Can Communications Service Providers Remain Relevant?
Now, how is Vodafone relevant to me? Because it offers a rich and compelling range of services and has inspired my customer loyalty? Not really, it’s relevant because I know who they are and I pay multiple subscriptions to them every month. I’d like to have a unified business account across all of our employees, but as there are fewer than 10 of them, the processes to go through to set up an account are too painful to be worth my time. It’s one of those things I think I’ll get around to, but don’t: in the end, the least painful method is to pay for each subscription from our account.
Beyond that, I couldn’t care two hoots about Vodafone per se – except to note that coverage and service is miles better when I’m overseas than when I am in the UK. As I noted in our presentation, the only value added service I pay for from Vodafone is my handset insurance.
So is Vodafone relevant? Sort of, is the answer. BT provides my broadband – are they relevant? Yes, highly so, because they give me a fabulous application that enables me to automatically register with thousands of BT WiFi hotspots when I am out and about. And, I never have to call customer service, except for when I lose a password.
And, are mobile providers relevant in the sense that they offer exciting and engaging services? Perhaps they are to some, but the consensus view from the floor was they probably aren’t except in cases where they have created a more unified experience that spans multiple devices and screens. Like Rogers Wireless, Network Norway or Hong Kong Telecom, for example.
Each of these providers has delivered a service that can be accessed across different devices and terminals and offers capabilities that can be enjoyed on different screens. Since my mobile provider hasn’t, I suppose that means it’s not very relevant at all except in terms of being an access provider to other services that I consume.
The point is that this is becoming an existential dilemma for most operators. Communications is something they have delivered for, in many cases, more than 100 years. If consumers in particular are choosing to use other communications services and simply use the connection provided from a traditional player to access them, what next for the operator concerned?
Of course, this debate is hardly new – tubs have been thumped about this for several years, but what it boils down to is this. Operators and network providers have several choices.
- Accept the situation and focus on providing the best access available with a limited feature set (emergency calling, for example), and charging accordingly (my Vodafone bills have surged by 30%+ since I moved to 4G, so clearly there is money around);
- Agonise about it in an existential manner and do nothing because they can’t make a positive decision; or,
- Actively decide that they are going to continue in the business of being the preferred communications service provider and do something about it. Fast.
It seems that many are caught in the second option – they have been prevaricating about what to do for years and hence haven’t moved forward. In contrast, operators like Rogers and co have steadily asserted their own excellence in delivering new and enhanced communications applications that help them remain relevant to the lives of consumers (and, in the case of Network Norway, to businesses). Probably having TV services helps too, but that’s another story.
Now it’s time to mention the dread phrase RCS. RCS doesn’t really improve things but at least it’s a step forward from what most providers have today. It’s an enhancement to messaging and can be criticised from many angles. But it does improve the user experience, in so many ways. The problem is that the existential angst has also been applied to this domain with the nonsensical question of “is there a business case” returning ad nauseam.
There isn’t, at least not in positive revenue growth. However, as Rogers showed, there is a business case in keeping subscribers and remaining relevant to them. Reducing churn boosts profits because it costs more to win a subscriber than to lose one. If you sign one up and lose one at the same time, you’ve lost. Protecting your subscriber base should be of paramount importance, with a priority beyond calculating some incremental revenue that you won’t get anyway for a service that doesn’t do much more than users can get for free elsewhere. The only thing it does do is ensure all of your users can reach any other user on the planet – which is still a huge asset to consider and to leverage.
So, the answer is clear. If you want to remain relevant as a communications service provider, you need to offer something more than basic voice and messaging. It doesn’t have to be RCS, but it does have to be something a bit like it with a migration path towards RCS if it ever catches on. It needs to be interoperable though, so you may as well go for something that offers that as a minimum or that can deliver interoperability in due course, as Rogers et al have done.
Without something like that, users will opt for one or more of the alternatives and default to you only when they have to. Which means you will have become irrelevant and effectively only a pipe – only it won’t have been a positive choice that you made, but rather one forced on you by inertia, angst and the inability to make a decision.
And, really, this is the critical bit. There’s nothing wrong per se with being a superior pipe, just as there’s nothing wrong with striving to be a better communications service provider. The real danger is being stuck in an existential battle and being unable to make a decision at all.
It was good to see that some operators that have made their choice, but, equally, it was worrying to see so many that are still locked into seemingly endless introspection. It’s time to get over it and declare your hand.