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                           Data services and
                           customer experience



Venue: Pragati Maidan
Date: 21 - 23 March 2012
2   PwC
Contents
Introduction	4

Customer experience	                                               5

Current scenario	                                                  6

The ecosystem for data services	                                  11

Enhancing customer experience – Challenges	                       14

How to improve the customer experience	                           16

Glossary	20




                                     Data services and customer experience   3
Introduction
             According to the latest data released by          will be introduced later this year. Thus, the
             the Telecom Regulatory Authority of India         adoption of high speed data services can
             (TRAI), by the end of December 2011, the          turn out to be a prolonged battle rather than
             country’s mobile telephone subscriber             churning out quick gains. This has proved
             base increased to 893.84 million. The high        that it is not just about faster data speeds but
             teledensity in urban areas has shifted the        building an ecosystem which can provide
             focus on rural areas to maintain the number       customised experiences to consumers. In
             of subscriber additions per month. Voice          this white paper, we look at the challenges
             revenues tend to plateau as the number of         in adoption of the data and vas service in
             subscriber additions moderate. With call          India and how service providers can focus
             charges at an all time low it is unlikely for     on increasing customer satisfaction.
             users to increase the number of outgoing
                                                               PwC is delighted to be a partner to the
             voice calls no matter what plan, promotion
                                                               20th Convergence India 2012 event. As
             or pricing is used. Besides, rural subscribers
                                                               an introduction to the issues which will
             have a low ARPU. This makes it imperative
                                                               be covered in the proceedings, it gives
             for the Indian telcos to look for additional
                                                               us great pleasure to introduce the key
             sources of revenues. Introduction of the new
                                                               topics of driving the Customer Experience
             VAS services is a right step in this direction.
                                                               in telecoms and the Ecosystem for Data
             The advent of 3G services and improved            Services in these next few sections.
             data speeds (lack of which was seen as            Customer Experience is probably the key
             a detriment to faster adoption of data            concern today of the Chief Marketing
             services) was expected to change the              Officer, with the convergence of device,
             landscape of data services. However, this         service and network to a level never
             inflection point did not turn the way it was      seen before. The implications will
             expected. While 3G created a huge buzz,           spread from customer experience as we
             its adoption was not met with the same            know it, to related areas, such as retail,
             zeal. Besides, the service providers are          and distribution. We will be releasing
             looking forward to the 4G services which          provocative thinking on these topics in the
                                                               near future.




4   PwC
Customer experience
                                           The TM Forum defines customer experience          Increasing consumer experience acts
                                           or consumer experience as, “The result            as a differentiating factor for the telcos
                                           of the sum of observations, perceptions,          and provides them with a sustainable
                                           thoughts and feelings arising from                competitive advantage over competitors. An
                                           interactions and relationships between            organisation can have product or services
                                           customers and their service provider(s).”1        providing different levels of consumer
                                                                                             experience. E.g., in the BFSI industry, a
                                           Consumer experience arises from touch
                                                                                             bank can be highly renowned for their
                                           points i.e., what a consumer experiences
                                                                                             services in retail banking but commercial
                                           from the start till the end of using a product
                                                                                             banking services may not be equally good.
                                           or service. It is not limited to the experience
                                                                                             As each product or service has its own
                                           but also involves how the product or service
                                                                                             individual characteristics, they also have
                                           was delivered. In fact, all products or core
                                                                                             their own set of challenges in meeting the
                                           service are enveloped by an additional
                                                                                             required level of consumer experience. This
                                           service delivery layer which covers areas
                                                                                             is particularly the case between voice and
                                           such as sales management (pricing and sales
                                                                                             data services. Data services provide rich
                                           channel), billing management, receivable
                                                                                             multimedia applications and require high
                                           management (collections and disputes) and
                                                                                             level of consumer interaction during service
                                           customer care functions.
                                                                                             consumption. As mobile is a new platform,
                                                                                             consumers may give some leeway to service
                                                                                             operators for poor quality of experience.
Layers of customer experience
                                                                                             However, this will not last as consumer
                                                                                             demands for data service picks up, the
                                                                                             demand for a better experience of using
                                                                                             these services will also increase.
                                    Receivable                                               Before delving on the unique challenges
Core product                       management                                                of providing consumer experience for data
 or service                                                                                  services in India, we need to look at how the
                                                                                             country’s data services market is shaping up.
                                                                                             A high potential demand should not only
                                                                                             encourage the telcos to increase the bouquet
                                     Product or                                              of data services but also the customer
                 Billing                                  Sales
                                service consumption                                          satisfaction associated with these services.
               management                               management




                                    Customer
                                   care function                          Service
                                                                     delivery envelope




                                           1	   http://www.tmforum.org/ManagingCustomerExperience/6513/home.
                                                html?linkid=37898docid=12601




                                                                                                 Data services and customer experience   5
Current scenario
                                          The Indian telecommunication sector           Decline in the ARPU
                                          has attracted telecommunication service
                                          providers from around the world.              For the past two years (Sept 09 - to - Sept
                                          With 893 million2 plus subscribers and        11) average revenues per users have been
                                          counting and the country’s subscriber         steadily declining in the Indian telecom
                                          data usage picking up, there are immense      sector for GSM (around 43%) and CDMA
                                          opportunities for global service providers.   (20%) subscribers. This is primarily due to
                                          The evolving ecosystem for data services      the falling call charges which are one of the
                                          presents opportunities for innovations        cheapest in the world. However, the minutes
                                          and entrepreneurship. However, amidst         of its usage have shown downward trend in
                                          all this, telcos tend to lose focus on the    the same period (falling by 22% for GSM
                                          most important thing-the consumer.            and 25%for CDMA). This shows that there
                                          With multiple channels available, only        is a limit to which users can increase their
                                          an enriching experience will make the         talk-time.
                                          consumer choose mobile as his preferred
                                          choice of communication.                      2	http://www.trai.gov.in/WriteReadData/trai/
                                                                                           upload/PressReleases/869/PR-Dec-11.pdf


    Average revenue trend per user each month (in INR)




