Virgin Media gives some smarts to wifi

Virgin Media has unveiled a new, ‘intelligent’, router which it claims will bring faster speeds to more areas of the home.

With the telco world becoming increasingly utilitised, and advertising authorities rightly cracking down on the ‘creative’ marketing claims, new ideas will certainly be needed to capture the attention of the increasingly demanding consumers. And in fairness to Virgin Media, this is not a bad attempt.

“Delivering ultrafast broadband to help make Britain faster is what we do best at Virgin Media but making sure this translates into reliable in-home connectivity is just as important,” said Richard Sinclair, Executive Director of Connectivity at Virgin Media

“Intelligent WiFi will allow our customers to make the most of their broadband while also helping to easily overcome any connectivity conundrums around the home. With families using more devices than ever before, it’s vital they can all be online whenever needed. Whether it’s streaming UHD movies on Netflix, playing the latest games online or video conferencing, Intelligent WiFi has your back.”

Starting with the intelligence side of the router, should the software work the way it’s supposed to, this could prove to be a very interesting addition. Firstly, Channel Optimisation allows the router to choose the least congested channel to decrease the likelihood of traffic jams. Secondly, a Band Steering feature allows devices to switch between 2.4GHz or 5GHz frequency to optimise performance. Finally, Airtime Fairness suggests bandwidth will be allocated between devices depending on the demands of that device.

The term ‘intelligence’ is thrown around relatively flimsily nowadays, though should the performance of these features be at the desired level, this could prove to be a very useful product.

 

And while the ‘intelligence’ aspects are more likely to enthuse those consumers who are more geekily orientated, a new app to manage the wifi experience is answers a lot of the simple bugbears and first-world problems of connectivity.

One example is sharing wifi passwords. It might not seem like a revolutionary idea but being able to log into the app and simply send the wifi password to a friend or guest will save customers from the inevitable digging around behind the TV. This is not necessarily a feature which will win customers for Virgin Media, but enough of these little quirky features will improve the customer experience and loyalty.

Another area which the app addresses is ubiquitous connectivity. Being connectivity everywhere and all-the-time is a necessity nowadays, though consumers are becoming increasingly cash conscious. Through the app, Virgin Media customers can now connect to any Virgin Media wifi hotspots, of which there are 3.5 million around the UK.

Most importantly for Virgin Media, this take the brand outside of the customers home, and allows the company to support customers through the entire day. This is Virgin Media adding value into the customer’s lives, going beyond the assumed perimeters of a home broadband provider.

“UK consumers have an insatiable appetite for data across a wide range of devices that will continue to grow over time,” said Paolo Pescatore of PP Foresight. “As well faster download speeds, consumers want a better and reliable connection in all parts of their home. This is starting to be a highly sought after service among users.”

BT has been playing in this market for some time, which offers Virgin Media a blueprint for success. Patchy performance and an irritating log-in process perhaps gave the BT wifi play a bad name, though progress has been made across the public wifi space in recent years. Hopefully Virgin Media will have learned these lessons.

With connectivity increasingly heading towards the dreaded limitations of utility, it is becoming increasingly important for telcos to prove they can add value to other aspects of the customers life. This is certainly an interesting play from Virgin Media and should the features work, Virgin Media goes some way in proving it is more than just a utility.

Telcos need to seriously think about how to sell to consumers

Following the news that Sky has been slapped on the wrist for misleading claims during a 2018 advertising campaign, marketers need to have a long and hard think about whether they are doing a good job.

The most recent assault against the marketing strategies of the telcos comes from the Advertising Standards Authority (ASA), with the group ruling Sky’s push to suggest customers would be able to receive stronger wifi signal throughout the house because of its routers, was misleading. The campaign features characters from ‘The Incredibles’ franchise, running across TV and through mainstream press.

The campaign was originally challenged by BT and Virgin Media, with both suggesting the claims were misleading as there was no way to substantiate the assertion. And the ASA agreed. In some cases, Sky’s router might be able to improve wifi signal throughout the home, but due to the breadth of different homes, each with their own structural design, it is an impossible claim to justify. The ad was far too generalist and deemed misleading.

