Tag Archives: telco

A ‘brand’ view of the telecoms industry

Tim Pritchard, Kantar TNS at the Great Telco Debate

In the spirit of getting outside perspectives on the evolving telecoms market, Tim Pritchard from Kantar TNS, the WPP company which is the largest custom research business in the world, joined the Great Telco Debate on the role of telecoms in the digital economy. The brand perspective raised some very interesting and contradicting themes:

GTD17_027

  • The customer is changing. Traditional segmentation is no longer valid. ‘Generation CX’ (young, old, educated, working class – a slice of everyone) is the new reality and brands either listen and respond to customer feedback or risk becoming irrelevant.
  • It is widely accepted that customer loyalty drives profitable revenue growth. As such, customer experience (CX) is non-negotiable. But how does it fit in with today’s telecoms ‘product’ given the world of apps and over-the-top content consumption?
  • Corporate mission statements and brand values tend not to include the customer – you’ll be amazed how few companies, even those spending tens of millions each year on CX, have an agreed customer strategy. Get it written down and socialised across the business so that everyone from the janitor to the CEO knows it, and uses it to frame their work, their thinking, and their daily behaviour.
  • WPP’s 2017 Global BrandZ  shows that 8 of the world’s most valuable 50 brands are telcos. A further 15 are technology companies. You’ve had the power for a long time, but have you leveraged that power? I would say not.
  • Most Telcos have adopted NPS (Net Promoter System) yet their NPS scores are among the lowest of any industry. Virtual network providers often enter markets and quickly start to outperform the network owners, sometimes by as much as 20-30 NPS points. It shouldn’t be that easy – there is something clearly amiss among incumbent telcos to afford disruptor brands that opportunity to create true CX differentiation.
  • A focus on self-serve business models may help to save telcos money but, aside from the customer groups who actively prefer to self-serve, tend to harm rather than enhance brand building efforts.
  • The customer voice is vital, and capturing customer feedback on specific interactions (preferably in real-time) provides critical input for both tactical response and strategy development, as well as brand building

There are 3 basic rules:

  • Don’t let customer down, especially at critical times (i.e. the moments that really matter)
  • Deliver emotional and functional experiences that stimulate long-lasting feelings for the brand
  • Do things that reinforce brand choice and deliver services to customers in a personal, relevant, and needs-satisfying manner

In short, the role of brand is changing with the digital market. Telcos and tech companies benefit hugely from high brand valuations yet typically suffer from poor customer service, reflected in low NPS scores. Part of the challenge is identifying what role the telco plays in the lives of ‘Generation CX’. Identifying, enunciating and promoting a clear customer strategy is vital to re-positioning the telco for the coming generations.

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An Economist’s perspective on the future of telecoms

Getting external perspectives always adds to the richness of the Great Telco Debate.  Mark Gregory, Chief Economist at EY in London and I discussed the economic realities of telecoms and the digital economy going forward. Here are the key themes that emerged:

  • Measuring productivity in traditional economic terms has been challenged by the Gig economy and its processes: ubiquitous connectivity is destroying traditional value such as in the taxi, hotel or retail markets but is creating new value as different parties are brought together on the exploding number of platforms for consumer and business use
  • ‘Digital’ was formerly about hidden components such as semi-conductors, servers and 3D printing. It’s now all pervasive and, from an economist’s perspective, it’s about how all industries work, the potential impact of technology and where value is created
  • The potential ubiquity of ultra broadband diminishes the relative value of connectivity since scarcity tends to create value
  • Telecoms is in the group of General Purpose Technologies (GPT) as described by Robert Gordon in his assessment of the impact of IT on productivity. It may be a disproportionately important enabler in a more digital world, but it is nonetheless an enabler
  • Telecoms (broadband) should have a relatively bigger role going forward but that depends on how it evolves and how it allows other industries to evolve
  • Telecoms first of all has to deliver its role into the digital economy as an enabler. Moves into content delivery and other services have been only variously successful
  • Telecoms must think about how it can enable other value chains rather than dominate them by underpinning new processes and allowing new apps to flourish.
  • Politics is becoming extremely important for the future of telecoms. Regulators have to get out of the mindset of capping prices if they are going to allow the telecoms industry to evolve into its new digital economy support role. The telcos have to be able to benefit in terms of value capture if they are going to be incentivised to invest for the future.
  • 5G is what some of the financial community are most worried about in terms of another big chunk of investment being required.
  • Digital skills are important as automation shifts the focus for human roles in the digital economy
  • As we look at Brexit some sectors are clearly going to be impacted:
    • Financial services and Life Sciences because of the regulatory environment.
    • Automotive could be impacted but this is still not clear
    • Telecoms does not appear to be in the high impact category.
    • Data protection will be a major focus given European regulation.
    • The labour force is the one to keep an eye on – digital skills and a more flexible work force capable of coping with the the dynamics of a digital market will be vital.

Here is the full interview:

Keep November 29th 2018 free for the next Great Telco Debate. If you have topics you think are shaping the future of the industry and would like to contribute as an ‘expert witness’ please drop me a line.

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The future Telco CIO: Serving whom & delivering what?

Whenever discussing telco CIOs I set the following challenge: “Think of a chart with Stalin to the Dali Lama on the X axis; and a Server and a business suit on the Y axis. Where do you plot yourself or your CIO client?”

STalin

After the initial groans of recognition of the problem, the concensus tends to be that historically, the majority of CIOs have been in the lower left hand quadrant: These Stalinist Server Huggers have been trying to control the technology being used to build the network, as well as how the network is used and what is allowed onto it. This is an engineering and network-centric view of the world. Many factors are shifting the focus upwards and right towards the crossover point of the 2 axis, driven by:

  • The convergence between network and IT
  • A more software-centric view of the telco future
  • Virtualisation, Consumerisation and managed services
  • A new flexible business model

Moving to the top right (to a business laissez faire attitude) would lead to mayhem. There is no doubt that a degree of control is required in this shifting world, but it must not lead to a restricted offering internally or externally.

Shaping the network and the IT systems supporting it to reflect the changing world needs a fundamentally different approach from Management. No longer can the telco dictate the types of services or usage patterns that its ultimate customers adopt. Indeed, the necessity to allow for ever-shifting eco systems of partners and channels means that this new ICT infrastructure has got to be manageable to the nth degree on a cost efficient basis.

The knock-on effect on the role of the telco CIO is radical:

Firstly, is it a CTO or CIO issue? Telcos have traditionally held the CTO role as being above that of the CIO.  As we shift towards a software-oriented telco this cannot continue. The interrelationship between all of the IT systems, network operations and ultimate customer service have got to be viewed holistically, hence the CIO takes the upper hand. Or is that true? Given the changing nature of the telco itself and the different Lines Of Business (LOBs) and their relative power, perhaps the CIO ends up subservient to the LOBs and their need to get services more closely matched with their differing customer bases.

Secondly, the CIO has a changing set of relationships with suppliers. The all-IP network and the importance of the data centre mean sacrifices have to be made.  Fewer suppliers is a goal for most. Turning equipment and software into services to be purchased is a realistic target for the CIO. The emergence of cloud-based offerings mean that the CIO can source building blocks for the network and the IT infrastructure on a much more flexible and cost efficient basis.

So, what should the CIO concentrate on?

The fact of the matter is that everything is tending towards software and a virtual environment. Hence the telco CIO needs a very different set of skills. Should the network engineer-oriented  or IT services-oriented C-level be in charge? Probably neither, unless they can truly embrace the shifting demands coming from the business as a whole and the Lines of Business (LOBs).

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