As equity capital markets have become weary for the wireless industry, carriers large and small are challenged to cut costs and increase per subscriber revenues. Larger, nationwide carriers hold the economies-of-scale advantage, but regional carriers report their own set of cost advantages.
Major cost categories include customer acquisition, providing service, overhead, back office expenses and capital expenditures. In the past, carriers have been driven by subscriber growth, but the financial reality of the capital markets means easing up on the push for new subscribers, and increasing revenue per existing subscriber, particularly through increasing minutes of use and decreasing costs of maintaining those subscribers.
Carriers agree efficient billing and revenue assurance-actually collecting money owed-is key to reducing the costs of servicing subscribers. To cut labor costs in customer service, many carriers have implemented interactive voice response systems which help categorize calls and lessen the responsibilities and time required of phone agents. Some carriers have cut customer service staff by about one-third through the use of IVR systems. Carriers that include inserts with customer bills, such as a survey on “how we can better serve you,” can pro-actively meet customer needs at little expense.
Investment in training programs is key. Customer agents need to thoroughly understand the carrier’s services and have the ability to make split second decisions to reflect positively on customers and contribute to customer retention.
Fraud is a constant problem and here carriers need to invest in software, personnel and other preventative tactics to the extent losses avoided exceed the costs of implementing the mechanisms.
To minimize network costs, carriers need to optimize efficiency of their base stations and lower interconnection fees. To do this, carriers may consider using a competitive access provider with more affordable rates or use the local exchange carrier’s T1s more effectively.
Kevin Beebe, executive vice president of operations for 360