“Unfortunately for Sky, its promise of a strong wifi signal all over your house has been shown to be misleading, and while it is by no means unique in falling foul of the ASA, it will be stung by this ruling the regulator has upheld against it,” said Dani Warner of uSwitch.com.

“Broadband providers are no longer allowed to make such exaggerated claims about potential speeds following the ASA’s major clampdown at the end of 2017, so they have had to become more imaginative in how they stand out from the pack with their advertising.”

This is an area the ASA has been quite hot on in recent years; telcos should not be allowed to make such generalist claims, intentionally misleading customers over performance. Especially in an age where advertising can be personalised on such a dramatic scale, at best it is lazy and incompetent, at worst it is directly and intentionally lying.

What is worth noting is that Sky can potentially boost signal throughout the home, though additional equipment would be required to make this possible. This is not mentioned during the advertising campaign however. The ASA ruled that some of the claims made in the ad could be substantiated, however it is no longer allowed to run in its current form.

Sky incredibles

This is of course not the only area where telcos are being challenged in the world of advertising. ‘Fibre’ claims are another, the ‘up-to’ metric has been removed and the telcos are being forced to detail speeds during peak times. Another factor to consider is the up-coming 5G service. Do any of the telcos have a clue how they are going to sell the service to consumers, as we do not believe the idea of ‘bigger, faster, meaner’ will not work, at least for the first few years.

Starting with the ‘up to’ claim, this is one which plagued the consumer for years. Masses of customers were duped into buying promised services which could only be delivered to a fraction. Thankfully, the ASA changed rules, forcing the telcos to be more accurate in how they communicate with potential customers.

Not only did this ruling mean the ‘up to’ claim had to be avoided, but it also forced the telcos to claim speeds during peak times. This also more readily informs the consumer of services which they are likely to experience, as opposed to the dreamland which most telcos seem to think we live in.

The term ‘fibre’ and ‘full-fibre’ has also been challenged, though telcos can still get away with some nefarious messaging. Irrelevant of whether there is fibre in the connection, and there generally always will be at some point, the ‘last mile’ is where the difference is made to broadband speeds. If it is copper, you will never get the same experience as fibre, however, telcos are still able to mention fibre in advertising.

The ASA has done some work to clear this up, in all fairness, though we still feel there is opportunity to abuse the trust of the consumer. And the telcos have shown that when there is an opportunity to be (1) at best lazy or (2) at worst directly misleading, they will take it.

The final area which we want to discuss takes us into the world of mobile and 5G. The telcos have always leant on the idea of ‘faster, bigger, meaner’ to sell new services to customers, or lure subscriptions away from competitors, but 5G presents a conundrum for the marketers; do consumer need faster speeds right now?

EE

4G delivers a good experience to most, and if it doesn’t, there generally is a good reason for this (i.e. congestion, interference, remote location, indoor etc.). 4G will continue to improve both in terms of speed and coverage over the next few years, and as it stands, there are few (if any) services which supersede what 4G is or will be capable of.

Another factor to consider is the price. Many consumers will want the fastest available, even if they don’t need it, but the premium placed on 5G contracts might be a stumbling block. EE has already hinted 5G will be more expensive than 4G, though details have not been released yet. In the handsets segment, consumers have shown they are more cash conscious, especially when there is little to gain through upgrades, and this is heading across to the tariffs space as purchasing savviness increases.

“I don’t think there are many great telco brands out there most consumers see them more as a utility,” said Ed Barton, Chief Analyst at Ovum. “T-Mobile USA is an exception with their customer champion, ‘un-carrier’ positioning but there no branding even approaching the effectiveness of, say, Apple’s.

“If 5G is sold only as a faster G, sales will be slow and it’s up to the entire ecosystem to create the apps, services and use cases which can only exist because of 5G network capabilities. These will probably rely on some combination of edge computing, high volume data transfer, low latency and maybe network slicing. An early use case is domestic broadband however as 5G networks evolve the use cases should proliferate relatively quickly.”

If consumers are becoming more cash conscious and have perfectly agreeable speeds on their 4G subscriptions, the old telco marketing playbook might have to be torn-up. The big question is whether the ideas are there to make the 5G dream work. Differentiation is key, but few telcos have shown any genuinely interesting ideas to differentiate.

