The launch of 4G in the UK was widely welcomed, and in 2013 almost 60 per cent of mobile phone customers said that they would switch operators if it meant they would gain access to 4G services.
The appeal of using a vastly superior 4G network was (not surprisingly) a very tempting prospect for mobile users and this temptation was a major driver of customer churn last year – operators were warned to be prepared. However, with multiple operators having now launched 4G services, it appears that this is no longer the magnet for attracting new customers that it was 12 months ago.
With all of the major UK operators now offering 4G connectivity at least in London, the competition is currently revolving around increasing the quality of the networks, improving download speeds and providing added bundles of services (as Vodafone has done with its Spotify and Sky Sports offerings).
In Finland, on the other hand, the campaigns around 4G services has revolved almost entirely around the idea of ubiquitous access - complemented with the usual small print to the contrary - to the point at which it is likely that in the eyes of the consumers, the availability of fast mobile Internet access absolutely everywhere is already perceived as the standard situation. This means that going forward, operators need to start thinking beyond purely offering plain 4G services, with speeds and feeds as the only differentiators.
Last November, Optus chief executive Kevin Russell declared that winning new customers was no longer the key battleground for Australia's telecoms providers. Although this statement is representative of the Australasian market and reflects the situation that has already been acknowledged in many European markets for quite some time, it nonetheless marks an expressed sea change in operator attitudes to business models – a move from amelioration to consolidation.
So, if operators want a renewed emphasis on the retention of customers, what should they be thinking about beyond 4G speed and coverage? Is the key better mobile handsets? Cheaper tariffs? Better bundled services? Surely the hot question on the lips of all 4G operators is no longer who is providing the network, but who is able to deliver the most, efficient, relevant and personalised services from it?
It's no surprise that "big promises" are being made by operators about the services consumers can expect to receive on their 4G network, as they look to promote customer wins and retention. Take Vodafone for example. It claims that, "whether you're gaming online, streaming videos, downloading music, surfing social channels, everything is faster." Sonera billboards at Helsinki bus stops read, "I'm in the Internet, where are you?" While this direction is understandable, operators must remember that meeting, or indeed exceeding, customer expectations for 4G services isn't dependent on bold claims and celebrity testimonials, or even on the effectiveness of their networks, but how the overall package aligns to meet customer expectations and experiences.
This in itself is ultimately not just about raw network performance or gimmicks with new handsets, but about being able to offer existing customers a great overall quality of experience (QoE) and a relationship that makes each customer feel like they are truly valued by their operator.
Thanks to the huge flows of data available to operators, there is now an unprecedented opportunity for them to understand their customers like never before and build relationships based on longevity rather than stop-start peaks and troughs of engagement. The challenge, however, will be how to put all of this information to effective use. For more often than not, data is either confined to the murky world of analysts or at best used in a point solution manner to solve individual problems instead of being turned into actionable insights, available across all customer touch points.
The true skill of an operator lies in being able to identify and - most importantly - interpret what is most relevant to an individual customer. This information can then be used to make the appropriate decisions to benefit the quality of the subscriber's experience, whilst at the same time opening up potential avenues for additional operator revenues, but only if the information available is interpreted through the experience of the customer and not force-fitted to an existing "loyalty" model.
At first glance this may seem like a cunning way of disguising what is simply a matter of analytics or CRM, but it's more than that. True, it's still about number crunching, but also about giving these numbers and generic statistics a real face and applying this wealth of information to individual cases instead of 'segments' or 'target audiences'. In terms of CRM, it's about more than emails or texts assigned to a particular customer; it's about understanding customer usage and requirements, knowing which apps, websites or communication channels are most frequently used and then offering a relevant bundle (for example) before a customer has even thought to ask for it.
The priorities, methods and business models of operators all over the globe have fundamentally changed as a result of the explosion of 4G services in the last 18 months. The land grab for new subscribers is finally subsiding and the battle to retain existing customers has well and truly begun. The increasing amounts of data produced from the 4G networks may well be the key to cracking the enigma of customer churn that operators have been searching for.
Where offering a 4G network used to be a guarantee for success (just look at the number of subscribers EE netted before Vodafone and O2 came to the party), this focus is now changing.
While 4G will remain an intrinsic component for operator success, the data produced by these networks, and how it is used to improve QoE for individual customers, will prove the defining factor between success and failure.
Timo Ahomäki is the CTO of Tecnotree