The introduction of the next generation of wireless communications—whether 3G, GPRS, "2.5G" or "3G lite"—poses a number of challenges to mobile carriers. The most pressing may appear to be perfecting and rolling out the technology fast enough or the challenge of coping with the financial burden of license acquisition and infrastructure upgrades. But concentration on these issues alone risks ignoring the most fundamental challenge of all: the next generation network (NGN) products call for a significant change in the relationship between network providers and their customers. To achieve profitability at speed in the NGN world, mobile carriers will need to overhaul not just their systems and technologies but the most basic ways in which they approach the marketplace. Customer relationship management—customer insight and the range of channel interactions—will become a key issue in determining which players prosper and survive. This message has not yet filtered through to the bulk of the industry. Mobile carriers are still locked into a mindset which is more appropriate to the traditional telephone company, seeing their prime task as "making sure the phones work" and limiting the bulk of customer interaction to the billing cycle or problem response. While voice communications will remain the main source of revenue for the time being, NGN has created an enormous opportunity to significantly change the business of the network provider. It offers the chance to move away from being a commodity supplier of a general-purpose, undifferentiated product—voice communications and competing on price—to product and customer service as the differentiator. The richness of Next Generation Network functionality enables carriers to transform themselves into broader-based retailers of a wide range of products and services, tailored to the needs of specific consumers. Becoming a successful player in the NGN world therefore involves more than creating the technical platform that offers access to new services and products. The mobile networks of the future will become "department stores" of mobile crm services, with different departments serving targeted groups such as teenagers, women, and business customers. For the first time, mobile carriers can actively decide what kind of business they want to be in, which customers they want to service, while creating unique brands and the compelling and distinctive customer experiences to support them. The customers in these segmented market groups will need to be carefully targeted and educated about the benefits of the new products. That's no small task: at the moment it's estimated that over 60 percent of mobile phone purchases in the US and Europe are purely as security or safety items. Mobile operators are trying to introduce a new generation of mobile services into a world where most users have barely scratched the surface of what is already on offer. They are also attempting this task in a vacuum: mobile customer relationship management operators have a lot of data on their customers, which they approach in a very technical way, such as using data warehouse techniques to analyze usage patterns or the effects of different rate plans. What they really need is some old-fashioned market information about retail behavior. Only then can they target selected customer groups and build valuable offerings and applications specifically for those groups. This new focus calls for a reorientation of the company towards a product management and marketing mindset where partnerships with outside suppliers will be crucial in building those consumer-facing applications. Operators may even need to stand back and allow outside partners to market directly to different market segments. In general, the movement will be away from the current, passive approach, to an active focus on customers throughout the entire value chain. Handset design is one example: one of the lesser known lessons of the success of DoCoMo’s iMode service in Japan was the ability of the carrier to determine the design and capability of the handsets—thus defining the product and customer experience on it’s terms. This is the essence of the product mindset—defining, not reacting to, the market, and establishing market dominance in record time. This "end-to-end" focus applies not just to the creation of new services and products, but also to dealing with customers. Carriers must take charge of and integrate all aspects of the customer experience, just as a department store takes responsibility for all aspects of the shopping experience. Spreading responsibilities across departmental silos with labels such as "billing, "product development" or "customer care" will no longer work. Carriers need organizations that focus on customer groups, which own a given market segment from end-to-end. They need to evolve towards a modular delivery platform that accommodates multiple channels as well as different product value propositions. This is the only way they will be able to provide seamless service and a consistent customer experience. Many of the carriers are waiting for a "killer application" for the next generation network to emerge on the horizon. Unfortunately, that’s not likely to occur. Operators should focus on defining their own "killer roadmap" which will direct each customer segment to a service or product portfolio best suited for a given market segment. For example, DoCoMo has found a killer roadmap for its iMode service as it offers easy-to-use access to popular services targeted for specific customer segments with a simple pricing system. In this ever-changing environment, CRM architectures need to be both modular and highly flexible, incorporating sophisticated monitoring and feedback. The ability to rapidly introduce, assess and if necessary ramp up or discard services will become a keen source of competitive advantage. Some carriers are currently struggling with product portfolios and a less than perfect speed-to-market. Rather than reinvent the wheel and create new channels to address these issues, carriers can concentrate on satisfying customer needs, filling those channels with well-targeted products and working with partners who have expertise in each specific segment. The stakes in this market are only going to get higher: mobile phones are beginning to compete, not just with each other, but also with the traditional phone companies. In the future, consumers will have not just number portability between networks but full ownership of their phone number, and the ability to choose which network they use on each connection. Moving to the new world of NGN is going to be both risky and expensive for mobile carriers. But those that recognize the new role of the mobile device as a delivery channel, and the need to focus on customers have the chance to shape their own futures. About the Author: Dennis Nelson is an Associate Partner with the Accenture Communications, Media & Entertainment industry group. Talk to someone about this topic  To Top
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