Vodafone Australia admits to misleading carrier billing service

After an Australian Competition and Consumer Commission (ACCC) investigation, Vodafone Australia has admitted misleading consumers through its third-party Direct Carrier Billing (DCB) service.

The investigation looked into transactions made between 1 January 2013 to 1 March 2018, though it is most likely Vodafone broke the rules upon the introduction of an Australian Securities and Investments Commission Act in 2015.

“Through this service, thousands of Vodafone customers ended up being charged for content that they did not want or need, and were completely unaware that they had purchased,” said ACCC Chair Rod Sims. “Other companies should note, money made by misleading consumers will need to be repaid.”

The service was first introduced in January 2013 allowing customers to purchase digital content from third party developers such as games, ringtones and apps, with charges being applied to pre-paid and post-paid accounts.

The issue which Vodafone seems to be facing is the service was automatically applied to customer accounts, with purchases being made with one or two clicks. As the customer was not suitably informed, the service has been deemed to be misleading.

Vodafone has already begun the process of contacting impacted customers and will be offering refunds where appropriate. The telco has phased out the majority of the service already, owing to an increasing number of complaints during 2014 and 2015.

While a final judgment has not been released just yet, a confirmation and fine will likely follow in the next couple of weeks, other Australian telcos have been found guilty of the same offence. Both Telstra and Optus have been fined AUS$10 million for their own misleading carrier billing services.

Although it is hardly rare for a telco to be found on the wrong side of right, especially in Australia where the ACCC seems to be incredibly proactive, such instances will create a negative perception at the worst time for the telcos.

In an era when the telcos are searching for additional revenues, carrier billing initiatives are an excellent option. Assuming of course the telcos don’t mess it up.

The digital economy is becoming increasingly embedded in today’s society though there are still many consumers who will begrudgingly hand over credit card details to companies with whom they are not familiar. This mistrust with digital transactions could potentially harm SMEs while providing more profit for the larger players who have established reputations on the web.

In this void of trust and credibility, the telcos have an opportunity to step in and play the intermediately as a trusted organization; how many people have an issue with handing credit card information over to a telco?

There are plenty of examples of this theory in practice; Amazon or eBay are the most obvious and most successful. These are online market places which allow the flow of goods and cash between two parties who may not have had a prior relationship. The consumer might have an issue paying Joe Bloggs Ltd. as there is little credibility, though many trust the likes of Amazon and eBay, allowing the third party to manage the transaction and take a small slice of the pie.

Carrier billing can be an excellent opportunity to add value to a growing digital ecosystem, using the consumer trust in the telcos to drive opportunities for those businesses which want to grow online. However, should there be a perception that the telcos do not act responsibly with a customers’ bill, this opportunity will dry out very quickly.

Aside from costing Vodafone a couple of million dollars, this also dents the credibility of the telco (and overall industry by association). This example suggests it is just as risky purchasing goods through the telco as it is an unknown supplier online.

Ofcom introduces text-to-switch

Thanks to Ofcom the days of being passed around a call-centre should theoretically be over, as new text-to-switch rules come into play.

Starting today (July 1) customers will be able to end mobile contracts simply by texting their provider. It’ll end an incredibly frustrating process used by all mobile operators to keep valuable post-paid customers from leaving their grasp.

It has been one of the biggest complaints against the telcos over the years; ending contracts is an incredibly painful process. While it might leave customers frustrated and infuriated, it does also help the telcos improve their churn. This is a system which is effectively loyalty through stubbornness, as the telcos enter a game of hide-and-seek with customers. It’s a competition of will and a perfect example of the telcos not understanding customer service.

“Breaking up with your mobile provider has never been easier thanks to Ofcom’s new rules,” said Lindsey Fussell, Ofcom’s Consumer Group Director. “You won’t need to have that awkward chat with your current provider to take advantage of the great deals available.”

Of course, while the majority of the telcos will be disappointed with the new rules, realising they will have to figure out new strategies to keep customers instead of forcing them into loyalty through the torture of hold-music, there will be some who are happy.

“I’m delighted that text-to-switch makes it easier and faster for everyone to get the best deal, helping people change to a new mobile provider with a few taps on their phone,” said Dave Dyson, CEO of Three.

