Reader Forum: Will customers become winners or losers in the wireless carrier wars?

Editor’s Note: Welcome to our weekly Reader Forum section. In an attempt to broaden our interaction with our readers we have created this forum for those with something meaningful to say to the wireless industry. We want to keep this as open as possible, but we maintain some editorial control to keep it free of commercials or attacks. Please send along submissions for this section to our editors at: [email protected].
Although the wars between the wireless network carriers have been waging for some time, the fourth wave of monetization where digital services will drive the next trillion dollars in revenue, has lately become much more intense. In this “warzone,” the biggest challenge for carriers has been to reduce overall customer churn and drive average revenue per user.
Over the last several years we’ve seen the world’s largest cellular carriers obtain a “cold war” mentality, investing millions in both network build out and customer support infrastructure in an attempt to keep their users and attract new customers. The question remains, how long can this continue now that we’ve entered a “hyper” price-based competition?
So what does this all mean for the customer? Will they continue to reap the benefits, or will carriers get caught up in their promotional wars and forget to follow through on customer demands?
When these carriers reduce fees, they are also reducing their margins if they keep up the same level of support for the existing customer. Therefore, as fees go down, customer service is the first thing to go. Networks risk losing sight of their support structure and increasing customer churn due to dissatisfaction. They need to find a solution to keep the customers they already have, while bringing on new users at a lower per user support cost.
The overarching commonality among the carriers who have been most successful in retaining satisfied customers is an extremely robust customer support infrastructure. Some carriers have found a way to stay close to their most valued customers through their extensive network of “support centers,” which allows cell phone users to immediately exchange broken or defective devices, while others provide these same services in their retail stores. However, continuing those strategies can be difficult given this price-based competition and margin erosion.
One solution for carriers is to evaluate their current cost structure, potentially lowering the cost of user support by re-engineering their customer service and support system. To achieve this, they could outsource support to a third-party supplier, which will decrease costs while increasing the volume of capabilities by sharing the same resources with other customers. The carriers that don’t want to reduce the scope of their customer support program, or outsource to a service provider, could choose to charge for a premium support service of their product or charge more for optional features such as additional data and storage. Keep in mind that this approach has been effectively adopted equipment side of the house.
Carriers are also moving towards “triple-play” and “quad-play” pricing models in order to drive digital service adoption, where customers bundle several services through one carrier. This benefits the customer by having all Internet and wireless services in one place, helping the carrier to reduce their cost-per-customer, while allowing them to reduce customer churn.
Ultimately, we will see wireless carriers expanding their business models to create new opportunities to monetize their subscriber bases outside of traditional wireless connectivity, and as a result it will create a new opportunity of choices for the customer. As a result, the lines of customer ownership will be blurred between carriers, OEMs, retailers, extended warranty providers and even software/content providers. In order for the customer to benefit and the industry to sustain quality support we will have to rethink and develop a “holistic customer support model” which encompasses all players. In the true sense of “coop-etition,” stakeholders will need to collaborate to deliver premium customer support. For service providers, that is where the opportunity lies.