Providing greater transparency about mobile usage and implementing tiered plans and alerts should not be viewed as merely a compliance issue for CSPs; they should take this opportunity to reconnect with their subscribers, says Redknee's Humera Malik
The summer is upon us here in the Northern Hemisphere. This is a time when consumers throughout the markets of Europe, North America and Asia will travel on vacation away from the certainty of tariffs in their domestic markets into the great unknown of roaming zones.
This summer also coincides with the quadrennial FIFA World Cup in South Africa - arguably the first World Cup to occur in a climate of ubiquitous heavy data usage. Throughout June and early July, the world's media focused on South Africa, and the coverage and hype led to unprecedented levels of cellular data traffic as football-hungry travellers everywhere kept up with events in South Africa and relayed information to friends, family and colleagues back home.
This summer represents a fantastic opportunity for communication service providers everywhere to maximise revenues via value-added data services. It will also, almost inevitably, result in consumers paying more than they would have anticipated for services they have grown to love and rely upon.
Mobile subscribers in markets with flat-rate models have grown used to consuming data and not worrying about the bill. But now as carriers are implementing tiered and usage-based price plans, we could start seeing familiar stories in the media about subscribers being sent extraordinarily high invoices and being sent into paroxysms of despair due to a condition known widely as "bill shock". Transparent and real-time communication between a CSP and its customers is of paramount importance in the changing paradigm from flat-rate price plans to usage-based plans.
Bill shock is not just bad PR waiting to happen; it is also likely to be widely regulated against. Authorities in the EU announced plans to insist CSPs warn customers of approaching and impending bill shock when they reach 80/100% of their data allowance. Meanwhile, US regulator the FCC, has opened a public consultation paper on how it should protect wireless consumers from bill shock and it is expected that many more regulatory authorities will follow suit in the near future.
Providing subscribers with greater transparency about their usage and implementing tiered plans and alerts should not be viewed as merely a compliance issue for CSPs; operators should take this opportunity to reconnect with their subscribers while they are at home and abroad. While usage control notifications are a first step towards bridging the gap, the value of real-time communication lies in its ability to underpin a CSP's data monetisation strategy to not only deepen relationships with their subscribers but to grow them into profitable ones.
As the telecoms market is going through transformation, from access layer to subscriber services, an underlying focus for service providers is how to better manage the customer experience. Key factors to enhancing the customer experience are the delivery of charging transparency and empowering the customer to control their services and subsequent bills.
The urgency for more transparency and control over the delivery channel is twofold. As networks evolve towards 3G and beyond (HSPA+, LTE) and content and applications are delivered through various channels, service providers are no longer a one-stop shop for telecoms services. While this opens the marketplace for new services it also increases complexity and confusion for subscribers.
In addition, the attention by regulatory bodies across the globe to protect from bill shock and empower consumers means that service providers must ensure access to relevant information about their communications services. This further demonstrates how transparency and control will be increasingly imperative to subscribers across the globe.
The lack of transparency and control over wireless services has already resulted in regulatory intervention across the globe, as exemplified by the "network neutrality" and "fair use" debates and the roaming regulations already implemented by the European Union.
These regulations along with rising data traffic and mobile broadband growth are creating a land of opportunity for service providers to exploit in order to combat falling ARPU. Through real-time communication and empowering customer interaction, service providers can achieve the next level of innovation by creating a two-way relationship with their subscribers to not only get a better understanding of their needs, but also to provide subscribers with more control.
From a subscriber's perspective this enables them to make informed decisions about modifying price plans, bill payments, third-party applications and service payments. However, in order for operators to achieve this, the service provider's environment needs to manage the lifecycle of the subscriber.
Currently, the majority of the network elements in a service provider's environment still manage the lifecycle of a service as an entity. The systems can handle batch-billing, but not rating or analysis of consumed services, nor can they intelligently analyse subscriber habits.
This creates a challenge as the fulfilment, billing and service delivery channels are not interconnected to provide a holistic view of the subscriber and therefore cannot prevent the bill shock phenomenon occurring, which creates an unwanted experience and drives churn.
In order to create a successful business model that helps enhance the customer experience, drives data services adoption and monetises third-party applications and services it is imperative to create an environment of real-time systems for subscriber and service management.
There is huge value in disseminating this real-time data and having true transparency of the subscriber's behaviour. The value is driven through real-time convergent charging and billing solutions that provide an instant view of user communication, behaviour and spending. These systems enable real-time IP traffic management to provide detailed views of an individual subscriber's Web and data service usage patterns.
In addition, it provides real-time user profile management, which enables knowledge of user status, presence and location. Leveraging a multitude of these attributes, service providers can deliver a contextually relevant service to their subscribers and also create the opportunity to upsell and cross sell services.
Underscoring this new business model must be a real-time rating, charging, and policy management solution for mobile data services that enables operators to rate and charge for all their data services, including in-demand offerings such as mobile broadband and mobile TV. This in turn helps them to monetise these new services and drive ARPU growth. It must provide service providers with the flexibility to charge for these services in ways that work best for their subscribers, whether prepaid, postpaid, or a hybrid of both - and based on time or bandwidth consumed.
From a regulatory perspective, these real time systems help institute usage alerts and cut-off mechanisms. Already implemented in the EU, in the near future these will be required by FCC regulations to provide a way for wireless voice, text, and data consumers in the US to monitor, on a real-time basis, their usage of a wireless communications service, as well as the various charges they may incur in connection with such usage (for example, roaming services, voice service "minute plans", text message plans).
In summary, transparency and real-time subscriber-centric controls are opening up the way to monetising all content that flows through the operator's pipe.
By being able to analyse the service usage and subscriber behaviour in real-time, service providers are able to retain value against the network services, rather than relying on handset manufacturers to deliver value. This leads to the creation of targeted and segmented services for their subscribers, and the provision of a far more personalised service experience.
Humera Malik is Director Global Marketing at Redknee