                                                                                                             Source: TRAI



    Minutes of usage per subscriber each month




                                                                                                             Source: TRAI

6     PwC
Increase in the subscriber base                 rural teledensity which reduced to 4.40
                                           Currently, as per the TRAI data, the            times in Dec11. While urban markets are
                                           number of subscriber additions is strong        nearing saturation, good potential still
                                           (around 142 million wireless subscribers        exists in rural teledensities. We believe
                                           were added in 2011 alone, an increase of        that majority of the subscriber additions
                                           19%). This trend is likely to continue in       will occur in category B and C cities along
                                           2012. Even though the overall teledensity       with rural areas.
                                           has reached to around 74% (December             However, subscribers in these areas have a
                                           2011) there still exists a significant amount   lower ARPU and it is unlikely to go up. As
                                           of untapped potential                           the prospect of significant increase in call
                                           Both rural and urban teledensities have         prices seems bleak (due to the competitive
                                           risen in the last two years. The urban          intensity), service providers should gain
                                           teledensity has increased from 103.2 to         a comparative data service advantage on
                                           161.01 (a growth rate of 56% from Dec           which they can command a premium and
                                           09-to-Dec11), while rural teledensity has       higher profit margins. We believe that with
                                           risen from 19.95 to 36.56 (a growth rate of     increasing teledensities mobile phones
                                           83% in the same period). However, there         have become one of the most pervasive
                                           still remains a large divide between the        commodities. This offers opportunities
                                           urban and rural teledensities. In Dec 09,       to provide different types of services to
                                           the urban teledensity was 5.17 times the        consumers and new revenue streams to
                                                                                           service providers.




Number of wireless subscribers (in millions)




Source: TRAI




                                                                                               Data services and customer experience     7
Teledensity in India                                            Urban and rural percentage share




    Source: TRAI

                                          Low non-voice revenue share                    of more services under 3G and (soon to be
                                          The contribution of non-voice to overall       launched) 4G technology. The challenge
                                          revenues for the Indian service providers      remains in understanding which services
                                          is 11%-to-13% which is significantly less      will find success in the Indian market.
                                          than the developed countries (it reaches       This can be achieved by having a deep
                                          up to 30%). Even in China the contribution     understanding of the needs and behaviours
                                          of non-voice revenues is 27%. This gap is      of the Indian subscribers.
                                          expected to be bridged with the introduction


    Non-voice revenues (% of overall mobile revenues)




    Source: TRAI


8     PwC
Increase in data speed                         for services such as video streaming, apps
                                                Data speeds have increased with the            or transaction the emphasis is more on
                                                introduction of 3G services and is set to      experience than just data theoretical speed
                                                increase further with the introduction of 4G   rates. Higher speeds enable but do not
                                                in India. The speed of 3G and 4G depends       ensure better consumer experience which
                                                significantly on the type of networks          may be reduced due to other factors. Telcos
                                                being set up by the service providers.         needs to focus on this assurance of seamless
                                                However, from a consumer viewpoint,            service experience.

                                                 Protocol                  Data throughput

                                                 2.5G/GPRS                 ~144kbits/s

                                                 3G                        ~3.1mbps

                                                 4G                        ~3-5 mbps with a potential to go up to 100-300mbps


Total iPhone apps download                                                                     Increase in smartphones and
                                                                                               mobile apps
                                                                                               The use of smartphones is increasing
                    8353.3                                                                     at a rapid pace. As per the CMR, India’s
                                                                                               mobile phone sales touched 183 million
                                                                                               units in 2011, out of which smartphones
                                                                                               contributed 11.2 million units or approx
                                                                                               6% of the market share3. As per the IDC
                                                                                               research, smartphones will have a CAGR
                                                                                               of 63.4% from 2011-15 as compared to the
                                                                                               overall mobile phone shipment CAGR of
                                                                                               13.03% (for the same period) in India4.
                                                                                               Smartphones are also one of the major
                             2195.73                                                           contributors to the mobile data traffic. As
                                                                                               per the 2011 CISCO research, smartphones
                                       722.55   937.42   140.54   178.39                       generated 35 times more mobile data traffic
                                                                                               than a basic-feature mobile phone5. On
                                                                                               the other hand, a Nielson research reports
                                                                                               states that smartphones users in India
Total iPad apps downloads                                                                      spend 40% of their total active time on
                                                                                               data-centric activities6. Therefore, high data
                                                                                               consumption on smartphones, introduction
                                                                                               of more data based services and the
                                                                                               increase in number of smartphones will
                                                                                               boost data flow in operator’s networks.
                                                                                               Downloading apps and the subsequent
                                                                                               data usage will significantly increase
                                                                                               data consumption arising out of
                                                                                               3	http://www.cmrindia.com/press_releases/
                                                                                                  india_monthly_mobile_phones_market_review_
                                                                                                  for_cy_2011.asp
                                                                                               4	http://www.idc.com/getdoc.
                                                                                                  jsp?containerId=prIN23230811
                                                                                               5	http://www.cisco.com/en/US/solutions/
                                                                                                  collateral/ns341/ns525/ns537/ns705/ns827/
                                                                                                  white_paper_c11-520862.html
                                                                                               6	http://blog.nielsen.com/nielsenwire/global/
Source: Xyologic7                                                                                 in-india-google-leads-the-smartphone-app-race/
                                                                                               7	http://xyologic.com/app-downloads-reports
                                                                                                   Data services and customer experience    9
smartphones. India lags behind other           Introduction of 3G services
                                           countries in the number of apps                In 2011, India had around 15 million 3G
                                           download. This is a huge potential for         subscribers as compared to 128 million9 in
                                           telcos to introduce apps targeting Indian      China. Even though the active subscribers in
                                           subscribers and their needs. Also, the         China would be less, in comparison, India’s
                                           country’s young working population will        3G subscriber base remains quite small.
                                           boost the usage of mobile apps.                Unlike initial expectations, adoption of 3G
                                                                                          services has been slow in India. What is
                                           In Indian and US free apps market for
                                                                                          needed is not just increase in 3G subscribers
                                           iPhone, majority share is cornered by games,
                                                                                          but also an increase in activity by these
                                           entertainment and social networking apps.      subscribers. This is possible if the right
                                           Utilities and finance apps enjoy a higher      services are introduced which provide an
                                           percentage share in India than in the US,      enriching user experience, facilitating in
                                           while healthcare and fitness does not even     repeat usage of the services.
                                           feature in the Indian list. Utilities and
                                           finance apps targeted at Indian customers
                                           will increase the apps usage in India.


