By Cat Yong
If there was one thing that could contribute to the highs and lows of an average person’s day on a regular basis, that would be the humble mobile phone… or rather the telco service that powers it. Besides being the conveyor of good, bad news, information etc. etc, service delivery lately, have been cause for quite a lot of frustration. Recent developments in the local industry have been encouraging, but… will they be enough?
Ten years ago, Malaysians’ needs were simple – voice calls, text messaging and to a lesser extent multimedia messaging, had to work. If all three of these could function, the further away one was from the Klang Valley, the better that mobile service provider or telco would be perceived as.
These days, our communications needs are much more complicated than that. Not only do we need voice and text to be functioning at whatever location we may be (especially for businesses), but we also want to use mobile Internet and mobile applications so that we can Facebook, Twitter, and Instagram our friends and family, any time, at any place.
There is also the much touted cloud computing trend, which is supposed to give workers access to Web-based productivity applications. But rather than being a hit, it is facing inertia in terms of take up, as businesses expect bandwidth quality to be better than it currently is, before they put more business applications onto the cloud.
Sad to say, as more ‘traffic’ from Internet or data applications came onto our telco s’ networks, our experiences of voice and SMS suffered. There doesn’t seem to be enough bandwidth to give us the quality and stability that we need for voice and data service.
Even network coverage is not good enough.
Jonathan Lim, General Manager of Sunway’s Group IT was candid about network coverage in smaller town areas. “We have work sites in places like the Iskandar development in Johor. In terms of quality and coverage, we constantly have challenges.”
He explained that approvals from decision makers in different locations need to be timely, a critical business factor for one of Malaysia’s leading property and construction conglomerates that has ongoing property developments around the peninsular. “So, we are definitely affected by the quality of connectivity.”
Happy customers is KEY to keeping ‘em!
In recent years, customer care is contributing a bigger portion towards the customer’s experience, or what the customer eventually feels and thinks about their telco service provider.
As mobile penetration rates breach the 100% mark, that means one user could be sporting more than one mobile device, and possibly also signed up to more than just one service provider. It has never been more crucial for telcos to keep existing customers happy, especially since Mobile Number Portability (MNP) was introduced.
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| Francis Chang |
DiGi’s Head of Customer Management, Francis Chang said, “Since MNP was first introduced in 2008, DiGi has maintained its position as a net gainer in acquiring new customers who port over to DiGi.”
Celcom Axiata’s CEO Dato’ Sri Shazalli Ramly however shared that the overall impact of MNP has been neutral to Celcom. He said, “We gained as many subscribers as we lost,” while also offering the juicy opinion that this is not the case for the other local major telcos.
In any case, the big telco boys are working to enhance customer service via increasing customer touch points, training staff to be more knowledgeable about products and services, offering attractive rewards, loyalty programmes and so on. They are definitely making all the right and required moves.
But, Axiata Digital’s Chief Innovation Officer, Karan Henrik Ponnudurai served up the rather progressive view that, “The traditional areas of customer service are really changing, and is no longer dictated by traditional models like call centres with customer service agents. “
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| Dato’ Sri Shazalli |
Karan who is responsible for the execution of digital businesses across an Asian footprint for Axiata, cited the example of Giffgaff, a mobile virtual network operator (MVNO) in the U.K. “They have no customer service department and their own customers do the support.
“So, I think it is about enabling the customer to do what he wants on his own.”
‘Giffgaff’ is Scottish English for ‘mutual giving’, and while the ‘SIM-card-only’ 4-year old encourages community participation in operations like sales, marketing and customer service, it hardly means that its customers are taking care of the networks, the various infrastructure and ensuring service level agreements (SLAs) are honoured.
Giffgaff’s service becomes not so suitable for businesses and enterprises that need stability, reliability and a host of enterprise-level guarantees.
The community-powered feedback and response system that Giffgaff has, however does allow this 40-staff strong company to focus on the business of creating innovative (and contract-less) products and experiences for their customers.
A world game
A common question in the local telco scene is this – are our local, full-fledged, infrastructure-heavy telco boys evolving fast enough to take advantage of current market scenarios?
Karan described that it is like drinking from a fire hydrant. “There is a lot going on, and you need to be focused and very aware of where you choose to play. The competition is the world, not the operator across the street.”
One case in point is the dumb pipe dilemma. The incumbent telcos and Internet service provider (ISP) have made the necessary infrastructure investments to be able to carry voice and data traffic to their customers. This has earned them the unflattering title of being dumb pipes.
Karan opined, “There will always be a need for the dumb pipes. So, telcos must address the need of being a profitable and efficient pipe. Some telcos stop there, which in and of itself, is fine. However, some want to move up the value chain, and that again is a business choice.”
For 2013 at least, immediate areas of focus for the telcos, are clear.
Shazalli shared, “A continuing focus at Celcom is to ensure that our reputation for great coverage also extends to the data world. At same time, we are introducing very high service speeds via LTE and HSPA+.”
