Are telecoms making enough investment in customer services?

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Indian telecom network operators such as Bharti Airtel, Idea Cellular, Reliance Communications, Vodafone, etc. have not disclosed much about their investment in improving customer services.

Telecom operators are keen to retain their subscriber base. India has more than 900 million mobile connections. In the recent past, Indian telecoms have taken more initiatives to reduce churn of mobile users by investing in improving quality of networks — especially when nationwide Mobile Number Portability (MNP) options are available to their subscribers.

In a report earlier the Credit rating agency, ICRA, had disclosed that the expanding data volumes have pressured networks, and the slowdown in Capex in network rollouts and upgradation had led to the overall deterioration in telecom services.

Bharti Airtel noted that the company’s monthly churn increased to 3.3 percent in March 2016 from 2.5 percent from March 2015.

Idea Cellular has a net MNP gain of 17.7 million customers from other telecom operators with one out of every four existing mobile customers, who chooses to port out from their existing mobile operator preferring to shift and stay with world class Idea services. Idea Cellular’s rivals are unable to meet these gains from MNP.

Recently, BT, a telecom operator in the UK, said it would be investing significantly for improving customer services. Vodafone Group plc is also making a similar move.

Latest research report published by NewVoiceMedia has revealed that U.S. companies are losing $62 billion a year due to poor customer service. The trend has seen a rise of 51 percent equal to a $20 billion increase from 2013. Though the report is not exclusively about telecom operators in the U.S., it indicates alarming signal to Indian mobile operators.

Complaints surge

India has more than 6 telecom operators per telecom circle. Customer service is becoming more relevant to retain their demanding mobile subscribers. Since telecoms need to retain / grow their ARPU without increasing the price of mobile services, investment in customer service is becoming a lifeline for telecoms. Complaints against mobile service providers have increased to 80,947 last year, up from 68,691 in 2014, reveals government reports, in India.

Telecom Minister Ravi Shankar Prasad conveyed that the Department of Telecom (DoT) has received 57,634 complaints in 2015 compared with 50,197 in the previous year, while complaints received by telecom regulator TRAI increased to 23,313 last year, as against 18,494 in 2014. The complaints range from grievances about bills, connectivity, mobile portability, harassment etc., against the mobile service providers.

As per the data shared by the minister, there is an increase in complaints received by DoT against operators like Airtel, BSNL, MTS and Videocon. However, complaints against Idea, MTNL, Reliance, Tata, Uninor and Vodafone have come down, meanwhile the complaints received by Telecom Regulatory Authority of India (TRAI) against all telecoms, barring Tata and Uninor, have increased.

The number of U.S. consumers disowning a service due to inadequate customer experiences was 49 percent against 44 percent in 2013. Additionally one third amongst these U.S. consumers reported having switched two or more times in the past year.

Customer care missing

Most of the Indian telecoms do not share investment figures for bolstering customer services. The following statements, which are part of their quarterly earnings, from telecoms’ CEOs do not reflect their investments in customer services.

Airtel India CEO Gopal Vittal said: “Our focus on network and customers has resulted in a strong year of 12.4 percent growth. Solid execution has resulted in an acceleration of revenue market share even as our non-mobile businesses continue to grow smartly and now contribute materially to the overall Airtel growth story.”

Idea Cellular has added VLR subscribers of 23.7 million against overall industry annual VLR subscriber growth at 73.3 million during fiscal 2015-16. Nearly 1 out of 3 Indian who buy new mobile connection, prefer Idea Cellular.

Telenor Group CEO Sigve Brekke said: “We connected more than five million new customers as we continue to improve our network and service quality across our footprint. With intense competition in several markets, driving profitable growth and keeping a close eye on costs continues to be a priority for me and my management across our European and Asian markets.”

Vodafone India CEO Sunil Sood said: “Last year, we embarked on an ambitious initiative to invest, modernize and expand our network to launch Vodafone SuperNet – providing a seamless voice and data experience for our customers.”

Vodafone Group CEO Vittorio Colao said: “We have concluded our Project Spring organic investment program. This has transformed the quality of our technology, enhancing our customers’ experience and enabling us to expand our Enterprise services. We will continue to invest in our customer excellence programs in both mobile and converged services.”

For Vodafone, investment in retail is one of the tools to improve customer services. It launched more than 160 Vodafone Stores and over 1000 Vodafone mini stores across India in FY 2014-15. With over 9800 stores, Vodafone has the largest exclusive retail footprint in telecom in India.

Vodafone India has created that enables the customers to get products and services. Vodafone supports customers through customer service call centre platform, My Vodafone Mobile App and Vodafone Live Chat.

Customer care facts

According to NewVoiceMedia, a huge proportion of the US respondents found calling to be a comfortable method of communication with a business with about 70 percent believing it to also be the quickest solution for their grievances.

Not being routed to a person directly, repetition of info to multiple agents, being put on hold and the process of browsing through multiple menus added to the customer dissatisfaction. On an average, 11 minute hold up time was summed up after which the customers would prefer hanging up. Other preferred medium for communication included email and social media.

After being subjected to poor customer service, 51 percent of the participants have their minds set on never using the offending company’s services again, while 38 percent of them preferred a change in suppliers.

Amongst these a 35 percent slot convey to have written a complaint email/letter, with 26 percent discouraging their friends and colleagues not to use the company, 23 percent posting an online review and 19 percent complaining publicly via social media.

Vina Krishnan
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