Please Don’t Call Me Dumb

Dutch regulators recently became the first in Europe to signal their position on net-neutrality by banning mobile operators from charging consumers more for specific bandwidth-hungry (or network-crippling) internet-based services. Separately, but in many ways linked to this issue, KPN, a leading operator in the region, was criticized by privacy advocates for attempting to gain an insight into the most common types of data services its subscribers were accessing. Regardless, it’s clear that traversing the minefield that is net neutrality and customer privacy is set to place entirely new profitability constraints on mobile data providers.

This ‘profit challenge’ is not a new thing. The majority of mobile operators will acknowledge that the cost and complexity of delivering mobile data services has been escalating for some time now. It’s a case of keeping the mobile data lights on, but without the ability to drive more revenue from it. In our analysis, poor performance results in sub-standard customer experience of mobile data services, which in turn leads to increased call volumes into customer service centres (up to 48 per cent more) and that ‘churn’ word (16 per cent more).

Customer demand
What further compounds the profit challenge is that product and marketing teams are unable to improve their understanding of customer demand. This is typically achieved by using network monitoring tools to gain visibility and intelligence on consumer product and service consumption. However, there is the perception that it is a “theoretical possibility” for these monitoring tools, which leverage Deep Packet Inspection (DPI) capabilities for network quality management, to expose personal and private customer information to marketers.

DPI is a network inspection technique that observes information from a stream of data at a monitoring point. Mobile data providers use DPI to identify and prevent internet attacks, perform lawful intercept, enforce policy and quality of service, gather statistical analysis of network performance, and troubleshoot network failures. DPI is also important for consumers as well as providers, and is essentially a fundamental requirement for conducting business within this market. However, the fact that this technique inspects data raises objections from regulators and consumer advocates.

So faced with this prospect of “damned if you do and even more damned if you don’t”, where do mobile data providers turn? Well, what should really be of interest is the business motivation behind the use of DPI. The reality is that the majority of mobile data operators couldn’t care less about the content of emails or SMS - what they care about is that they are sent. However, unlike their old voice-driven business, where they controlled the only thing that mattered (the network), in the data-driven world, they are simply one part of an extensive ecosystem or service chain that also includes operating system developers, device manufacturers and content or application providers, which for the most part, they have no control over.

Embrace change
When it comes to the internet, mobile carriers have to come to terms with the fact that they don’t control the consumer – the consumer controls them. The only way that they can avoid being relegated to a ‘dumb pipe’ provider is for them to embrace the change. For instance, one of the most influential factors that impacts customer loyalty and reduces churn is how a mobile data provider manages problems. How do they react when things go wrong? If the answer to the customer is: “All my lights are green, there’s no problem”, then that is almost certain to result in a termination of their agreement. Yet there is a rapidly-widening gap between the operators’ view of their mobile data service quality, and the actual end-user experience of the service.

The answer goes way beyond just implementing the latest and greatest monitoring tools. It also includes aligning departments within the organisation, and even managing the customer experience before they actually become a customer. This is actually a tried-and-tested approach in a large number of enterprises, to manage the delivery of their IT services to internal users and customers. In fact, the problems faced by these enterprises are remarkably similar to the problems that operators now face in delivering data services to their users.

Instead of DPI, what is needed in the world of data services is a process for Service Delivery Chain Management (SDCM). With SDCM, the ‘profit challenge’ is solved by giving multiple departments within a mobile data provider one view of the customer experience across the full service delivery chain, which is measured from access point (i.e. device) to content, and everywhere in between. As an evolution to the DPI technique, the SDCM method enables consistent and reliable customer experiences, while eliminating business cost and risk.

The SDCM approach doesn’t collect any data which might be used to compromise customers’ privacy in any way. Apart from the fact that it’s illegal, there is a very simple reason for this: it doesn’t need to. SCDM is aimed at understanding the subscriber experience - although there is a huge amount of data needed to do this effectively, private data is irrelevant, unnecessary and very detrimental to the overall performance of our solution. At the same time, the approach doesn’t discriminate on product type, giving over-the-top providers such as Skype equal opportunity for access, regardless of access point or network.

These outcomes result in an ability to embrace customer demand and be the best at delivering the products and services customers want, setting the stage for new and profitable services in the future. Conversely, while trying to protect revenue by using invasive tools and restrictive business practices may seem simple, it’s actually a recipe for long-term failure. The one thing that all internet leaders have in common is that they got there by providing outstanding customer service, and by giving their customers what they wanted, when they wanted it. Irrespective of where net neutrality plays out, this is what will differentiate successful carriers from the behind-the-scenes, nobody-knows-you, dumb pipe players.

Sean Timiney is managing director, mobile solutions at Compuware