“At Three, we’re making huge improvements to our 4G experience and preparing to launch the UK’s fastest 5G network, in more cities and towns than anyone else this year. This makes it the perfect time for people to consider the outstanding experience Three can offer, both now and in the future.”

Three might well be happy with the development considering the opportunity it has as we approach the era of 5G tariffs. Although the telco has not unveiled any pricing plans for 5G yet, the scene as been set for a disruptor to enter the fray and cause chaos.

EE has launched its 5G network and Vodafone is entering the small numbers in the countdown. Both have detailed tariffs on their websites, and both are charging a considerable premium for the pleasure of 5G. There is a massive opportunity for Three to undercut these two competitors on price, and with the new text-to-switch rules, it will be easier to lure potential subscriptions away.

In a perfect world, this text-to-switch initiative will force the telcos into a more customer-centric mind frame. Most businesses will tell you it is more profitable to cultivate customers first and chase new business second, but that have never really been the case for the telcos. Almost every business is geared towards acquisition first, leading the industry to its current position where it has one of the worst reputations for customer service and experience.

Perhaps these new rules will encourage the telcos to think about customers in a different way. The technology and data are certainly there to create a more valuable and informed customer experience, but only time will tell whether the telcos embrace it in the same way the OTTs do.

Monetising 5G is all about planning for the unexpected

Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this article, Niall Norton, CEO at Openet, explains why question marks over the operator business case for 5G should be a cause for excitement, rather than concern.

5G is now a commercial reality. South Korea and North America are leading the world in bringing this new technology to market, despite ongoing industry cynicism on the lack of obvious monetizable use cases or supporting business cases. In this respect, 5G is merely following the same narrative that accompanied the arrival of 3G and 4G. The iPhone saved the blushes of 3G, then 4G saved 3G by offering the true mobile broadband capability that 3G promised. The industry was equally in the dark on how ROI would be gained – the networks were built regardless, and the customers signed up.

The truth is, very few can say with any real certainty that they know how they will make money from 5G, or what real consumer intention to sign up will be. But that hasn’t prevented tremendous excitement building for the technology. A recent Telecoms.com survey of telecoms professionals, looking at forthcoming 5G opportunities, revealed that 71% of respondents think 5G will boost ARPU. What’s more, nearly a third think it will be boosted by more than a margin of 10%.

5G positivity is further reflected by the 5G landscape in early adopter markets like South Korea. Just 50 days after its commercial launch in April this year, South Korea announced it already had 600,000 5G subscribers. It now has more than one million registered users. With monthly tariffs starting around the US$40-$50 per month mark, Korean consumers are paying premium prices for what they perceive to be a premium service. In most cases, this is double the current average Korean tariff for 4G and is seeing early 5G users consume more than three times the data. SK Telecom, for one, is trying to push this by creating ‘around 8,000 different content offers spanning UHD video, AR and VR’ to its customers, pushing a strong customer experience improvement message.

This vast number of available offers from SK Telecom for potential new 5G services illustrates how many other operators are likely to monetise 5G. South Korea has always led the world when it comes to mobile technology innovation. They have strong operator momentum behind 5G, with the larger players all launching 5G services concurrently. They also have 5G devices thanks to Samsung and LG, and endless potential content partnerships with global third parties. With so much industry support, and endless possibilities in terms of technology capability, there’s little surprise they can generate so many different offers and create so much choice.

This is precisely where 5G excitement is being generated. The more available offers and services, the more chance at least some of them will take off and enable operators to recoup 5G investments. The same level of choice simply wasn’t available with the advent of 3G and 4G because their limited technical capabilities throttled it. With 5G, operators, OEMs, content providers and ecosystem partners can all hedge their bets more effectively. Furthermore, the operator 5G opportunity goes beyond direct to consumer propositions and spans the enterprise and wider vertical markets, especially with the rise of industrial and enterprise IoT services.

But enabling a wide variety of 5G service choice, across so many sectors and opportunities also has its challenges. If operators are to capitalise on 5G, they need to be fast, agile, flexible and extremely opportunistic. Unfortunately, these are not terms commonly used to describe the BSS solutions most operators are hoping to use to monetise 5G services. I heard one operator recently bemoan the fact it currently takes a month to create a single offer, and get it configured and set up through its existing billing and charging system. By that reckoning, it will take the same operator more than 600 years to emulate SK Telecom’s 8,000 5G offers. Not quite the time-to-market advantage they’ll be hoping for, especially given the anticipated short shelf lives of some proposed 5G services.

