Discovery, was regarded as the rst in-depth study o its kind, establishingPeggy as an authority on mobile search and content discovery technologies. Her mostrecent series o practical how-to white papers covers the basics o mobile advertisingand mobile analytics, earning her a reputation as a leading mobile advertising expertand speaker. Her published work, which includes more than 300 articles on the mobileindustry, has appeared in magazines and online destinations such as The InternationalHerald Tribune, The Wall Street Journal, Mobile Entertainment, New Media Age, and inthe Agile Minds column in EContent magazine, among many more.www.mobilegroove.com

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