     Percentage share of downloads of top 150 free apps for iPhone in Dec 2011

                          India                                                               USA




     Source: Xyologic8

                                           8	http://xyologic.com/app-downloads-reports
                                           9	http://www.itu.int/ITU-D/ict/newslog/China+Ends+2011+With+128+Million+3G+Subscribe
                                              rs.aspx

10     PwC
The ecosystem for data services
                                          For services such as voice, the ecosystem       With services such as traditional voice and
                                          consists of the service providers, technology   SMS, content is produced and consumed by
                                          enablers, handset manufacturers and             the subscribers themselves. Thus, the job
                                          the subscribers. For data services the          of the service provider is to facilitate this
                                          ecosystems increases to include the content     by providing the required infrastructure.
                                          owners, mobile application developers and       Therefore, the focus in this value chain
                                          content aggregators. As more stakeholders       is more on the network and less on the
                                          are involved in its value chain, the dynamics   subscribers.
                                          of the ecosystem will keep changing before
                                          it settles down.

Ecosystem for voice services


              Handset                                       Technology                                           Handset
            manufacturers                                    provider                                          manufacturers




             Subscriber
                                Service
                               provider                 Network                            Service
                                                                                           provider
                                                                                                                  Subscriber




                                                                                          For some services such as video calling or
Ecosystem for data services
                                                                                          conference, the subscriber will continue
                                                                                          to remain the content creator while for a
                                                                                          large number of data services such as video
                                                                                          streaming, live television channels, news
                                                                                          feeds, etc. the subscriber will primarily
                                                                                          play the role of a consumer. For the latter,
                                                                                          service providers will increasingly work with
                                                                                          content owners and aggregators to source
                                                                                          and generate content demanded by the
                                                                                          users. Mobile subscribers take the centre
                                                                                          stage in data services ecosystem with rest of
                                                                                          the ecosystem working around to facilitate
                                                                                          better user experience.




                                                                                              Data services and customer experience   11
In data services value chain, content owners       Portals are offered by service providers,
                                and aggregators can provide their services         third parties and handset manufacturers
                                via a tie-up with the service provider or          such as Apple app store, Ovi store where
                                directly to the subscriber. In the direct route,   small developers can list their products.
                                the content owner or aggregator keeps the          A successful portal ensures a larger
                                entire revenue, while partnering with the          share of the revenue pie for the handset
                                service provider results in distributing it.       manufacturer, service provider and also
                                However, the latter ensures a wider reach,         increases stickiness to their core product,
                                better promotion and higher QoS resulting          mobile handset and mobile service. For
                                in larger volumes which compensate for             small content owners and aggregators, the
                                the split in revenue. We believe that smaller      choice of portals should be driven by the
                                content owner or aggregators should go             popularity of these portals and the resulting
                                for tie-ups and offer their content through        download traffic.
                                service provider or handset manufacturer
                                portals for a wider reach and success.

Value chain for data services




                                Many new data services also address the            In the future, data services and content will
                                unarticulated needs of the subscribers as          be the differentiating factors for a service
                                they are not aware whether they require            provider and the role of the telcos will
                                these services or if it is possible to get these   change from network service providers to
                                services on a mobile handset. Today, the           content providers. For exclusive content
                                subscribers do not tell what they can do with      there will be special tie-ups between telcos
                                the mobile but ask what a mobile can do for        and content producers. Services which are
                                them. As a result, the onus of identifying the     transactional in nature such as m-commerce
                                unarticulated need for new data services           will compete with other traditional channels
                                and developing these solutions lies on the         and the internet. Most e-services will have
                                new entrepreneurs and their innovations.           a business case on mobile and the trick
                                                                                   will lie in providing the right consumer




12   PwC
experience on the mobile handset. For            data service running over data networks.
                              mobile to become the preferred channel, the      We believe this will profoundly change
                              user experience of these services should be      the way operators will invest and manage
                              better than the other competing channels         their networks as they will move to a single
                              particularly the desktop Internet.               technology platform capable of handling all
                                                                               services from voice-to-data.
                              Even though the market for data services
                              looks promising there will certainly be no       Machine-to-machine services are also likely
                              one service which will be used by all. Hence,    to pick up with mobile technology getting
                              we believe that there will be a stronger         integrated in various appliances which will
                              focus on consumer analytics, segmentation        later get connected to the data network.
                              and consumer-to-service mapping to               Smart wireless automated solutions and
                              target relevant services to each segment of      next generation M2M services on 3G,
                              subscribers. This will increase the chances of   4G networks will drive demand for M2M
                              success for the services.                        service. For service providers the resulting
                                                                               traffic will lead to increased revenues.
                              Voice over LTE and even a handoff of voice
                                                                               MVNO and resellers will exploit the niches
                              call over LTE between GSM and CDMA
                                                                               in the M2M market by providing the
                              network has been successfully tested. In
                                                                               necessary quality assurance, branding and
                              the future, voice will become just another
                                                                               industry specific customisation.


Value chain for M2M service




                                                                                   Data services and customer experience   13
Enhancing customer experience
     Challenges

                  According to our analysis, the top three         Lack of customised apps
                  factors inhibiting an enhanced customer
                                                                   and services
                  experience are high tariffs for 3G services,
                  lack of customised apps and services, and        Internet browsing remains one of the
                  inferior mobile internet experience. Low         traditional ways of data consumption.
                  data speeds as compared to wireline internet     In the mobile world, mobile apps are
                  and lower mobile transaction reliability are     another major channel for data usage.
                  also constraints faced by consumers.             Mobile apps are standalone applications
                                                                   that run on the mobile phone’s operating
                  High tariffs for 3G                              system and can connect to the service
                  High prices have been one of the major           provider’s network or Wi-Fi to provide
                  impediments to the mass uptake of 3G             services like games, social networks
                  services. Presently, the prices of 3G            and news. It is far more challenging
                  services are higher than GPRS services           to provide the same service through
                  for the same amount of usage. Also,              the website or web app on the mobile
                  several 3G services guzzle large amounts         phone’s browser As a result, mobile apps
                  of data, leading to faster depletion of the      are becoming a leading source of data
                  data plan. Prices, therefore, need to be         usage on operator networks.
                  reduced. Similarly, the download quota           Flurry Analytics has reported that mobile
                  for each price point needs to be increased       apps usage by US mobile subscribers
                  in order to encourage subscribers to use         exceeded their web browsing by 22
                  data services without worrying about bill        minutes in December 201110. In the
                  shocks. More importantly, data services for      Indian market, apps usage as compared
                  3G and upcoming 4G needs to be priced            to developed countries is minuscule.
                  comparably to prices for desktop broadband       One reason for this is the lack of mobile
                  services in order to make subscribers switch     apps specific to Indian consumers. This
                  to mobile phones for services involving          is important as the needs of Indian
                  heavy downloads such as video streaming,         consumers differ from those in other
                  downloading and live streaming.                  countries. Further, even in India,
                  However, price lowering depends on mass          apps need to be customised as per the
                  consumption, which in turn depends on            region, language and needs of the local
                  price lowering. To break this vicious cycle,     population. Rather than looking for one
                  service providers need to not simply levy flat   exceptional app, developers need to
                  volume based pricing for data services. They     exploit niches. The developer community
                  need to learn from usage-based models and        in India realises this and we will see an
                  price services on models like per-second         increased number of customised apps
                  billing, per-use basis and monthly basis,        targeted at the needs of Indian subscribers
                  depending on the service. Revenue-sharing        in the future.
                  arrangements between the operator and
                  content provider will reflect the charging
                  model used. This will move consumer focus
                  from data usage to service usage.