Fundamentally, operators need to have the flexibility and the confidence to set up and launch their own 5G offers and have the speed to react to changing market sentiments and conditions. They need to simplify and automate the ‘plumbing’ and reduce the need for additional technical intervention. This is how operators will best plan for the unexpected and maintain strong commitment to offering broad 5G service choice and sustain the excitement that surrounds its potential.

 

Niall_NortonNiall Norton has been Chief Executive Officer of Openet Telecom Limited since September 2006. He served as Chief Financial Officer of Openet Telecom Limited since joining in February 2004. He served as the Chief Financial Officer and Company Secretary of O2 (Ireland) where he was responsible for O2’s financial control functions, business process re-design, strategy planning and wholesale. He also took the lead management role for the Ireland element of the BT Wireless demerger and O2 IPO process. He has been a Director of Openet Telecom Limited since August 2006. Mr. Norton holds a degree in Commerce from University College Dublin and is a Fellow of the Institute of Chartered Accountants in Ireland.

O2 UK first to exploit fairness initiative with Overpayment Estimator

Ofcom has been pressuring UK MNOs to stop ripping off their customers at the end of their contracts and O2 has been the first to act.

One of the secrets of success if you work in a regulated industry is turning new regulations to your advantage. When they can get away with it all operators rip off their customers whenever they can, whether it’s exorbitant roaming fees, punitive charges for going over your allowance or failing to let you know when you’ve paid off your handset.

The smart MNOs are the ones that make a virtue out of doing what they’re compelled to by the regulator and that seems to be what O2 has done with the launch of its Overpayment Estimator. It’s actually a fairly rudimentary tool that just asks you about your current contract, tells you what you could save if you switch to O2 when it ends and then invites you to set a calendar reminder to switch to O2 when that happens.

The fact that this is even a thing is an indictment of how UK MNOs treat their own customers. It’s surely not beyond the capabilities of modern BSS to create an internal calendar marker at the start of a contract that automatically notifies them when it has finished and yet that often doesn’t happen. The only plausible explanation can be that they want their customers to keep paying over the odds and that’s not cool.

“It is simply not right that consumers across the UK are being charged for a phone they already own,” said Mark Evans, CEO of O2. “You wouldn’t keep giving money to your mortgage provider if you’d finished payments and owned your house – so why should it be that way for your phone? The mobile industry does not have the best track record on transparent billing practices.  Our Overpayment Estimator is another positive move towards changing that.”

O2 has something called ‘custom plans, which it says don’t charge customers for their phones once they’re paid off and automatically lower their bills. If some of its competitors are still doing that sort of thing then O2 deserves some credit for exploiting this window of opportunity while it’s still open. The technology presumably exists to only charge people for what they use, but there’s no point in trying to walk before you can crawl is there?

Ofcom’s latest ruling underlines the need for proactive personalisation

Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this article, Martin Morgan, VP Marketing, at Openet, considers the latest move from Ofcom in forcing UK operators to tell their customers when their contracts are ending, and points out why it is a blessing in disguise.

UK telecoms regulator Ofcom recently announced that it is to introduce rules to ensure broadband, TV and phone operators tell their customers when their contracts are coming to an end. This is intended to prevent consumers rolling back into largely uncompetitive ‘standard’ tariffs without them knowing. According to Ofcom, this practice typically sees UK consumers paying 20% more for the same service received during the initial term.

The end of consumer inertia?

Consumer inertia has always existed, across all industries in all countries. The fact remains that it is always easier to do nothing at the point of renewal, rather than shop around for the best deal. Times are changing, however. Telecoms operators, much like utility companies and financial services providers are having to endure consumer facing product comparison websites, a rise in third-party digital switching companies and generally, a greater consumer awareness of new offers. The truth is, it has never been easier for UK consumers to find and take a better deal from elsewhere. With Ofcom now forcing telecoms operators to tell customers it’s time to renew their tariffs, a lack of awareness will no longer be an obstacle to ‘shopping around.’