Priority

One excellent example is over at O2 with its Priority initiative. Through partnerships with different brands, restaurants, gig venues and companies, customers are given freebies every week (a Nero coffee on a Tuesday) or special discounts periodically (£199 trip to Budapest). It leverages O2’s assets, the subscription base, allowing O2 to add value to both sides of the equation without monstrous expense. This has been a less prominent aspect of O2 advertising in recent years; perhaps the team is missing a trick.

Another, less successful, example of differentiation is getting involved with the content game. BT has been pursuing this avenue for years, though this expensive bet has seemingly been nothing more than a failure, with former CEO Gavin Patterson heading towards the door as a result.

This is not to say content cannot be a differentiator however. The content aggregator business model is one which leverages the exclusive relationship telcos have with their subscribers, streaming-lining the fragmented content landscape into a single window. Again, it uses assets which the telco already has, adding value to both sides of the equation. It also allows the telcos to get involved in the burgeoning content world without having to adopt a risky business model (content ownership) to challenge the existing and dominant members of the ecosystem.

In France, Orange is a making a place for ownership of the customers ‘smart ecosystem’, offering new services such as storage and security, while the same play is being made by Telefonica in South America through Aura. These offerings will offer differentiation, as well as an opportunity to make more revenues through third-party services. It’s a tough segment, as it will put them head-to-head with the likes of Google and Amazon’s digital assistants, but it is a differentiator.

By having these initiatives in place, marketers have something unique to go to market with, enticing consumers with promises which are genuinely different.

Three is a company which is taking a slightly different approach, hitting the consumers appetite for more data as opposed to speeds. Here, the team is leaning on ‘binge-watching’ trends, offering huge data bundles, but you have to wonder whether this is sustainable in the long-run when it comes to profitability and customer upgrades. There is only so long a company can persist in the ‘race to the bottom’.

Go Binge

“There are too many claims in an attempt to stand out in a crowded market,” said Paolo Pescatore, Tech, Media & Telco Analyst at PP Foresight.

“This is not the first time and wont be the last. It will only proliferate with the rollout of fibre broadband and 5G services. Consumers are happy to pay for the service they’ve signed up for, not to be misled. In essence, telcos are struggling to differentiate beyond connectivity. There’s a role for a provider to be novel and provide users with value through additional services and features.”

With the ASA chipping away at what marketers can and cannot say, as well as the traditional playbook becoming dated and irrelevant, telcos need to take a new approach to selling services to the consumer. The winners of tomorrow will not necessarily be the ones with the best network, O2 currently sits at the bottom of the rankings but has the largest market share in the UK, but the telco who can more effectively communicate with consumers.

5G offers an opportunity for telcos to think differently, as does the emergence of the smart ecosystem. Other product innovations, such as AI-driven routers, which can intelligently manage bandwidth allocation in the home, could be used as a differentiator, but it won’t be long before these become commonplace.

At the moment, all the bold claims being made by telcos, each competing the game of one-up-manship, are merging into white noise. The telcos have lost the trust of the consumer, many of which has cottoned onto the claims being nothing more than chest-beating. The telcos need to get smarter, and it will be interesting to see whether there are any unique approaches to capture the imagination of today’s cash conscious, technologically aware and savvy consumer.

Failure to do so, and the telcos might as well start calling themselves utilities.

AI and security sets us apart from the crowd – Google Cloud CEO

Google Cloud is not winning the cloud battle with AWS and Microsoft Azure right now, but with security credentials and artificial intelligence smarts, CEO Diane Greene thinks the future looks profitable.

Speaking at Google Next ’18 event in London, Greene claims superior security and industry-leading AI are differentiators for Google Cloud which will lead it to the top of the rankings. This is a business which is not shy about spending its way to success, the last 18 months have seen huge amounts spent on infrastructure to fuel momentum in the cloud business, but it’s the value which Google Cloud can add to operations, not simply a pricing war and availability, which is the recipe for success.

“We’re still early in the cloud, only 10% of workloads are in the cloud, but this is where all the digital transformation is coming from,” said Greene. “There are bottom line and top line benefits. Cloud is becoming a working structure to how you can enforce change in companies.”