Over the coming months, he shared they would bring live their new front-end IT systems to enhance service to customers, including revamped portals and new loyalty programmes. These would be supported by their investments for efficient customer management, like Business Support System (BSS), business intelligence (BI) and targeted analytics and Next-Best Activity Solutions that offer relevant and timely value adds to their customers.
DiGi’s Francis Chang described his organisation’s emphasis as, “DiGi is very focused on all our customer interactions to deliver Internet for All – to make it easy for customers to enjoy a better mobile Internet experience by offering relevant services that brings value to their lives.”
For example, they are looking at improving their e-Commerce platform that powers their online retail medium, DiGi Store Online.
So, our telcos are pretty much covering all their bases. But 2013 is also the year where they have to effectively deploy, package and price a new communications technology, LTE, as well as once and for all, properly address the challenges that over-the-top (OTT) players, pose.
LTE arrives but…
Before spectrum for LTE was allocated to the eight license holders of varying telco-type experience and varying years of experience, the anticipation was delicious. After spectrum was allocated, the anticipation has not diminished one bit.
If how fast an LTE service ‘launches’ is determined by who puts up the ad billboards first, then Maxis would have won (this however, is open to debate), and Celcom wasn’t very far behind.
The ongoing trend of one-upmanship among the Big Three telcos reached its peak a few years ago when Apple iPhones were launched at the stroke of midnight to miles-long queues of eagerly awaiting fans. Before that, it was price undercuts, as telcos scrambled to have the lowest rates or the best value-for-money bundles in the industry.
However, putting up LTE ads before the technology has a mature ecosystem in terms of networks, devices and applications, is a bit of a dampener or ‘potong stim.’ (PULL QUOTE)
Green Packet’s Managing Director and CEO Puan Chan Cheong shared ABI Research findings that 103 million LTE-ready mobile devices had shipped in 2012. Green Packet, for now, is the parent company of Malaysia’s pioneer WiMAX telco, Packet One, which is transitioning to TD-LTE. TD-LTE is the flavour of LTE that the other seven license holders had received LTE spectrum for.
CC Puan also spoke of commitment from equipment manufacturers and how over 180 operators are already on board and planning to deploy TD-LTE networks.
… now you see it, now you don’t
By now, it’s all too easy to mistake that the LTE ecosystem is already mature, but 103 million LTE-ready devices is hardly mass scale. The all too familiar chicken-and-egg conundrum rears its ugly head – are equipment makers holding back? Or is it the telco operators?
CC Puan had this to say, “We’re keeping a close watch on the LTE developments of telco giants especially China Mobile and Bharti Airtel. As soon as they have traction, their massive subscriber base along will drive the maturation of the ecosystem and deliver economies of scale.”
Intel Country Manager for Sales and Marketing in Malaysia & Singapore, Prakash Mallya also weighed in from LTE chipset and equipment point of view, “LTE is still pretty expensive to deploy. It’s also still expensive to monetise as well from a telco infrastructure point of view.”
As example, Celcom which boasts widest network coverage of all the local telcos, is investing up to RM300 million over the next three years, to modernise their networks for LTE technology. Half of this spending would be for 2013 alone.
Prakash goes on to say that the ramp up is still some time away. “The chipset, devices… everything is quite high cost. So if we go amortise, it won’t take just 6 or 12 months. It will take longer than that.” He had also stated, that moving into 2014, Intel would have a breadth of LTE offerings.
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| Tengku Farith |
Web pioneer and CEO of Skali Group, Tengku Farith Rithaudeen, commented about LTE, “Sometimes, it’s LTE, and then suddenly it’s E (EDGE)… so coverage isn’t consistent.”
The exact same thing could be said of 3G technologies like HSPA, in Malaysia. Some may argue that consumers do not care about the underlying technologies as long as they are able to do what they need to do with mobile Internet.
But, I think the indicator for whether the network is GPRS, EDGE, 3G or LTE is just as significant as the indicator for strength of the network signal. It contributes negatively to overall customer experience, if the LTE device I carry is ready to receive 4th generation technology, LTE signals, but receives 1st generation technology, GPRS instead, for example.
So, there is a bunch of things that telcos need to keep an eye on – optimising their existing 3G infrastructure investments, amortising it, and ramping up current LTE deployment.
And their timing for wide-enough LTE coverage has to be spot on. By 2014, when economies of scale (devices become cheap enough) and mass take up are both expected to happen, LTE coverage for the Malaysian masses with their LTE-ready devices, has to be ready.
Shazalli said, “Celcom believes the right pricing strategy is to position LTE as an extension to 3G with larger data caps at a slight price premium.” Other key considerations for LTE pricing are device, network and applications strategies.
Celcom had officially launched their LTE service on 22 April with plans and device bundles to be announced after June 2013. LTE coverage can be found in population centres like Klang Valley, Johor and Penang, with Melaka, Ipoh, Langkawi, Kuantan and even big towns in East Malaysia, following soon after.
There is target to cover 30% of the population by end of Q2 2014.
-To be continued at Part 2–