UK telecoms operators must embrace this significant opportunity. They must use the data they have on their customers to create targeted and personalised offers to them as renewal time approaches. If Ofcom forces operators to share the best deals available to their customers at the point of renewal, then this should be treated as the final link in the chain to encourage retention. The fact remains, operators will have a long window available to them, and have an individual usage and preference perspective on each customer that the competition won’t. This creates a significant window of opportunity for an operator to convince their customers that they truly value their business.

Coming out of the shadows

Telecoms operators in general have struggled to maintain brand awareness in recent years. Much has been said about operators being forced to accept utility-like status in the minds of their customers. Content providers, social media providers and OTT messaging communities hold most of the cards when it comes to mobile consumer engagement, with operators becoming an increasingly invisible part of the service value chain. This is incredibly surprising given that operators enjoy a regular monthly billing relationship with their customers, when most others don’t.

UK telecoms operators, much like their global peers, are looking to build or strengthen a series of partnerships with well known brands, to try and boost customer engagement and position themselves as the 5G operator of choice. These partnerships will include teaming up with content providers like Spotify, Netflix and Apple Music. They will include device partnerships with the likes of Apple and Samsung and, also include deals with the social media networks too. These partnerships will create differentiation but knowing where best to target this content and these services will be critical to drive the required levels of customer satisfaction and retention.

The technology exists to act

Operators have the data and the means to focus these offers to the right users at the right time. What is more, thanks to the agile and flexible nature of digital BSS technology, they can be quick to trial new offers, should some not have the desired impact at the first time of asking. Ofcom’s new rules will present UK consumers with more choice, while placing them in a buying mood – UK operators know exactly when this will take place for every one of their customers. Every customer that churns will herald a failure for operator marketing teams and underlying digital BSS technology. The solutions are available to help UK operators prevail. They must react positively to Ofcom’s rules and quickly, if they are to take full advantage of the enormous opportunity facing them.

 

openet-martin-morgan-BWMartin Morgan is the VP Marketing at Openet. With 30 years’ experience in mobile communications software, Martin has worked in mobile since the early days of the industry. He’s ran the marketing teams for several BSS companies and served on trade association and company boards. In that time, he’s spoken at over 50 telecoms conferences worldwide and had a similar number of articles published in the telecoms trade press and served on trade association and company boards. At Openet Martin is responsible for marketing thought leadership and market interaction.

Openet exec gets red-pilled, joins Matrixx

Marc Price, CTO for the Americas at BSS vendor Openet, has decided to find out how deep the rabbit-hole goes by defecting to competitor Matrixx Software.

He will get to travel a bit more in his new role at Global CTO for Matrixx and he had been at Openet for 15 years, so it was probably time for a change. The move will also allow  Matrixx Founder Dave Labuda to step away from the techie side of things and focus his attention entirely on some serious chief execing.

“Marc is a tremendous addition to Matrixx’s executive leadership team,” said Labuda. “His experience will be invaluable as we continue to scale the company. Marc’s vision and vast experience in the telecommunications market is renowned. He has played a leading role across three key eras in the telco market: the rise of competitive carriers; the establishment of the real time charging model; and the current process of digital transformation and subsequent move to hybrid clouds and IoT.”

“Matrixx is poised to lead the digital commerce revolution being ushered in with the advancement of cloud technology and the advent of 5G,” said Price. “I’m excited to join the team at such an important time to help accelerate Matrixx’s global growth. I am looking forward to working with the Matrixx team to help scale the company, driving Matrixx’s innovation to further accelerate our customers’ digital transformations.”

Openet and Matrixx aren’t just competing BSS vendors, they’re both trying to disrupt the market by presenting a more flexible, cloud-based approach to customer engagement for operators. They’re both fond of buzzwords such as ‘digital transformation’ and like to paint larger BSS competitors as slow and anachronistic. So culturally this should be a straightforward move for Price and, at least until they find his replacement, may mean a fair bit more work for Openet Founder and CTO Joe Hogan.

BSS – change and adapt, or die

Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this piece Tony Gillick, Tony is GVP Solutions Management at Openet, takes a look at the current state of the BSS business.