“It’s our AI, data analytics and security. AI is everyone’s biggest opportunity, and cybersecurity is everyone’s biggest threat, and Google has the best of these. AI is built into everything we do, completely infused into G-Suite. This is such a powerful technology and we’re so proud to have the world’s leading experts. It has such a power for good but we see the concerns in the world.”

This is of course not a new message. Artificial intelligence has been a talking point for Google Cloud for some time but why is it different today? Because the cloud is now normalised.

Considering how long the concept of cloud computing has been around, and the money which is spent each year, it is amazing to think only 10% of workloads have been moved to the cloud and there are still organizations out there who are resisting. However, most enterprise-scale or forward-looking businesses are taking a cloud-first approach to business. This is evidence the cloud has been normalised, and suggests the industry could become commoditized before too long.

Commoditization is not necessarily a bad thing, especially when you look at the room for growth. With the likes of Google, AWS and Microsoft Azure offering massive scale, the commoditization business model works and it also makes the cloud more accessible for those who have not considered migration so far. Initiatives like the Data Transfer Project, which aims to standardize cloud environments to allow for easier migration of data from one provider to another, will also help rollout cloud everywhere else, but this also helps Google.

With the idea commoditized, Google Cloud can start focusing further up the value chain, leveraging the capabilities which it has in-house. Security is an excellent differentiator to bring customers into the fray, though the value-added services in data analytics and artificial intelligence could set Google apart from the crowd.

AirAsia is a good example, as Greene ushered CEO Tony Fernandez onto the stage during the keynote session. AirAsia has leveraged the power of the cloud to continually build his business, the airline now has 250 planes, 200,000 staff and will serve 90 million customers this year, but this year the focus is on enhancing the business with artificial intelligence. The team are working on several areas from predictive maintenance of aircraft, through to weather predictions to inform customers of potential delays, and also using facial recognition to improve the customer experience. This is where Google Cloud can prove its worth; the value add for customers who have already embraced the concept of cloud computing.

Through Deepmind Google has created an artificial intelligence foundation which can be rivalled by few in the technology world. Having acquired the company for roughly $500 million, a bargain in an era of multi-billion dollar acquisitions, the Oxford scientists are providing value throughout the Google universe. On top of this, Greene highlighted investments in Google Brain, a separate deep-learning research team, an Advanced Solutions Lab in Dublin, as well as AI training workshops in 20 European countries.

Google might be losing the battle to secure the commoditized cloud business, AWS is a clear and runaway winner here, though the value-add segment of cloud is starting to emerge. The opportunity to build more advanced solutions on top of a basic cloud-orientated business model is perhaps another segment which will certainly be attractive. This is a segment which will be defined by artificial intelligence.

AWS and Microsoft Azure are both eyeing up the AI world with their own investments, though Google has arguably put itself in the lead through years of acquisition and investment in product areas with an eye on tomorrow’s profitability. The long-game might be starting to pay off.

Netflix dominates the internet, but keep an eye on gaming geeks – Sandvine

Netflix currently accounts for an incredible proportion of global internet traffic, though the gaming segment is starting to throw its weight around.

According to research unveiled by Sandvine, The Global Internet Phenomena Report, Netflix now accounts for 15% of the total downstream volume of traffic across the entire internet. This is an astronomical number when you consider the service only has 130 million subscribers, a large number but some would perhaps has thought higher, while there are roughly 1.7 billion websites on the internet. Video on the whole accounted for 58% of the traffic meandering along the digital pavements.

Netflix, and video on the whole, dominating trends is not a new idea. This is something the telcos have been preparing for, though the gaming segment has been rarely discussed. Gaming has traditionally been reserved for very niche demographics, though with more content providers targeting mobile applications, the target audience has been increasing substantially, as has the depth and scale of the games themselves.

Looking at the contributions to the bottleneck, in Europe two of the top ten owners of downstream traffic volume are relating to gaming; PlayStation and Steam (focused on PC-based gaming). PC games can be as much as 100 GB in size, owning to consumer demands to make more larger and more immersive environments, though telcos would be wary of the continuing momentum for mobile games. With data becoming cheaper for the consumer and devices becoming more powerful, content developers are being encouraged to introduce mobile games which are more on par with those on other platforms. The sheer breadth, depth and variety of these titles on the app stores is quite staggering.

