New Services, new customers – a new, old challenge for the telco industry

The comms industry faces a variety of challenges to remain profitable – against a background of falling mobile handset sales and the move away from traditional calls revenue towards IP voice services. The key defence against this is by growing new revenue streams through enablement of new services to customers. And the common feature that these services need is higher bandwidth links to the customer.

Providing more bandwidth will invariably require some uplift in physical comms infrastructure, whether in the exchange, mobile mast deployment, roadside cabinets, the cables between them or the cables out to the end customer’s premises. Delivering this infrastructure is an expensive, complex process typically requiring (in the UK at least) coordination with Government agencies and numerous third parties. While the model may differ slightly between countries with an established fixed-line network and those which are more mobile based, similar challenges can be found.

As well as being the means to increased revenue, infrastructure build is a very expensive activity and, when managed poorly, one which can lead to a high degree of wasted investment. There are two headline metrics for this:

  1. The cost per end customer to deliver new infrastructure. This is typically around £400-500 per customer, but can be as high as £700-800
  2. The %age of spend which ends up in the ground, delivering services, as opposed to being wasted on management, rework or other cost of failure. Again, while the average is around 40-60% of investment actually being spent on infrastructure, some companies struggle to reach half this figure.

The efficient delivery of infrastructure depends on a well managed lifecycle, to:

  • identify the demand within a particular geography (a street, housing estate, exchange area)
  • prioritise the areas of high demand – those which will generate the greatest return on infrastructure investment
  • understand the “bill of materials” needed to deliver working infrastructure end-to-end
  • manage the build of this infrastructure to an efficient and timely completion
  • bring the new infrastructure into active use and be able to sell products and services to end customers, through it
  • maintaining an ongoing view of existing uptake and future demand to feed into the build plan

While it may be simple to think the customer’s concerns focus on straightforward purchasing a service once the infrastructure to support it is available, brand reputation and customer satisfaction can be impacted much earlier than this. Chief amongst these Moments That Matter to the customer will be a lack of communication during the build phase, especially over any delays that might arise which will impact the date when the promised service will be available.

At this stage, the customer’s expectations will be high. They will have been contacted by the telco to identify their interest in new services. They may have been offered promotional rates, as an inducement to sign up early to the new services. They will believe that any dates communicated to them are committed. As a bare minimum, it will be necessary to provide regular updates to the customer, reassuring them that work is progressing according to plan. In situations where delays arise, customers will value honesty and transparency over this with early visibility of issues and changes to plans.

As more companies move into infrastructure build, within the UK at least, customer experience will be impacted by a wider number of moving parts. Some telcos may take direct ownership of all aspects of the plan and build; some telcos will outsource some, or all of their plan and build activities to one, or more, third parties; while others will remain in the retail-only space, reliant on infrastructure built by other organisations.

Those companies managing, or controlling their own infrastructure build will want to ensure as much of their investment goes into service-delivering infrastructure to maximise return on investment and reach the greatest possible footprint.

In all of these scenarios, it will be vital to provide customer experience differentiation, through a tightly integrated stack which allows marketing data to drive planning decisions; planning to be efficiently allocated to labour teams; the progress of those labour teams to be closely monitored, optimised and reported on, both internally and to customers; and for revenue income to be maximised by efficient sales enablement.