Recent news from Ericsson that it is spending SEK 6.1billion (approx. £530million) to restructure its BSS business comes as little surprise. Approaches to operator mobile service monetisation and underlying BSS has changed beyond recognition over the past few years. Traditional delivery mechanisms, when operators tied themselves to one major vendor for all its service monetisation needs are over – and the telecoms industry needs to accept it and move on.

The big bang approach to BSS transformation doesn’t work. For Ericsson to base their Revenue Manager solution on an end to end BSS stack that would replace existing legacy BSS was a brave move. The rewards could have been very high, but then again so were the risks.

Monetising new services is already going to be an uphill struggle for operators, adopting the right tools can make life all the more easy for them. These tools will see the overhaul of service delivery models and service architectures, and the brave adoption of new technologies and approaches. For the telecoms industry, such change is daunting and risky but more important than ever before.

A chance at survival

In today’s world, everywhere you turn there’s a vendor or an operator talking about change and the need to evolve. Yet, for many, it’s evident that the definition of digital transformation remains unclear. Operators and vendors must remove themselves from the echo-chamber in which they find themselves. They need to find a new source of truth, one that encourages and promotes innovation and new thinking, but also highlights their failings, and allows them to successfully explore the new trends driving industry change.

Doing this is tough, however. For the legacy operator, adapting to quickly evolving industry and consumer trends can prove daunting and complex, and very much out of their comfort zone. But today’s reality means that consumers are no longer prepared to wait for their operator to act and deliver the service they need. Consumers have little loyalty to their operator brand and will churn if they feel they aren’t getting value for money or the service they want, when they want it. At the same time, industry trends and the availability of cloud-native technologies is allowing new players, who previously had no skin in the telecoms game, to enter the market. In the face of these new entrants, who have a wealth of new applications and services to offer, legacy operators must take action if they are to have a chance of survival.

What does change look like?

Understanding what change really means is probably operators’ and vendors’ biggest challenge. Yet these answers can be easily found in the trends driving industry transformation.

Operators and vendors must change how they think about transformation. It’s not enough to simply adopt new technologies, operators and vendors must truly get behind the concepts such as open source technologies, and the sharing of new ideas and methods to drive innovation. According to a 2018 TM Forum industry survey, cultural obstacles are one of the biggest issues when it comes to encouraging transformation. Operators and vendors need to leave behind their legacy mindset and begin to embrace collaboration and partnerships. Allowing new relationships to flourish based on mutual understanding and benefit will help underpin digital transformation’s success. Operators just cannot afford to be shackled by their supplier, and similarly, vendors must have the trust of their operator customer to take risks and innovate through new technologies and approaches.

It is only through this cultural change and collaborative approach that operators and vendors will truly be able to leverage the capabilities of new technologies and approaches such as AI, microservices and DevOps. These approaches will be key to developing the platform-based tools and services that operators will need to deploy new offers rapidly, and monetize new services such as 5G and IoT.

The road to digital transformation success is a long and winding one, with many uncertainties along the way. Digital transformation cannot be seen as a destination or an end-goal, it’s an ever-evolving ‘thing’ that will continue to be so long as the industry exists. Operators and vendors have their work cut out to make change a reality, but it’s by learning from the failures of others, and embracing new thinking and new tools that the industry will truly change. In doing so, operators will start to reap the rewards of launching new services by seeing subscriber churn decrease and customer engagement increase. Ultimately, it’ll be the difference between them thriving and merely surviving.

 

CREATOR: gd-jpeg v1.0 (using IJG JPEG v80), quality = 82“Tony Gillick is the GVP Solutions Management for Openet. Previous to this Tony has headed up product management, solutions engineering and systems architecture for Openet. He’s been with Openet for more than 15 years and has managed BSS implementations for some of the leading service providers in the world.”

Success of 5G depends upon operators’ monetization and pricing strategies

Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this piece Shay Assaraf, CMO of Optiva takes a look at how operators can make the most of the 5G opportunity.

As headlines and advertisements increasingly tout the promise of 5G, it’s important that operators not fall for their own hype. While 5G certainly holds promise for creating new business models and service segments, realizing that promise depends, in large part, on the development and implementation of sound monetization and pricing strategies.