This of course will stress networks, especially considering many users of these games will use them when out and about, not connected to home broadband or public wifi. Ensuring these mobile games meet the demands of the consumer will be critical, as it may well soon become another stick to hit connectivity providers with.

Another interesting statistic to emerge from the data is the level of encryption. Sandvine estimates 50% of internet traffic is now encrypted, though this might be a conservative guess. The estimate only accounts for sources which are encrypted consistently, the number might well be higher, and it is certainly increasing. For consumers, this is a promising trend set against a backdrop of data privacy scandals and breaches, though it is an added complication for the telcos.

Encryption of course protects the consumer from wandering eyes with nefarious intentions, but it also prevents the telcos from keeping an eye on what is going on. Without visibility into what type of traffic is traversing the algorithmic piste, the telcos cannot tailor the delivery and enhance the experience for the consumer. The blame of poor experience might be thrown towards the telcos, but with encryption trends heading northwards, they are relatively helpless.

Consumers ‘cracking the code’ when it comes to smartphone purchases

Research from CCS Insight suggests consumers in France and the UK are becoming more savvy when purchasing devices, seeking more cost-effective options outside the telco channel.

From a financial viewpoint, moving away from the subsidized handset model would certainly be attractive for the telcos, though the consequence might well be shorter contract timeframes and increased customer churn. Should customers not have to stick to a 24 month contract to pay-off devices, the result could be more frequent searches for cheaper data tariffs. Losing this stickiness is not an ideal proposition for the telcos, though it could offer a chance to innovate and move out of the dreaded utility function.

According to CCS, more consumers are searching for alternative means to secure a smartphone. More than half of those on SIM-only contracts said they worked out that it would be better value to buy their phone and SIM card separately, with channels such as Amazon, eBay and Argos becoming increasingly popular. The research also demonstrates an increased appetite for second-hand and refurbished devices.

“We refer to this concept as ‘cracking the code’,” said Kester Mann of CCS Insight. “People now have a far greater understanding of the true value of the different parts of a mobile service. In the past they significantly underestimated the real worth of a smartphone, which was traditionally heavily subsidised and bundled into operators’ service plans.”

One in every ten mobile phone users in the UK said that their primary device is a second-hand model. The majority of the time these devices are sold or passed on between family and friends, while refurbished devices currently represent about 4% of the UK market with potential for growth.

The subsidised device model is one the industry has been edging away from for some time. There are of course consequences to refresh periods for customers, and with the cash-conscious consumer becoming more savvy on searching for deals, there is a risk of churn. However, by removing the subsidized devices from offers, telcos can concentrate on building value elsewhere.

O2’s Priority strategy is an excellent example of how value can be built into contracts with low-risk and high-reward. As a partner programme, the focus is placed on the wallet of the customer not O2. Relationships are developed with third parties, and a broad variety of discounts offered to customers. The customer experience is enhanced, value is offered and loyalty increased, but there is no cost to O2 aside from developing the platform and negotiating offers with third-parties on the behalf of customers.

This is a genuine value add which can be built into propositions once the idea of customers chasing the latest flagship for a subsidised price. There are of course risks, and there will be customers who desire the subsidised devices, but consumer trends separating the device from the SIM offers opportunities for telcos to create business models focus on experience and value, not simply throwing flagship devices on advertising boards.

DT turns to biometrics for authentication and fraud detection

Deutsche Telekom has selected Nuance’s biometric technology to help the team offer customers simplified authentication processes when calling the customer service hotline.

Once the inevitable bugs have been worked out of the system, customers will be able to speak their requests naturally instead of navigating a complex phone menu, while the sound of their voice can also be used to confirm their identity. It is still early days, but the cumbersome process of typing in long account numbers and trying to remember complex passwords with a capital letter, number, punctuation mark and human sacrifice, could be a thing of the past.

“We’re proud to be leading the way as the first German telecommunications provider to deploy voice biometrics on our service hotlines and making this advanced technology available to our customers,” said Ferri Abolhassan, Managing Director Service at Telekom Deutschland. “We can identify our customers quite simply and quickly by the sound of their voices and there will be no more time wasted searching for contract numbers. The procedure is one of the most secure available.”

As far as stereotypes go, the DT management team must be giddy imagining how efficiently calls will be directed around the customer service centre.

