Mobile operator differentiation is becoming harder to achieve as over-the-top players grab the customer relationship.
Devices offer some level of differentiation, especially between those operators with the iPhone and those without it. But by and large, the best those operators can hope for in the device differentiation stakes are short-lived exclusive marketing deals.
New revenue opportunities such as M2M and cloud services also provide some service differentiation, principally in the enterprise market, but there is hardly an operator anywhere that doesn’t have either M2M or cloud on their agenda, so superior execution is required. But we struggle to identify other safe-bet, new “platform” opportunities for operators, especially in the consumer market.
So, price aside, we see two main strategies for differentiation: customer service and quality of service.
We believe that operators need to put the customer front and center of every business decision. Overhauling customer service, however, has to be more than just a facelift or cheap marketing exercise. To be successful, they need to be intrinsic, part of the culture and implemented from the chief executive level down to the part- time retail sales assistant.
That is the very essence behind Telstra’s grass roots Project New strategy, now 18 months old, designed to increase productivity through cost reduction and improving customer satisfaction. This has required a root-and-branch review of all of Telstra’s internal and outward-facing business processes. Linking staff remuneration to productivity gains goes a long way to ensuring this initiative is given top priority from the CEO down.
We see other operators, such as Optus, also putting a new emphasis on the customer. In this case, Optus recently announced a new customer division spanning the entire organization.