                  10	 http://blog.flurry.com/

14   PwC
Inferior mobile internet                         especially when the user is roaming, is a
                                                                                            big challenge in a country like India. What
                                           experience
                                                                                            needs to be understood is that users are
                                           The mobile phone interface has unique            more interested in the actual experience
                                           challenges, and not all internet websites are    rather than theoretical speeds. Users tend to
                                           suited to view on mobile phones due to long      attribute poor experience to low speed, even
                                           loading times and layout issues. Though 3G       if it is caused by other factors. Therefore,
                                           offers increased data speeds, graphic-heavy      high quality and rapid delivery is of essence,
                                           websites take a long time to load and end        and developing lighter, faster applications
                                           up consuming the user’s download quota.          is one solution. As service providers make
                                           Moreover, websites designed for viewing on       more investments in their 3G networks,
                                           laptops and desktops are difficult to navigate   network-related issues will get ironed out
                                           on the smaller mobile screen, resulting          and lead to better user experience.
                                           in an inferior consumer experience.
                                           Though mobile internet is a relatively new       Low mobile transaction
                                           medium, it cannot be used as an excuse           reliability
                                           for technical issues and poor experience.
                                           Developers need to make their websites           Transactions through mobile internet
                                           mobile-friendly or develop apps that convert     should be reliable and secure. Transaction
                                           standard websites to mobile-friendly ones.       failures will make consumers switch to
                                           Mobile internet needs to compete with            another transaction medium. A failed
                                           desktop internet by providing equal or           transaction also means lost revenue for
                                           higher consumer experience to become the         retailers as users may not transact with
                                           preferred option for consumers.                  them again or switch to another retailer.
                                                                                            For example, if an m-commerce transaction
                                           Low data speeds as compared to                   to purchase a airline ticket fails, consumers
                                                                                            would likely switch to desktop internet,
                                           wireline internet
                                                                                            where they may get a better option from
                                           Data speeds have increased with 3G and are       another airline, leading to loss of revenues
                                           set to increase further with the introduction    for the original airline as well as the telecom
                                           of 4G. Users still find speeds dismal and        service provider. Similarly, subscribers are
                                           though 3G experience is better than GPRS,        likely not to reattempt a failed download of
                                           it has not quite delivered on its promise.       a game and are likely to also decide against
                                           Patchy connectivity is another issue as          downloading a wallpaper or a song due to
                                           ensuring fast 3G speeds in every region,         poor download experience the last time.

Customer satisfaction levels for various mobile services in India

                                                 Service on mobile                              Customer satisfaction level
                                                 Mobile internet

                                                 Music streaming/download

                                                 Video streaming

                                                 Video calling

                                                 Social media networking

                                                 Online gaming

                                                 M-Commerce

                                                 M-Finance

                                                 Location-based services

                                                 Mobile TV
Source: PwC analysis
                                                                                                 Data services and customer experience   15
How to improve the customer
     experience
                         Based on our analysis and interactions with
                         telecom leaders, we have identified areas
                         that deserve special focus for improving the
                         customer experience.

                         Introduction of new services
                         Service providers should continuously
                         look to provide new and innovative data
                         services, thereby opening up new revenue
                         streams. Service providers need to be open
                         to change and adopt new ways of working
                         as the existing ecosystem evolves. Nimble
                         operators will be faster to react to market
                         conditions and will have the first-mover
                         advantage in the market by introducing
                         new customer-focused data services.
                         MVNOs are likely to grow as they can take
                         bulk capacity from incumbents and use
                         it to offer new innovative data services,
                         which the incumbents are not providing.
                         The table below shows some innovative
                         services introduced around the world.
                         Telecom market players in India will need
                         to introduce innovative services like their
                         global counterparts.




16   PwC
Data services available in some countries


Country              Top services                        Some innovative services

China                Video calls, M-news , Music club,   •	  oney: Lottery, stock trading, shopping
                                                            M
                     Instant messaging Mobile internet   •	  tilities: Emergency location, online translation, online virus kill,
                                                            U
                                                            travel services
                                                         •	  usiness-related: CRM, training, medical treatment, remote education
                                                            B
                                                         •	  -commerce: coupons, tickets extending to physical goods
                                                            M

Japan                UGC, messaging followed by social   •	  ogging advisor: This service allows users to check their jogging courses,
                                                            J
                     networking services                    calories consumed, download locations and jogging programmes.
                                                         •	  riend Finder: This service prompts subscribers regarding friends who are
                                                            F
                                                            nearby and provides directional maps to reach them.
                                                         •	  nline music store: This service allows users to download, copy and share
                                                            O
                                                            music on a mobile phone.
                                                         •	  here are services that offer remote medical diagnostics, remote education
                                                            T
                                                            and route navigation.
                                                         •	  ome services allow users to decorate their emails with personalised videos
                                                            S
                                                            and animations.
                                                         •	  ome gaming services let users find friends in their vicinity and play
                                                            S
                                                            interactive games.
                                                         •	  sers can also purchase items on the spot using links while watching TV
                                                            U
                                                            shopping programmes.

Australia            Mobile TV, mobile internet,         •	  obile TV: Delivers condensed clips of TV shows in the form of ‘mobisodes’
                                                            M
                     ringtones, streaming, m-maps           and unlimited access to mobile cricket TV
                                                         •	  ptus Zoo: Combines live TV, video sport, entertainment bulletins, news
                                                            O
                                                            headlines and broadband access
                                                         •	  aypal Mobile Checkout: Browser-based mobile banking services for
                                                            P
                                                            account balances and money transfers
                                                         •	  ost-paid subscribers can purchase goods and services via phone and add
                                                            P
                                                            the amount to their phone bill.

