Mobile operators are trying really hard to be ‘customer focused’ and at the same time want to deliver attractive earnings per share for impatient shareholders as their text and voice revenues plummet.
While the two aren’t mutually exclusive, in the traditional telecoms world there persists the unfortunate mindset that being overly transparent with customers can have a negative impact on EPS, thus reinforcing the perceived wisdom that customer service and profit are inversely correlated. This of course ignores all the lessons of the last ten years on how a happy customer is more loyal and generates a higher profit for the operator in the long term. But old habits and perceptions die slowly.
This awkward dichotomy occurred to me recently when I was reviewing Singtel’s Q3 earnings report and stumbled on this: “During the quarter 25 per cent of customers on tiered plans exceeded their data bundles, up from 19 per cent a year ago.”
While the operator didn’t applaud the climb, it was certainly a bright spot in an otherwise negative quarterly result (both profit and revenue were down).
I don’t want to single out Singtel as almost all operators have similar practices. But a truly customer-centric operator would certainly be taking steps to ensure subscribers were on the ‘right’ data package, and not incur excess data charges (usually at a high premium) when they go over. And to be fair to Singtel, its excess data charge is just SGD10.70 ($7.60) per GB. Its higher-tier data plans are close to SGD20 per GB, but those include voice/text/Wi-Fi access.
Nicole McCormick, a principal analyst at Ovum covering service providers, told Mobile World Live that while excess data charging is a monetisation opportunity, it should be more than that. “The onus is on the telco to drive the upsell of these customers to larger data, more expensive contracts that lock the customer in at a better price point over the longer term.”
The key mechanism for regulating that is preemptive texts alerting customers when they are near their cap, something many operators don’t do.
Last month Hong Kong’s CSL automatically topped me up 1GB for HKD99 ($12.77) when I exceeded my data cap for the first time in years. I only found out I was over my cap when I received a text saying “your top-up was successful”. A call centre rep informed me that I had signed up for automatic top-up, although I don’t remember opting in.
McCormick suggested real-time usage alerts at 50, 75 and 100 per cent of the cap. “If they don’t, and bill shock occurs, the user could churn. It’s as simple as that. Bad tariff policy is a tipping point for customer churn.”
Of course that also means eradicating hidden charges and misleading marketing claims, such as “unlimited” data, which in fact, is capped, she noted.
Operators’ challenges are manifold and increasing. But winning at the customer service game isn’t overly complicated – they just need to ensure an open and transparent strategy and they may then find they won’t have to work so hard at turning a profit for shareholders.
The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.