“It is no secret that consumers today have higher expectations and demands for the type of service they receive from the companies they do business with,” said Robert Weideman, GM of Nuance’s Enterprise Division. “Our conversational AI solutions enable Deutsche Telekom to power more natural customer service conversations and deliver individuals the help they need quickly and securely.”

Although there will of course be sceptical customers who will rigidly stick to the old cumbersome ways, those who embrace the technology will simply have to say ‘Bei der Telekom ist meine Stimme mein Passwort’ (which means ‘At Telekom my voice is my password’ in English) to identify themselves. It’s simple and efficient, the way customer services should be.

Voice biometrics work by digitizing a profile of a person’s speech to produce a stored model voice print. Each spoken work is reduces to segments composed of several dominant frequencies called formants, with each segment subsequently having several tones that can be captured in a digital format. The tones collectively identify the speaker’s unique voice print, which the Nuance technology will allocate to a specific customer.

Aside from reducing call times and improving the experience when attempting to find the right department, the technology can also help prevent fraud. The voice print itself is similar to a finger print in that they are unique to individuals. While no system is ever going to be 100% fool proof, the voice print certainly does sound more secure than security questions, the answers to which can be worked out by effectively profiling a potential victim.

AT&T is a company which has faced complications in this area recently. Michael Terpin is suing AT&T for $224 million following the theft of $23.8 million in cryptocurrency tokens which were transferred out of his account following a SIM swap con. To do this, the fraudsters would have had to gain access to Terpin’s account by answering the security questions. Getting around these questions has become somewhat easier in recent years, as more user information has become available through social media.

In theory, fraudsters could research what the answers would be by look at Facebook interests, employment history on LinkedIn or holiday snaps on Instagram. Security questions are hardly the most creative and this is an area most companies should look at addressing. Using a voice print to authenticate the identity of customers should remove a substantial amount of the risk associated with such con jobs.

While this is an interesting and useful development at DT, it is slightly behind on the times. Voice biometrics have been used by numerous organizations, with Royal Bank of Canada, Santander, TalkTalk, and Vodafone Turkey among those who have each enrolled more than 1 million customer voiceprints after implementation. That said, it is a nice development.

Postpaid or prepaid doesn’t matter if you nail experience – Three UK CEO

While many telcos are keen to convert customers to valuable postpaid contracts, Three CEO Dave Dyson doesn’t believe the type of payment is relevant, as long as you keep your customers happy.

“We are quite agnostic, so we just view it as a payment method,” said Dyson. “As long as you create a good customer experience you shouldn’t have to worry about the flight of customers. We’re very open to pay-as-you-go solutions on 5G.”

The comment came during a conversation with Telecoms.com as the telco reveals its financial results for the first half of 2018. While Three still sits in fourth place in terms of subscriptions, the numbers are looking healthy. Revenues were relatively flat year-on-year, demonstrating a satisfactory 2% increase to £1.19 billion, though subscriptions are growing. The first six months of 2018 saw a 6% jump, taking the total up to 10.1 million.

The increase in subscriptions also goes as far to explain the decrease in ARPU, which dropped from £18.79 to £17.97. Some might be worried about this statistic, though Dyson pointed out the boost in subscriptions compensated for this metric. For Three, it was important to keep subscriptions moving in the right direction, securing a customer base which can be monetized down the line. Looking forward there are plenty of opportunities to increase profitability.

One of these strategies relates to targeting new demographics for the firm. With the launch of brands like Smarty, which targets cash-conscious consumers, or a wholesale partnership with Superdrug is bringing new customers into the fray. These low-value, low data usage customers will dilute the revenues and data usage statistics of Three, but it is simply a means for the firm to continue grabbing market share from competitors.

Another interesting development is moving away from channel sales. Over the first six months, Dyson claims 99% of all handsets sold were through Three’s own channels, offering greater control over the monetization of these users, but also allowing Three to have more of a direct impact on customer experience. Again, this ties back to the post/prepaid argument, if you focus on creating a positive customer experience, you shouldn’t have to worry about strapping customers down with lengthy contracts. Gaining more control over distribution and the relationship with the customers, as well as seasonal demand increasing towards the end of the year with major handset launches, should see ARPU increase according to Dyson.