South Korea          TV, video broadcasting,             •	  -commerce: Gift certificates, e-money, stocks, lottery using barcodes,
                                                            M
                     M-commerce, Music, games               commerce gateways
                                                         •	  ublic portals: Information about real estate, libraries, public health,
                                                            P
                                                            tourism, suggestions
                                                         •	 Mobile as a Smart Card
                                                         •	  R Commerce: QR Codes storing addresses and URLs appear in magazines
                                                            Q
                                                            and on signs, buses, etc. Users can scan the image of the QR Code to display
                                                            text and contact information, connect to a network or open a web page in
                                                            the phone’s browser.

USA                  Games, news, maps, social           •	 Facebook, Google Maps and weather channels
                     networking and music                •	 Mobile advertising via messaging, display, search and videos



Source: PwC analysis and various sources




                                                                                                 Data services and customer experience   17
Focus on individual subscribers                Spectrum constraints will become more
           Mobile service providers need to identify      acute as rich media content drives data
           and segment subscriber groups with             traffic on the network. For efficient usage
           similar behaviours and customise the           of spectrum and network resources,
           products and services for each group.          configuration of quality of service (QoS)
           Service providers will increasingly try        parameters will be customised for
           to understand the usage pattern of their       subscribers having similar usage patterns.
           subscribers, trends for different data         So a subscriber who is a heavy user of
           services and issues affecting the network      mobile TV, but not of music streaming,
           performance to offer customised options        will have higher QoS delivered for mobile
           for subscribers. This will enhance the         TV service rather than music streaming.
           experience level of service usage. Offerings   Similarly, if location-based services are more
           will be customised in terms of price,          popular in urban areas and m-education
           usage and bouquet of services used by          services are popular in rural areas, then
           the subscriber. Customer experience            higher QoS will be provided for location-
           management (CXM) solutions and                 based services and m-education services in
           analytics will play a large role in offering   these areas, respectively.
           this level of customisation.




18   PwC
Content Delivery Network                        Consumer experience service-
(CDN)                                           level agreements (CE-SLAs)
Growing demand for media and                    SLAs for meeting the quality of experience
entertainment content will also raise           are the most important SLAs in the delivery
customer demand for higher quality. This        of data services. Different functions in the
demand will be even more pressing as            service provider must avoid working in silos
distribution of content becomes more            and should be bound together by consumer
global in nature. CDNs enable improved          experience SLAs. These SLAs need to be
user access through the use of caching          carefully defined after understanding
and streaming techniques. A content             the experience level at which the user
delivery network caches the content on          would be delighted and also the level at
the peripheries of the network and uses         which they would stop using the service.
intelligent routing mechanisms. This            Once the consumer experience SLAs are
reduces the distance content has to travel to   defined, they should be regularly measured
reach the end user, thereby reducing waiting    and monitored and should become a key
time and substantially increasing customer      performance indicator for the organisation.
experience. Scale, speed and reliability of     Customer service agents should also be
infrastructure are extremely important for      trained adequately to develop insights into
customer satisfaction.                          customer experience. This will help them in
                                                servicing the customers better.
In the CDN value chain, two scenarios are
possible. In the first, pure play CDN players   Consumer preference and behaviours
such as Akamai and EdgeCast provide CDN         will change quickly for data services,
services to telecommunications companies        especially with new disruptive services
(telcos) with the support technology service    and business models expected to gain
providers like IBM and Adobe providing          more traction in the market. Therefore,
hardware and equipments. Telcos can             all service providers, whether incumbent
further provide CDN services to content         or new, should continuously monitor
owners like news and entertainment              consumer behaviours to spot changes in
companies like ZEE and CNBC or content          user preferences and change their product
aggregators like Youtube. In the second         portfolio, service offerings and consumer
value chain, pure play CDNs can take the        experience SLAs accordingly.
capacity from telcos and directly sell CDN
solutions to content owners and content
aggregators. Initially, service providers
should partner with pure play CDN players,
but as the usage of rich media content
increases, incumbent operators should
set up their own CDN networks providing
better service experience to users on their
networks and also monetising their CDN
networks by offering CDN services to
enterprise customers.




                                                    Data services and customer experience   19
Glossary
           CE 	              Customer experience/consumer experience
           TRAI	             Telecom Regulatory Authority of India
           CDN	              Content delivery networks
           M2M	              Machine to machine
           Apps 	            Mobile applications
           LTE	              Long-Term Evolution, standard for high-speed data wireless communication
           3G	               Third-generation wireless cellular standard
           4G	               Fourth-generation wireless cellular standard
           VAS	              Value-added services
           ARPU	             Average revenue per user
           BFSI	             Banking and financial services industry
           GSM	              Global System for Mobile Communications, wireless communication technology
           CDMA	             Code division multiple access, wireless communication technology
           Apple apps store 	 Mobile applications and music store from Apple Inc.
           OVI store	        Mobile applications and music store from Nokia
           MVNO	             Mobile virtual network operator
           CXM	              Customer experience management
           QoS	              Quality of service
           SLA	              Service level agreement
           KPI	              Key performance indicator




20   PwC
Notes




        Data services and customer experience   21
About Exhibitions India Group
        Exhibitions India Group is a trade promotion organisation creating opportunities for investments, joint
        ventures and technology transfers through the platform of international exhibitions and conferences.
        The Group is an interface between the government, business, academia, society and media.
        The Group has been in existence since 1987.
        The Group’s portfolio of event includes:
        -	 Convergence India Expo: South Asia’s largest ICT event
        -	 Indian Business Aviation Expo: India’s dedicated business and general aviation event
        -	 Wave, Pool, Spa and Bath Expo: India’s first wet-wellness industry event
        Exhibitions India Group is the only trade fair and conference organiser in India with ISO 9001:2000 
        ISO 14001:2004 Certification.
        The Group is a member of UFI (The Global Association of Exhibitions Industry) and IAE (The
        International Association of Events  Exhibitions).
        Headquartered in New Delhi, the Group has branches in Ahmedabad, Bangalore, Chennai, Hyderabad
        and, Mumbai, and international offices in California (USA), Dubai (UAE) and Tokyo (Japan).
        For more information, please visit: www.exhibitionsindiagroup.com



        Contacts
        Bunny Sidhu
        Sr. VP, Exhibitions India Group
        Phone: 09873343925
        Email: bunnys@eigroup.in
About PwC
      PwC firms provide industry-focused assurance, tax and advisory services to enhance value for their
      clients. More than 161,000 people in 154 countries in firms across the PwC network share their thinking,
      experience and solutions to develop fresh perspectives and practical advice. See pwc.com for more
      information.
      At PwC, we push ourselves - and our clients - to think harder, to understand the consequences of every
      action and to consider new perspectives. Our goal is to deliver a distinctive experience to our clients and
      people around the world.
      In India, PwC (www.pwc.com/India) offers a comprehensive portfolio of Advisory and Tax  Regulatory
      services; each, in turn, presents a basket of finely defined deliverables. Network firms of PwC in India
      also provide services in Assurance as per the relevant rules and regulations in India.
      Complementing our depth of industry expertise and breadth of skills is our sound knowledge of the local
      business environment in India. We are committed to working with our clients in India and beyond to
      deliver the solutions that help them take on the challenges of the ever-changing business environment.
      PwC has offices in Ahmedabad, Bangalore, Bhubaneshwar, Chennai, Delhi NCR, Hyderabad, Kolkata,
      Mumbai and Pune.