5G completely alters the way in which communication happens by improving throughput and reliability, lowering latency and increasing network robustness. Likewise, 5G alters what is communicated, enabling machine and device communications that underpin connected autonomous cars, smart cities and other next-gen applications. Furthermore, the dynamic and elastic nature of 5G requires operators to fully embrace and utilize the public cloud to support demand for those applications and decrease time to market for launching new, related services. As such, operators cannot and should not apply 4G thinking and 4G IT infrastructure to monetize 5G.

Instead, operators should visualize the types of 5G environments they want to support and then build a business case around it. Operators need to determine the applications they want to support and design ways in which they can deeply immerse customers into experiences and content. They should consider how customers will interact with each other, as well as with machines and devices, over the 5G network.

Throughout this process, consideration should be given to opportunities for monetization. Likewise, pricing strategies should be developed to address the unique nature of 5G offerings. Following are three key areas that operators should consider when developing such plans.

1. Monetize the network

5G enables operators to fully leverage their network and infrastructure capabilities to create new monetization opportunities, including:

  • Developing and selling premium service offerings that are charged and upsold based on quality of service (QoS).
  • Monetizing the mobile network to sell fixed wireless services.
  • Enabling developers to monetize applications that connect to devices, generating revenue from developers, as well as device end users.
  • Creating ecosystems with a variety of partnership opportunities and revenue-sharing models by leveraging infrastructure.

2. Monetize the slice

According to research from Gartner, the greatest revenue potential for 5G will be developed through network slicing, which supports multiple use cases, business models and services. Network slicing enables operators to create multiple virtual networks using a shared physical infrastructure. They can then tailor slices of the network to highly specific use cases and unique business requirements based on capacity, latency, quality of service (QoS), security and other variables.

Network slicing enables operators to deploy only those functions needed to support each customer and/or market segment, allowing them to differentiate through service customization. Slicing also enables “network as a service” offerings that enable operators to manage the slices independently and apply rules as needed. As such, operators can develop offerings for third-party tenants, wherein they maintain control over service deployment and operation and adjusting access according to each agreement.

For operators to truly monetize, the slice will require significant changes in business and operation support systems (B/OSS). Orchestration and Intelligent network functionality - managed in real time - will be key in the OSS layer to enable automated network operations. Meanwhile, the BSS layer requires more flexibility to rate and then charge in real time for a new wave of services for any account, customer, subscriber or user.

3. Monetize the enterprise market

While 5G enables operators to expand service offerings to consumers, the bigger opportunity is what 5G enables for enterprises, including applications for B2B, B2B2X and IoT market segments. For the B2B market, 5G enables mobility solutions and cloud services to SMEs and large corporations. In B2B2X markets, the concept of “customer” expands even more. For instance, an operator might provide high definition video services to a stadium operator that then sells the service to its premium customers, who are able to capture lost moments and referee decisions using virtual and augmented reality.

Likewise, operators glean great potential from monetizing enterprise applications for IoT. In fact, Gartner predicts that the enterprise market, as opposed to the consumer market, will account for more than 90 percent of the overall IoT services spend.

Determining the pricing model

As operators determine how they want to monetize 5G, consideration also should be given to pricing models for new products and services. Pricing models should include options for one-time charges, subscriptions, usage-based charges, “pay as you go” applications, freemium models and charges for application programming interfaces (APIs).

For operators to maximize ROI on their 5G investments, they need to clearly understand the costs and what they stand to gain from 5G transactions. It’s key to implement end-to-end real-time billing and charging to glean the most revenue for every interaction on the 5G network.

Without question, 5G networks enable vibrant use cases that are creating excitement and expectation for operator networks. However, a well-developed monetization and pricing strategy will enable operators to exceed the expectations of 5G, differentiate their service offerings and ensure future revenue.

 

Shay AssarafShay Assaraf is CMO of Optiva. He has a wealth of B2B and B2C experience in marketing and strategy with more than 15 years in the telecom industry. At Amdocs and before that with Pontis (acquired by Amdocs), Assaraf held various positions, and in his last role, he led the marketing consulting and analytics teams addressing customers’ challenges using analytical data, machine learning and artificial intelligence tools and expertise.

Ericsson calls BS on its full-stack BSS

Kit vendor Ericsson has started the year by writing down almost $700 million to account for the fact that its latest BSS efforts have turned out to be a non-starter.