Of course, 5G is never far from the conversation either, and while Three boasts about it spectrum collection over the last couple of years, the team is remaining relatively tight-lipped over the launch day. Despite US telcos throwing caution to the wind when it comes to commercially sensitive information, UK operators are remaining coy. Three will switch on 5G mid-way through 2019, with plans to launch more trials towards the end of the year, but the fate of 5G is in the hands of the device manufacturers.

“We have all the components ready in the bag, so we will have trials up and running later this year,” said Dyson. “Availability of devices; this is key. Until the devices are there we are not going to make too much progress. Indication is that they will be around mid next year, but the smaller manufacturers might be sooner. We haven’t heard from Samsung or Apple, but they won’t be too far behind as they will be targeting the high value customer and won’t want to miss out.”

Interestingly enough, Three’s Fixed Wireless Access plans (FWA) might make it to the finishing line first. There isn’t a preference for either offering at Three, though FWA devices might be quicker to the market, allowing Three to move forward. In reality, the launch of mobile or FWA services will probably come at the same time, though fate is seemingly in the hands of the manufacturers.

With the 5G horizon getting closer, this is perhaps another reason Dyson and his team are not particularly worried about ARPU stats heading south. Although telcos are yet to reveal pricing strategies, it would be a fair assumption tariffs will be set as a premium, at least for the first months. With Three holding the largest spectrum portfolio for 5G in the UK, these statistics are likely to feature heavily in marketing campaigns. It might not be a bad bet to assume Three will edge its nose in front in the first couple of months.

The first six months of 2018 were nothing glorious for Three, though solid would be a fair description. ARPU seems to have been sacrificed for the moment in pursuit of new subscriptions, though whether this has any defining impact in the long-run remains to be seen. Dyson pointed to transformational projects in the core network with Nokia, while reformed IT systems should also improve customer experience. Combined with 5G trials, the next six months should be viewed as very important from an operational perspective for Three.

Three could still be viewed as a challenger in the UK telco space today, though 5G could certainly shake things up.

Who should take over as CEO of BT?

Gavin Patterson is on the way to the exit with what we can only assume is a healthy severance package, but now the question remains as to who should take over at the top of BT.

Some of the names being bounded around are as you would expect. Marc Allera has been rising quickly through the ranks as EE staff infiltrate the BT machine, current CFO Simon Lowth would be a safe bet for the board or maybe Nick Jeffrey could keep the metrosexual image of BT alive. But for us there are only a few names which can put BT back on the straight and narrow.

The next CEO at BT needs to have more of a technical or operational background. The next CEO needs to address the inadequacies of the business, namely improving the network and addressing its awful reputation for customer service. The next CEO needs to ignore the bells and whistles, instead focusing on what should be BT’s core mission of delivering a better connected experience. This is a message which seems to have been forgotten in recent years.

When looking at the frontrunners, Light Reading’s Iain Morris summed them up quite successfully here, anyone who comes from a marketing background should be discounted, look at the damage Patterson did to the business, as should financial, penny pinching will not help the situation. There are two names we would like to focus on and one which isn’t really being discussed at the moment; Clive Selly and Stephen Carter, plus Sharon White.

Selly, the current CEO of Openreach, is from the technology side of the business and slightly removed from the toxic fallout that is Patterson. Carter, current Informa CEO, has a wealth of experience in the telecoms business having worked for Ofcom, Alcatel Lucent and NTL in years gone, and has experience of running a FTSE100 business. White, current Ofcom CEO, would certainly help the telco smooth over a bumpy relationship with the regulator, and is a rare example of a female executive in the industry.

All three of these names are ones which could get BT back on track, focusing on delivering an excellent customer experience. It’s no surprise that the telcos focusing on content are struggling, while the likes of T-Mobile in the US and Orange in Europe are streaming into the digital economy with a focus on network investments. BT needs to look at these two companies and refocus on what should be at the heart of the organization; customer experience.

How about giving customers a better experience?

Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this piece Orla Power, Head of Marketing for Brite:Bill (an Amdocs company) explores some research into CSP customer expectations and what can be learned from it.

