Customer service as a differentiator.
We are absolutely adamant here at Ovum
that MVNOs should be prioritising automated self-service.
We see global MVNOs doing this very thing.
Why?
What's the fundamental premise
of being redirected to a self-care app in countries like Malaysia?
Why have I got iD Telecom in the UK as a standout case study
of someone that is doing customer service as an MVNO
in a very successful way?
Well, it's about ease of usage.
It's about ensuring ease of usage for your consumers.
Again, absolutely critical to keeping the customer happy
as we see encroachment coming into this realm.
But MVNOs, they need to be better than telcos at this.
Why?
Because you have to balance this
with the difference in your telco cost base,
so it has to be done leanly, efficiently,
and even more so, we could argue, than the incumbents do it.
And our survey drove home this point
by showing us that customer service matters, even to the youth segment.
16-to-24-year-olds in our survey that had a bundle, one of the...
..well, THE key reason they flagged for possibly changing their bundle
was to receive a better customer service.
It ranked three on the list previously,
when we asked the general Australian consumer population,
but your youth are valuing customer service
as a differentiator in their buying of services -
very important to the MVNO space,
as well as the incumbents space.
This brings me to tariff innovation.
I say it's vital, and today it is.
Traditionally speaking, when I've looked at tariff innovation per se,
I've seen a lot of innovation coming from the MVNO space.
We have some examples here - Ting in the US,
that allows their consumers to only pay for actual usage.
We have Circles.com again, which allows their consumers
to change their plan according to their perceived usage,
and that new plan comes into effect the following month.
But the not-so-good news
is that at the same time your incumbents have realised
that good pricing strategy unlocks LTE data monetisation.
And they have recently started
to really jump on the tariff innovation space as well.
What do I like? What would I like to see?
I'd like to see more focus on plans,
highlighting the data component of that plan.
So, what do I mean?
Well, for example, I like a plan that may just charge for data
and allow the user, if they so want to,
for an additional incremental cost,
layer on a little bit of voice and a little bit of text
to suit their need.
That's putting data as the focal point of the plan.
Shared data.
This has been around in the Australian market for some time.
The good news is that your incumbents
have been promoting this quite heavily.
They have helped you to...
They have helped to educate the market on what it is to share data.
And I think they've done, like I said, a reasonable job of this,
and now is an ideal time for MVNOs to jump on this bandwagon,
'cause a lot of the education of the consumers
has already been taken care of
and it'll be easier for you to bring this concept to market.
Why do I like shared data?
It's simple.
In most markets, it's an anti-churn management strategy.
It helps keep your customers sticky.
These type of plans, done well, are harder to unravel,
if you are sharing your data bucket with your two children.
That becomes harder to churn, as the general rule.
Um, we can confirm that data allowances are growing.
We have an extensive database at Ovum
which tracks a selection of plans from 20 tier-one countries.
And it's from this database, which includes Australia,
that we can draw a lot of flavours and different nuances
around things like charging for extra data on plans and the like.
And...while we concede
that data allowances are growing because of competition,
because of operators offering things like bonus data for subscribers,
we see more and more unlimited data plans coming to market.
And in the MVNO space, we see more prominence
on an MVNO targeting the mobile-only customer
with bigger and bigger buckets.
Um, that's the new reality,
but my reality, from where I sit,
is that all of these bonus data add-ons,
all of these unlimited plans,
always have to keep in mind that the upsell opportunity cannot be eroded.
I have seen examples of plans from MVNOs and from incumbents
where bonus data is so much
that it's enough to deter the customer
from dipping into their pocket and upselling to a more expensive plan.
So, I urge caution as you put data as the focus
and try and woo subscribers through these bonus offerings.
Segmentation is vital.
We heard it today, and it absolutely is.
One offer simply does not fit all,
and we would steer MVNOs away from this,
having just a single offer for all subscribers in the market.
But above all, my golden rules on tariffing are, keep it simple.
I have seen several plans come across my desk -
"Nicole, this isn't working. What's the problem?"
I can't understand it.
Keep it simple.
And transparency is paramount to good tariff innovation.
No hidden costs, no detail buried several click-throughs away.
This puts the MVNO at risk of losing credibility with the subscriber.
That is not good tariff policy in today's world.
IoT.
We can't go anywhere as analysts and talk to NVNOs today
without addressing this space.
It is bubbling away.
We see lots of movement around global data connectivity providers.
These are the Teleenas of the world that are offering IoT suites,
offering and bundling up everything from connectivity to partnering,
attracting the likes of those with business propositions
being built around eSIMs and around global data SIMs.
Closer to home, we find that most MVNOs that we talk to
do have IoT and the opportunity on their radar.
But it's a slow burn.
Why?
That's because the incumbents
are still themselves working through this space.
They're working through the technologies.
They're working through the business opportunity.
They're working through what verticals they want to play in.
But, over the course of the next year,
as more and more of those big issues become resolved,
there will be some opportunities
that spit out of the pipeline for MVNOs.
So, in conclusion, I say that the onus is in your laps...
..to rethink what your strengths are,
how you should play, and how you can improve -
improve your business strategy,
not just in terms of direct monetisation,
but indirect monetisation strategies are also critical.
And, as a final word, I'd say don't be reluctant
to challenge and try and out-innovate some of the incumbents
in some of these big spaces.
So, with that, I will leave you with some...
..the gravy train that we all hope to ride.
There are my contact details.
This is just a portion of some of the material
that I've drawn upon today,
and when you get this pack, you will notice
that the full Business Connect Offer is detailed here.
Alternatively, you can speak to Magalie or Telstra Wholesale
on how we can potentially collaborate
in the name of today's theme, around co-creation.
So, thank you very much.