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June 10, 2013

Accenture Survey: Mobile Operators Need More Digital Services, Better Networks to Keep Customers

Accenture is out with a really interesting survey,” Accenture’s Mobile Web Watch 2013.” And, if you are a mobile operator and want to keep your customers satisfied this is a must read. The good news is that Accenture validated the fact that more and more of us are mobile device-centric. Our personal devices are increasingly our interaction platforms of preference for doing “E”verything from paying for stuff to watching videos, managing our intelligent homes, along with spending much of our leisure time online.

The not-so-good news is that we are a demanding lot.  In fact, the survey says that to keep us satisfied, mobile operators need to increase their digital services and ramp up how fast we have ubiquitous access to high-performance networks.

An infographic that accompanies the survey says it all:

Source: Accenture Mobile Web Watch 2013

This is more than just anecdotal. Accenture surveyed nearly 31,000 consumers in 26 countries to understand what communications service providers (CSPs) must do to “address their well-connected consumers’ desire for immediacy and increased control of their digital communication and entertainment options.”  It is representative of Internet users in terms of age, gender and income.

Key findings on consumer mobile wants are food for thought

Here are a few of the key findings from the infographic to consider:

  • 97 percent of all respondents cited speed as important
  • 78 percent said there is some room for improvement
  • 63 percent said they would pay additional monthly fees for mobile Internet service that would be 10 times faster than their current connection

That said, as will real estate this comes down to location, location and location when it comes to willingness to pay.

  • In mature markets, the willingness to pay extra for 4G is lower (57 percent of all respondents in these markets), except in Italy (71 percent) and Finland (70 percent)
  • In emerging markets, 76 percent would pay more for 4G

This is not just about speed. The survey also showed that providers must deliver an outstanding quality of service to satisfy customers.

  • 96 percent said the quality of network is important which is close to the 95 percent who desire higher speeds
  • Accenture found it surprising that 94 percent said the cost of data is slightly less important than quality, coverage, or connection speed
  • 89 percent cited customer service as being important

“Mobility is not only driving convergence, but it is also accelerating consumers’ appetites for a high-quality, seamless experience on their mobile devices,” said Monte Hong, Accenture’s managing director for Global Communications Industry and Asia Pacific Communications Industry. “These days, every business is a digital business, and consumers are looking for the kinds of personal relationships that were typical years ago, between shoppers and their neighborhood store. To stay in the game, providers must deliver the variety of services consumers and businesses want – on fast, reliable, secure networks – or they will struggle to keep up with competitors at every turn.”

Competition is fierce

As noted above, another finding was that network operators need to up their game to stay in the race. In fact, the survey revealed that customer loyalty is fickle and competition from “non-traditional” competitors that include device manufacturers and financial institutions is a current and persistent challenge.

For example, when asked who they prefer to supply their “packaged” communications bundles—audio and video calls, messaging, e-mails and access to applications on their mobile devices— 31 percent of all consumers surveyed, and 42 percent in emerging markets,  said they would turn to device manufacturers for all their communications needs.   While intuitively this may not make sense since most devices are obtained today via the operators who do not retail the phones because their value-added is from providing the service, it seems to be a leading indicator of customer dissatisfaction with their user experience of interacting with the mobile operators and should be a cause for concern.

Equally interesting are the findings from when those surveyed were asked who they would choose as a provider, if mobile payments were as widely accepted as credit cards. As Accenture notes, “With this caveat in mind, more than half (56 percent) of those surveyed would switch to a provider that offered mobile payments if their current carrier did not.” Plus, an like the package question above, relating in essence to the issue of “whom do you trust?” consumers top choices for mobile payments providers were:

  • Banks, 89 percent
  • Payment card providers, 81 percent
  • Mobile providers, 77 percent

While there were differences based on maturity of market on this one, the fact that mobile providers rank third by a relatively significant margin is another warning sign about their ability to extract value-added from customers. In short, they run the risk of becoming RF-based dumb pipes. One silver lining was that, at least for cloud services, mobile providers were the top pick. In addition, location-based services were cited as important along with making Internet-based phone calls, but some could argue in many ways that these fall into the category of basic services. After all, OTTs currently provide free location-based services, and VoIP is a commodity. “There are certainly challenges for providers, especially in the face of technology developments – including mobility, analytics, cloud, digital services, and social networks – that are accelerating convergence. As a disruptive force, convergence is a threat to the unprepared, but CSPs can compete by assuring quality of service as they address customers’ demands, manage new traffic patterns or reconsider the structure of data plans.”

Hong added, “There are also potential opportunities in mobile payment services – perhaps by collaborating with financial institutions. CSPs can also consider cloud-based and location-based services, using tools like analytics to help ensure deep insight into subscribers’ behavior, which will help CSPs deliver an innovative, consistent digital experience to their customers.”What the survey and Hong’s recommendation highlight is that mobile operators are in a tough battle for customer loyalty on two fronts. They need to compete with each other on the basis of speed because consumers desire, and in many cases, are willing to pay for it. However, as mentioned, speed is not enough. The operators run the risk of losing the value-added high ground to banks, payment providers, and others as our wallets of choice become our personal devices and hence going forward owning the payments and billing engagement will be critical. They also clearly have a trust issue based on the vendor rankings for having a single trusted provider of packages.

The markets are moving fast. They are clearly calling for new business models by the mobile operators as ecosystems evolve. This by no means suggests they are doomed. In fact, it suggests there really are tremendous opportunities. The challenge is going to be on whether the operators can be fast to market and fast in the market and partner adroitly to meet consumer expectations. On the infrastructure side of things they are investing heavily and this can and should pay off. Whether they are going to invest as heavily on the “customer experience” side of things is for the moment the great imponderable.

Edited by Alisen Downey

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