Mobile operators and the telecoms industry in general have never been known for excellent customer service and for many that’s an understatement. However, as generations Y and Z start paying for their own telecoms services, a new type of customer with different preferences and expectations is entering the market place.

We have found that this has presented operators with an opportunity to reset the customer relationship with these new customers. Typically, generation Y and Z are service- oriented customers who are willing to change providers frequently and will do so if they are not having a good experience. In addition, they want to interact in ways that suit them, utilising all available channels. They value increased personalisation and being recognised as an individual with specific preferences.

This is all very different from the traditional telecoms approach of communicating via traditional monthly – most likely paper – bills and offering a call centre interaction for those who are prepared to wait. Now, the interaction is multi-channel and much more aligned to the rapid resolution of customer issues and desires.

Yet, we know that operators are still in the process of transforming their systems to enable them to serve customers effectively and all too often the integration points fail to work smoothly, giving customers inconsistent experiences and exposing operators to the risk of customers leaving at key churn points in the customer relationship.

Brite:Bill has recently conducted extensive research with our operator customers across the world and, as part of this, we gathered valuable insights from respondents. Key challenges that were highlighted from the research are similar to the issues we here from the Communications Service Providers (CSPs), including the existence of various churn points. Among these, operators were keen to point out that customers receiving their first bill can be a churn point.  It’s one they are aware of and can quickly address if the customer feels the first bill doesn’t match their expectations.

Another key issue is the lack of personalisation in customer on-boarding communications. For customers that have been promised a tailored, personalised experience, receiving what are clearly standardardised form communications, using this less-favoured channel is an obvious source of discontent.

This is also highlighted in inconsistencies between the customer acquisition process and the on-boarding process. In the retail environment, the operator communicated its brand values as an exciting digital enabler and its capabilities to meet the needs of individuals. If the on-boarding resembles the experience your parents had getting a 2G voice phone in 1999, it’s clear there’s a gap between the promise made and the reality delivered.

Further irritations that CSPs are aware of at this early phase include the variety of different operator systems sending disparate notifications to customers. Some may be duplicated across channels such as SMS and email, while others might be about the same issue but use a different tone of voice or be untimely, for instance, telling them their router is on its way when, in fact it has already been installed.

These issues highlight the on-boarding challenges that operators face and clearly demonstrate the scale and scope of the customer communications challenges. In our research, we uncovered that 36 per cent of customers have switched operators in the last two years and, of those, 16 per cent switched because of billing issues. In saturated markets that’s a big issue and we estimate that for an operator with ten million subscribers the cost of churn is likely to be more than US$400 million.

This churn is not necessarily because the bill itself is wrong, it may be that the costs outlined are not clear to understand or the likely costs had not been properly explained at the time of sign-up. Our research uncovered that 68 per cent of customers say their bill is not clear or easy to understand. This has led to almost one-third of customers contacting their CSP because of billing issues.

More concerning, 18 per cent of customers said their first bill was more than they expected, causing the relationship to get off on the wrong foot and creating a climate of mistrust around the entire relationship. The fact that customers are still being surprised by the cost of their services and feel the need to interact with the call centre is costing operators significantly – both in the cost of call centre operations and in the likely increased churn because of dissatisfaction.

Our research also found that three quarters of customers currently have no interest in the information provided in their bill. However, this doesn’t mean they aren’t interested in receiving additional, relevant information via this channel. 56 per cent of customers want their bill to tell them how to save money while 29 per cent want the bill to tell them about relevant services.

Ultimately, customers want to receive the more personalised experience they get from other types of service providers. 29 per cent want their bill to include interactive graphs and icons so they can monitor and manage their consumption and 44 per cent want the bill to include what services they are spending the most or least on.

New technology, such as chatbots, will add another channel and dimension to customer communications and the bill will cease to be a static communication that simply states costs incurred. 39 per cent of customers say they would like access to a chatbot for bill enquiries, which rises to 50 per cent for generation Z customers, and almost a third (29 per cent) of all respondents think chatbots are a good alternative to a customer care line.

The new customer is enthusiastic and engaged, looking for more personalised relationships with their operators. As growth from new customers slows in saturated markets, the exciting news is operators already have valuable information about their customers and the tools in place to better serve them. They just need to utilise these more effectively to transform communications with the clarity and personalisation that customers expect.