      Contacts
      For more information, please visit: http://www.pwc.com/in/en/industries/telecom.jhtml
www.pwc.com/india




This publication does not constitute professional advice. The information in this publication has been obtained or derived from sources
believed by PricewaterhouseCoopers Private Limited (PwCPL) to be reliable but PwCPL does not represent that this information is accurate
or complete. Any opinions or estimates contained in this publication represent the judgment of PwCPL at this time and are subject to
change without notice. Readers of this publication are advised to seek their own professional advice before taking any course of action or
decision, for which they are entirely responsible, based on the contents of this publication. PwCPL neither accepts or assumes any
responsibility or liability to any reader of this publication in respect of the information contained within it or for any decisions readers may
take or decide not to or fail to take.

© 2012 PricewaterhouseCoopers Private Limited. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers Private
Limited (a limited liability company in India), which is a member firm of PricewaterhouseCoopers International Limited (PwCIL), each member
firm of which is a separate legal entity.

CG 297- March 2012 Convergent report.indd
Designed by: PwC Brand and Communications, India

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Convergence india 2012

  • 1. www.pwc.com/india Data services and customer experience Venue: Pragati Maidan Date: 21 - 23 March 2012
  • 2. 2 PwC
  • 3. Contents Introduction 4 Customer experience 5 Current scenario 6 The ecosystem for data services 11 Enhancing customer experience – Challenges 14 How to improve the customer experience 16 Glossary 20 Data services and customer experience 3
  • 4. Introduction According to the latest data released by will be introduced later this year. Thus, the the Telecom Regulatory Authority of India adoption of high speed data services can (TRAI), by the end of December 2011, the turn out to be a prolonged battle rather than country’s mobile telephone subscriber churning out quick gains. This has proved base increased to 893.84 million. The high that it is not just about faster data speeds but teledensity in urban areas has shifted the building an ecosystem which can provide focus on rural areas to maintain the number customised experiences to consumers. In of subscriber additions per month. Voice this white paper, we look at the challenges revenues tend to plateau as the number of in adoption of the data and vas service in subscriber additions moderate. With call India and how service providers can focus charges at an all time low it is unlikely for on increasing customer satisfaction. users to increase the number of outgoing PwC is delighted to be a partner to the voice calls no matter what plan, promotion 20th Convergence India 2012 event. As or pricing is used. Besides, rural subscribers an introduction to the issues which will have a low ARPU. This makes it imperative be covered in the proceedings, it gives for the Indian telcos to look for additional us great pleasure to introduce the key sources of revenues. Introduction of the new topics of driving the Customer Experience VAS services is a right step in this direction. in telecoms and the Ecosystem for Data The advent of 3G services and improved Services in these next few sections. data speeds (lack of which was seen as Customer Experience is probably the key a detriment to faster adoption of data concern today of the Chief Marketing services) was expected to change the Officer, with the convergence of device, landscape of data services. However, this service and network to a level never inflection point did not turn the way it was seen before. The implications will expected. While 3G created a huge buzz, spread from customer experience as we its adoption was not met with the same know it, to related areas, such as retail, zeal. Besides, the service providers are and distribution. We will be releasing looking forward to the 4G services which provocative thinking on these topics in the near future. 4 PwC
  • 5. Customer experience The TM Forum defines customer experience Increasing consumer experience acts or consumer experience as, “The result as a differentiating factor for the telcos of the sum of observations, perceptions, and provides them with a sustainable thoughts and feelings arising from competitive advantage over competitors. An interactions and relationships between organisation can have product or services customers and their service provider(s).”1 providing different levels of consumer experience. E.g., in the BFSI industry, a Consumer experience arises from touch bank can be highly renowned for their points i.e., what a consumer experiences services in retail banking but commercial from the start till the end of using a product banking services may not be equally good. or service. It is not limited to the experience As each product or service has its own but also involves how the product or service individual characteristics, they also have was delivered. In fact, all products or core their own set of challenges in meeting the service are enveloped by an additional required level of consumer experience. This service delivery layer which covers areas is particularly the case between voice and such as sales management (pricing and sales data services. Data services provide rich channel), billing management, receivable multimedia applications and require high management (collections and disputes) and level of consumer interaction during service customer care functions. consumption. As mobile is a new platform, consumers may give some leeway to service operators for poor quality of experience. Layers of customer experience However, this will not last as consumer demands for data service picks up, the demand for a better experience of using these services will also increase. Receivable Before delving on the unique challenges Core product management of providing consumer experience for data or service services in India, we need to look at how the country’s data services market is shaping up. A high potential demand should not only encourage the telcos to increase the bouquet Product or of data services but also the customer Billing Sales service consumption satisfaction associated with these services. management management Customer care function Service delivery envelope 1 http://www.tmforum.org/ManagingCustomerExperience/6513/home. html?linkid=37898docid=12601 Data services and customer experience 5
  • 6. Current scenario The Indian telecommunication sector Decline in the ARPU has attracted telecommunication service providers from around the world. For the past two years (Sept 09 - to - Sept With 893 million2 plus subscribers and 11) average revenues per users have been counting and the country’s subscriber steadily declining in the Indian telecom data usage picking up, there are immense sector for GSM (around 43%) and CDMA opportunities for global service providers. (20%) subscribers. This is primarily due to The evolving ecosystem for data services the falling call charges which are one of the presents opportunities for innovations cheapest in the world. However, the minutes and entrepreneurship. However, amidst of its usage have shown downward trend in all this, telcos tend to lose focus on the the same period (falling by 22% for GSM most important thing-the consumer. and 25%for CDMA). This shows that there With multiple channels available, only is a limit to which users can increase their an enriching experience will make the talk-time. consumer choose mobile as his preferred choice of communication. 2 http://www.trai.gov.in/WriteReadData/trai/ upload/PressReleases/869/PR-Dec-11.pdf Average revenue trend per user each month (in INR) Source: TRAI Minutes of usage per subscriber each month Source: TRAI 6 PwC
