Bangkok--9 Oct--Weber Shandwick
By Mr. Yanyong Tengtichaowalit, Sales Director, Amdocs, Thailand with Contribution from Amdocs’ Market Insight & Strategy Team
You don’t have to be a fortune teller to predict that data and video traffic will continue to grow exponentially over the next 12 months or that the number of people enjoying LTE will skyrocket over the next couple of years.
But what’s much harder to predict are the implications for service providers of this growing demand for data services, and what they need to do to reap all the associated benefits.
As of March 2014, smartphone penetration in Southeast Asia stood at 12%, which is up 70 percent year-over-year. At the same time, data ARPU averages approximately 40% of total ARPU, up from 35% a year ago[1].
Market research company Nielsen found that “in Southeast Asia alone, smartphone owners spend on average more than three hours per day on their smartphones … with activities such as chat apps, social networking and entertainment activities like games and multimedia driving the highest levels of engagement.[2]”
Taking note of the popularity of over-the-top (OTT) services, service providers are now bundling OTT services such as LINE, Facebook and WhatsApp into their own offerings to drive smartphone and data adoption. Some are even looking at deploying their own OTT services.
These trends are evident in Thailand: In the last quarter ending June 2014, Thailand’s mobile service providers saw data revenue grow approximately 25 percent year-over-year, with data revenue, including SMS, now constituting 44 percent of total revenue – up from 42 percent in the previous quarter. Smartphone penetration at the end of March stood at 26 percent, representing a 33 percent increase year-over-year. LTE has been delayed for now, but that won’t stop the growth of Thai data consumption.
And a recent Telenor-TNS survey[3] shows that young mobile Internet users in Thailand have quickly taken to new mobile Internet services, and choose to communicate across a range of various platforms – apps, social media, and voice; even overtaking their Scandinavian peers.
To keep pace with these trends, service providers need to find new ways to harness this increasing hunger for data – and monetize it, while of course, providing their customers with a clear picture of their data usage and roaming charges. This, in order to avoid scenarios such as the bill shock example of the woman whose son ran up a 200,000 baht ($6,160) bill for apps purchased while playing “Cookie Run” on her smartphone. While the service provider in question ultimately acted to prevent future occurrences via their network, it highlights the importance of having systems that enable service providers to warn customers they are about to exceed their usage allowance and so resolve issues before they get out of hand.
OTT providers are already incorporating monetization into their strategies through targeted ads, with the most recent and successful example being LINE’s flash sales last December, which saw brands reaching out to mobile customers with new products and discounts via the LINE app. Flash sales had 20,000 people shopping and browsing at one time[4]!
By capturing more customer data and then using analytics to offer a proactive and contextual experience, service providers can then promote more enhanced services relevant to the individual subscriber. Furthermore, service providers will be able to provide improved customer care by proactively managing relationships with their customers.
Moving to an omni-channel strategy
The next step for improved monetization is to make the omni-channel experience a priority, following the example of leading retail vendors. For example, Vodafone CEO Vittorio Colao has said, "Vodafone wants to be the Amazon of telcos," not in terms of selling but rather top-class customer service.
Service providers need to integrate their different channels, allowing customers to interact with them via the customer’s preferred channel, and enable customers to continue this interaction from one channel to another seamlessly. For example, if I want to change my data package, I want to be able to do the research on my PC at the office, save a draft order in my shopping cart, think about it on the way home, making changes to the order on my smartphone and then finally make my purchase from my tablet later in the evening, without having to start all over again from scratch. It’s all about simplifying the customer experience.
And if for some reason the system fails, then, at least when the subscriber calls the customer care center, the agent will have the details of the customer’s latest actions on their screen, saving the subscriber the exasperation of having to explain the whole process from beginning to end, as well as reducing the average call handling time.
Optimizing network and IT assets
As noted earlier, data traffic is expanding at dizzying rates, powered by the rising tide of video, and highlighted by the growing increase in cross-screen viewing and service providers’ TV-everywhere strategies (for example, enabling customers to start watching a movie at home on TV and continue watching it on a tablet while travelling on the train to work).
To support such experiences, and other new innovative data services, operators need to seriously think about how they are going to optimize their network and IT assets. Clearly, this will require better integration between the network and the service provider’s business support systems, with policy control and real-time charging key to successful monetization.
Another challenge is maintaining the customer experience. Service providers must strive to ensure that their subscribers enjoy the same level of quality of service across various networks (Wi-Fi, 3G, LTE). A customer who begins watching a movie on a tablet at a café will demand comparable quality of service to that as on their car’s multimedia player. To achieve this, service providers will need to integrate all the different types of networks involved (e.g. small cells, Wi-Fi, wireless, etc.).
But integration of these heterogeneous networks (HetNets) raises the difficult challenge of large-scale network planning, deployment and optimization, as well as session continuity, quality of service assurance and security. With such high stakes however, addressing this challenge will remain a high priority for service providers.
With consumer demand becoming ever more insatiable, data certainly is making the service provider world go round. To reap the full benefits and monetize these new trends, service providers will need to tap into customer data to provide targeted promotions and personalized, relevant offers, prioritize omni-channel strategies for a seamless customer experience and use network optimization to ensure a high quality of service, regardless of the network or device in use.
[1] Countries: Bangladesh, China, India, Indonesia, S. Korea, Malaysia, Pakistan, Philippines, Taiwan, and Thailand. Source: Bank of America Merrill Lynch. Global Wireless Matrix 2Q14. July 2014.
[2] Nielsen. The Asian Mobile Consumer Decoded. Jan. 14, 2014. http://www.nielsen.com/ph/en/insights/news/2014/asian-mobile-consumers.html
[3] CIO-Asia.com. Malaysians and Thais 'surpass even Scandinavia in mobile Internet use', Telenor finds. August 21, 2014. http://www.cio-asia.com/tech/mobile-and-wireless/malaysians-and-thais-surpass-even-scandinavia-in-mobile-internet-use-telenor-finds/#sthash.D1ulPXxP.dpuf
[4] E27.co. Is Thailand a hotbed for m-commerce? LINE’s flash sales data says yes. Feb. 8, 2014. http://e27.co/is-thailand-a-hotbed-for-m-commerce-lines-flash-sales-data-says-yes/