Communications service providers (CSPs) around the world are under huge pressure to improve network performance as research has found that it is the most important factor in creating customer loyalty. Studies by Strativity Group show that satisfied customers are three times more likely to remain loyal than dissatisfied customers and 70% of customers are willing to spend more with businesses that exceed their expectations.
Research by Ericsson’s ConsumerLab, identifying a connection between network performance and loyalty to an operator brand, also found that a satisfied smartphone user is generally less likely to switch operator, leading to higher operator revenue over the user's lifetime.
At the same time, communications networks are becoming ever more critical as operators partner with players in the OTT, media, health, transportation and energy sectors.
The challenge of managing -- and often transforming -- highly complex networks while finding new ways of driving business and improving the customer experience is prompting more operators to work with managed services partners.
Insight Research estimates that global telco spending on managed services will increase 11% annually over the next five years. This year it is expected to reach $152 billion.
But CSPs’ requirements are vastly different than they were a few years ago, when the focus of managed services outsourcing was mostly on cost or network performance.
Ovum analyst Adaora Okeleke says telcos need to clearly specify their business objectives to derive value from managed services deals beyond cost and operational efficiencies. He says contracts need to specify the desired business outcomes.
“These changes are driving a shift from the traditional managed services model with a fixed price to an experience-centric model, which is designed to ensure end-user services assurance as well as create business value for the telco.”