  • 7. Increase in the subscriber base rural teledensity which reduced to 4.40 Currently, as per the TRAI data, the times in Dec11. While urban markets are number of subscriber additions is strong nearing saturation, good potential still (around 142 million wireless subscribers exists in rural teledensities. We believe were added in 2011 alone, an increase of that majority of the subscriber additions 19%). This trend is likely to continue in will occur in category B and C cities along 2012. Even though the overall teledensity with rural areas. has reached to around 74% (December However, subscribers in these areas have a 2011) there still exists a significant amount lower ARPU and it is unlikely to go up. As of untapped potential the prospect of significant increase in call Both rural and urban teledensities have prices seems bleak (due to the competitive risen in the last two years. The urban intensity), service providers should gain teledensity has increased from 103.2 to a comparative data service advantage on 161.01 (a growth rate of 56% from Dec which they can command a premium and 09-to-Dec11), while rural teledensity has higher profit margins. We believe that with risen from 19.95 to 36.56 (a growth rate of increasing teledensities mobile phones 83% in the same period). However, there have become one of the most pervasive still remains a large divide between the commodities. This offers opportunities urban and rural teledensities. In Dec 09, to provide different types of services to the urban teledensity was 5.17 times the consumers and new revenue streams to service providers. Number of wireless subscribers (in millions) Source: TRAI Data services and customer experience 7
  • 8. Teledensity in India Urban and rural percentage share Source: TRAI Low non-voice revenue share of more services under 3G and (soon to be The contribution of non-voice to overall launched) 4G technology. The challenge revenues for the Indian service providers remains in understanding which services is 11%-to-13% which is significantly less will find success in the Indian market. than the developed countries (it reaches This can be achieved by having a deep up to 30%). Even in China the contribution understanding of the needs and behaviours of non-voice revenues is 27%. This gap is of the Indian subscribers. expected to be bridged with the introduction Non-voice revenues (% of overall mobile revenues) Source: TRAI 8 PwC
  • 9. Increase in data speed for services such as video streaming, apps Data speeds have increased with the or transaction the emphasis is more on introduction of 3G services and is set to experience than just data theoretical speed increase further with the introduction of 4G rates. Higher speeds enable but do not in India. The speed of 3G and 4G depends ensure better consumer experience which significantly on the type of networks may be reduced due to other factors. Telcos being set up by the service providers. needs to focus on this assurance of seamless However, from a consumer viewpoint, service experience. Protocol Data throughput 2.5G/GPRS ~144kbits/s 3G ~3.1mbps 4G ~3-5 mbps with a potential to go up to 100-300mbps Total iPhone apps download Increase in smartphones and mobile apps The use of smartphones is increasing 8353.3 at a rapid pace. As per the CMR, India’s mobile phone sales touched 183 million units in 2011, out of which smartphones contributed 11.2 million units or approx 6% of the market share3. As per the IDC research, smartphones will have a CAGR of 63.4% from 2011-15 as compared to the overall mobile phone shipment CAGR of 13.03% (for the same period) in India4. Smartphones are also one of the major 2195.73 contributors to the mobile data traffic. As per the 2011 CISCO research, smartphones 722.55 937.42 140.54 178.39 generated 35 times more mobile data traffic than a basic-feature mobile phone5. On the other hand, a Nielson research reports states that smartphones users in India Total iPad apps downloads spend 40% of their total active time on data-centric activities6. Therefore, high data consumption on smartphones, introduction of more data based services and the increase in number of smartphones will boost data flow in operator’s networks. Downloading apps and the subsequent data usage will significantly increase data consumption arising out of 3 http://www.cmrindia.com/press_releases/ india_monthly_mobile_phones_market_review_ for_cy_2011.asp 4 http://www.idc.com/getdoc. jsp?containerId=prIN23230811 5 http://www.cisco.com/en/US/solutions/ collateral/ns341/ns525/ns537/ns705/ns827/ white_paper_c11-520862.html 6 http://blog.nielsen.com/nielsenwire/global/ Source: Xyologic7 in-india-google-leads-the-smartphone-app-race/ 7 http://xyologic.com/app-downloads-reports Data services and customer experience 9
  • 10. smartphones. India lags behind other Introduction of 3G services countries in the number of apps In 2011, India had around 15 million 3G download. This is a huge potential for subscribers as compared to 128 million9 in telcos to introduce apps targeting Indian China. Even though the active subscribers in subscribers and their needs. Also, the China would be less, in comparison, India’s country’s young working population will 3G subscriber base remains quite small. boost the usage of mobile apps. Unlike initial expectations, adoption of 3G services has been slow in India. What is In Indian and US free apps market for needed is not just increase in 3G subscribers iPhone, majority share is cornered by games, but also an increase in activity by these entertainment and social networking apps. subscribers. This is possible if the right Utilities and finance apps enjoy a higher services are introduced which provide an percentage share in India than in the US, enriching user experience, facilitating in while healthcare and fitness does not even repeat usage of the services. feature in the Indian list. Utilities and finance apps targeted at Indian customers will increase the apps usage in India. Percentage share of downloads of top 150 free apps for iPhone in Dec 2011 India USA Source: Xyologic8 8 http://xyologic.com/app-downloads-reports 9 http://www.itu.int/ITU-D/ict/newslog/China+Ends+2011+With+128+Million+3G+Subscribe rs.aspx 10 PwC
  • 11. The ecosystem for data services For services such as voice, the ecosystem With services such as traditional voice and consists of the service providers, technology SMS, content is produced and consumed by enablers, handset manufacturers and the subscribers themselves. Thus, the job the subscribers. For data services the of the service provider is to facilitate this ecosystems increases to include the content by providing the required infrastructure. owners, mobile application developers and Therefore, the focus in this value chain content aggregators. As more stakeholders is more on the network and less on the are involved in its value chain, the dynamics subscribers. of the ecosystem will keep changing before it settles down. Ecosystem for voice services Handset Technology Handset manufacturers provider manufacturers Subscriber Service provider Network Service provider Subscriber For some services such as video calling or Ecosystem for data services conference, the subscriber will continue to remain the content creator while for a large number of data services such as video streaming, live television channels, news feeds, etc. the subscriber will primarily play the role of a consumer. For the latter, service providers will increasingly work with content owners and aggregators to source and generate content demanded by the users. Mobile subscribers take the centre stage in data services ecosystem with rest of the ecosystem working around to facilitate better user experience. Data services and customer experience 11
