Mobile communications
is a technology area that keeps on growing and innovating. According to a
recent Cisco report, mobile data volumes are more than doubling each year. By
2014, there will be 5bn mobile devices. Analyst firm Ovum recently reported
that in 2010, revenues from mobile data for European mobile operators exceeded
that for voice calls for the first time.

Innovation is rife.
Smartphones are completely changing the way that people use the internet. In
the last five years, smartphones have rewritten the rules – now, in a pocket
device, one has a phone, a camera, email, PDA, mapping with GPS, in some
countries a near field payment device, and of course, access to thousands of
applications. Morgan Stanley predicted that in 2012, shipments of smartphones would,
for the first time, exceed those for personal computers. They were wrong, in
fact – it happened last year.

Price and coverage

On the face of it
mobile operators should be happy. Subscriber bases and mobile data volumes are
growing. And yet, mobile operators don’t necessarily sleep easily in their
beds. Yes, innovation is everywhere, but most of the innovation (at least that
which is visible to end users) isn’t going on in the mobile operators – it’s
going on in the phones and the applications. End users are becoming more and
more divorced from the particular network they use and, certainly in developed
markets, operators primarily compete on two things only – price and coverage.

The growth of the
mobile Internet is pushing operators to the bottom of the value pile, and risks
leaving them as faceless utilities. This, in turn, leads to churn, a term used
to describe subscribers moving from one network to another. Churn rates for
mobile operators range from 20 -40 percent, meaning that between 20 and 40 percent
of subscribers will, per year, leave a network for another. Churn is expensive:
it’s estimated that recruiting a new customer can cost five times what it costs
to keep an existing customer.

Some mobile operators
are addressing this by becoming a lot more responsive to how subscribers are
using the network. Instead of trawling through call data records once per month
or per quarter to find trends and only then responding to a customer’s usage,
some of Progress’s customers are doing this in real-time.

To take a concrete
example, one European telco is now continuously monitoring calls from its 30m
subscribers to identify patterns of usage that indicate that a different tariff
would be more suitable for that subscriber. This could be as simple as noticing
that the number of bundled monthly minutes had been exceeded. A text message
could then be sent to the subscriber suggesting that they move to another
tariff that would reduce the cost of calls in future. Time is of the essence;
if the subscriber receives an offer soon after placing one of these calls, they
are far more likely to accept it than if the offer comes through many weeks
later.

Proactive text
message marketing campaigns can also become a lot more responsive. The mobile
operator may decide to run a campaign to, for example, promote a particular
tariff it thinks will be of interest to a subset of its subscriber base – those
people, for example, who spend more than £100 per month, and who roam
frequently. Sending out offers via text message requires great sensitivity, as
no operator wants its customers to feel they are receiving spam. As the
campaign executes, results can be monitored in real-time, and the target
demographic of the campaign can be tightened to achieve a better response rate.
Not only does this make the campaign more successful, but also, those
subscribers that, in the end, are not targeted, can become the target of a
future campaign.

Real-time analysis

To do this requires a
number of things. Firstly, software needs to be in place to allow the millions
of subscriber calls to be analysed in real-time – this is an ideal use case for
event processing. Secondly, there need to be tools which allow a marketing team
itself, working largely autonomously, without IT support, to create, test and dynamically
enhance the rules which dictate which subscribers will receive the offer. And
finally, positive responses to the offer need to be processed systematically
through an order management system.

There are many other
examples where responding quickly to subscriber activity can enhance a user’s
experience of using a particular mobile operator. As internet use becomes
dominated by mobile, it’s likely that variable costs for data access,
particularly where large downloads are concerned, will be introduced. The cost
of a download will be calculated dynamically, dependent upon the bandwidth
available within a particular cell at a particular time. At initiation of a
large download (let’s say greater than 1MB) the user could be prompted to ask
whether he would like to download it at twice the normal bandwidth for another
10p. This would be a dynamic rate, calculated in real-time, in response to
current activity in the wireless cell, and the propensity of the user to accept
the rate.

Another area where
telcos can improve on their responsiveness is on handling the orders that may
result from these marketing campaigns. Order fallout, where a placed order
becomes significantly delayed or, worse, disappears altogether, is a
significant problem.

 

 

Recently, Progress
conducted some research of our own, in conjunction with research firm Vanson
Bourne. We found that more than three-quarters of telcos didn’t feel that they
had good enough visibility into order management processes, and couldn’t
identify issues as they happened. Nearly 10 percent of IT budgets were being
spent on managing the consequences from order fallout. There’s a gap here
between the reality and the aspiration. Nearly all respondents felt that
responding in real-time to issues was important, and yet only a quarter can
adequately do that today.

Mobile operators
function in a growing, but rapidly-changing market, where users are becoming
more and more used to instant access to information. Real-time responsiveness
to customer behaviour is becoming vital. By becoming more responsive to
subscribers, networks can increase their value to them, enhancing customer
service, and reducing the likelihood of churn.

 

By Giles Nelson, deputy CTO, Progress Software
[email protected]