Its Q4 numbers will feature costs of around SEK 6.1 billion related to the ‘reshaping’ of its BSS (Business Support System) business, half of which will be customer compensations and write-downs, and half of which will be restructuring charges. It looks like Ericsson has concluded this is the only way to get its struggling Digital Services division back on track.

“The company’s past BSS strategy included pursuing large transformation projects based on pre-integrated solutions, including development of a next generation BSS platform, the full-stack Revenue Manager,” said the announcement. “The strategy has not been successful and to date the full-stack Revenue Manager has not generated any revenues.

“The anticipated customer demand for a full-stack pre-integrated BSS solution has not materialized. Delays in product and feature development has also made the full-stack Revenue Manager less competitive. R&D resources in BSS have been focused on full-stack Revenue Manager, causing further delays in product releases of the established platform. In addition, certain complex transformation projects experienced delays and cost overruns.”

No revenues at all? Damn! You have to question the due diligence that ‘anticipated customer demand for a full-stack pre-integrated BSS solution,’ when none whatsoever materialised. Furthermore another SEK 1.5 billion will need to be accounted for over the course of this year, taking the total bill to around $860 billion. Ericsson does still see value in its established platform, Ericsson Digital BSS, which apparently has a decent installed base, so it’s not pulling out of BSS entirely.

A big part of Börje Ekholm’s strategy since he took over has been to dial back some of the over-reach that characterised the Vestberg era. “Ericsson is applying a selective approach to large transformation projects focusing on projects based on available products,” said the latest announcement, and it’s clear that Revenue Manager was just such a project. Ekholm deserves some credit for continuing to look facts in the face and take decisive action.

CMA backs super complaint against loyalty penalties

The Competition and Markets Authority (CMA) has backed a ‘super complaint’ raised by Citizens Advice which suggests UK consumers are being ripped off by loyalty penalties on services such as broadband.

The super complaint was raised by in September by Citizens Advice, asking the CMA to investigate whether customers were effectively being punished by service providers, so called stealth price rises for example. The areas being called into question were cash savings, mortgages, household insurance, mobile phone contracts and broadband.

The CMA agrees with the points raised by Citizens Advice, suggesting the segments in question gain £4 billion a year through ripping off loyal customers.

“Our work has uncovered a range of problems which leave people feeling ripped off, let down and frustrated,” said Andrea Coscelli, CEO of the CMA. “They shouldn’t have to be constantly ‘on guard’, spending hours searching for or negotiating a good deal, to avoid being trapped into bad value contracts or falling victim to stealth price rises.”

Looking specifically at the telcos, this is a frustrating point for many consumers. UK telcos show very little desire to reward customers, setting in processes and systems which make it impossible to leave. Many will give up on trying to navigate the red-tape maze as the poor experience proves to be favourable to the frustrations of trying to leave. By making this process as difficult as possible, the telcos don’t have to worry that much about retention and can instead focus on luring new customers.

The CMA has pointed this out during its own investigation, ensuring that one of the recommendations made to government and regulators will be to simplify the exiting process. This will intend to tackle the process, systems and the fees which customers face when attempting to secure a better deal.

It appears the telcos are much better at scaring customers away from exiting than enticing them to stay with positive customer service. Your correspondent can confirm this is the case after trying to end a Vodafone contract last year. It took a ridiculous amount of time, engagement with several staff who had no idea what they were doing (or was this trained in to make the process as painful as possible?) but the mission was stubbornly completed.

“We know that the better deals are often found by switching provider,” said Richard Neudegg, Head of Regulation at uSwitch.com. “But many companies make this more difficult by not being transparent enough about the options available or how to take your custom elsewhere. We are pleased to see the CMA identify this as an area for improvement, to ensure the power to get better deals is placed firmly in the hands of consumers.”

One specific complaints which has been firmly aimed at the telcos concerns subsidized handsets. The CMA highlights telcos should not be allowed to charge the same amount per month once the handset has been fully paid for. This will be a frustration from the consumer, but like the ridiculous nature of roaming fees, because the industry has stuck together little progress has been made.

Above all else, the CMA opinion adds to the already well-known position that telcos are not at all customer-centric organizations and have a lot to do if they want to be considered relevant for the digital economy.