  • 12. In data services value chain, content owners Portals are offered by service providers, and aggregators can provide their services third parties and handset manufacturers via a tie-up with the service provider or such as Apple app store, Ovi store where directly to the subscriber. In the direct route, small developers can list their products. the content owner or aggregator keeps the A successful portal ensures a larger entire revenue, while partnering with the share of the revenue pie for the handset service provider results in distributing it. manufacturer, service provider and also However, the latter ensures a wider reach, increases stickiness to their core product, better promotion and higher QoS resulting mobile handset and mobile service. For in larger volumes which compensate for small content owners and aggregators, the the split in revenue. We believe that smaller choice of portals should be driven by the content owner or aggregators should go popularity of these portals and the resulting for tie-ups and offer their content through download traffic. service provider or handset manufacturer portals for a wider reach and success. Value chain for data services Many new data services also address the In the future, data services and content will unarticulated needs of the subscribers as be the differentiating factors for a service they are not aware whether they require provider and the role of the telcos will these services or if it is possible to get these change from network service providers to services on a mobile handset. Today, the content providers. For exclusive content subscribers do not tell what they can do with there will be special tie-ups between telcos the mobile but ask what a mobile can do for and content producers. Services which are them. As a result, the onus of identifying the transactional in nature such as m-commerce unarticulated need for new data services will compete with other traditional channels and developing these solutions lies on the and the internet. Most e-services will have new entrepreneurs and their innovations. a business case on mobile and the trick will lie in providing the right consumer 12 PwC
  • 13. experience on the mobile handset. For data service running over data networks. mobile to become the preferred channel, the We believe this will profoundly change user experience of these services should be the way operators will invest and manage better than the other competing channels their networks as they will move to a single particularly the desktop Internet. technology platform capable of handling all services from voice-to-data. Even though the market for data services looks promising there will certainly be no Machine-to-machine services are also likely one service which will be used by all. Hence, to pick up with mobile technology getting we believe that there will be a stronger integrated in various appliances which will focus on consumer analytics, segmentation later get connected to the data network. and consumer-to-service mapping to Smart wireless automated solutions and target relevant services to each segment of next generation M2M services on 3G, subscribers. This will increase the chances of 4G networks will drive demand for M2M success for the services. service. For service providers the resulting traffic will lead to increased revenues. Voice over LTE and even a handoff of voice MVNO and resellers will exploit the niches call over LTE between GSM and CDMA in the M2M market by providing the network has been successfully tested. In necessary quality assurance, branding and the future, voice will become just another industry specific customisation. Value chain for M2M service Data services and customer experience 13
  • 14. Enhancing customer experience Challenges According to our analysis, the top three Lack of customised apps factors inhibiting an enhanced customer and services experience are high tariffs for 3G services, lack of customised apps and services, and Internet browsing remains one of the inferior mobile internet experience. Low traditional ways of data consumption. data speeds as compared to wireline internet In the mobile world, mobile apps are and lower mobile transaction reliability are another major channel for data usage. also constraints faced by consumers. Mobile apps are standalone applications that run on the mobile phone’s operating High tariffs for 3G system and can connect to the service High prices have been one of the major provider’s network or Wi-Fi to provide impediments to the mass uptake of 3G services like games, social networks services. Presently, the prices of 3G and news. It is far more challenging services are higher than GPRS services to provide the same service through for the same amount of usage. Also, the website or web app on the mobile several 3G services guzzle large amounts phone’s browser As a result, mobile apps of data, leading to faster depletion of the are becoming a leading source of data data plan. Prices, therefore, need to be usage on operator networks. reduced. Similarly, the download quota Flurry Analytics has reported that mobile for each price point needs to be increased apps usage by US mobile subscribers in order to encourage subscribers to use exceeded their web browsing by 22 data services without worrying about bill minutes in December 201110. In the shocks. More importantly, data services for Indian market, apps usage as compared 3G and upcoming 4G needs to be priced to developed countries is minuscule. comparably to prices for desktop broadband One reason for this is the lack of mobile services in order to make subscribers switch apps specific to Indian consumers. This to mobile phones for services involving is important as the needs of Indian heavy downloads such as video streaming, consumers differ from those in other downloading and live streaming. countries. Further, even in India, However, price lowering depends on mass apps need to be customised as per the consumption, which in turn depends on region, language and needs of the local price lowering. To break this vicious cycle, population. Rather than looking for one service providers need to not simply levy flat exceptional app, developers need to volume based pricing for data services. They exploit niches. The developer community need to learn from usage-based models and in India realises this and we will see an price services on models like per-second increased number of customised apps billing, per-use basis and monthly basis, targeted at the needs of Indian subscribers depending on the service. Revenue-sharing in the future. arrangements between the operator and content provider will reflect the charging model used. This will move consumer focus from data usage to service usage. 10 http://blog.flurry.com/ 14 PwC
  • 15. Inferior mobile internet especially when the user is roaming, is a big challenge in a country like India. What experience needs to be understood is that users are The mobile phone interface has unique more interested in the actual experience challenges, and not all internet websites are rather than theoretical speeds. Users tend to suited to view on mobile phones due to long attribute poor experience to low speed, even loading times and layout issues. Though 3G if it is caused by other factors. Therefore, offers increased data speeds, graphic-heavy high quality and rapid delivery is of essence, websites take a long time to load and end and developing lighter, faster applications up consuming the user’s download quota. is one solution. As service providers make Moreover, websites designed for viewing on more investments in their 3G networks, laptops and desktops are difficult to navigate network-related issues will get ironed out on the smaller mobile screen, resulting and lead to better user experience. in an inferior consumer experience. Though mobile internet is a relatively new Low mobile transaction medium, it cannot be used as an excuse reliability for technical issues and poor experience. Developers need to make their websites Transactions through mobile internet mobile-friendly or develop apps that convert should be reliable and secure. Transaction standard websites to mobile-friendly ones. failures will make consumers switch to Mobile internet needs to compete with another transaction medium. A failed desktop internet by providing equal or transaction also means lost revenue for higher consumer experience to become the retailers as users may not transact with preferred option for consumers. them again or switch to another retailer. For example, if an m-commerce transaction Low data speeds as compared to to purchase a airline ticket fails, consumers would likely switch to desktop internet, wireline internet where they may get a better option from Data speeds have increased with 3G and are another airline, leading to loss of revenues set to increase further with the introduction for the original airline as well as the telecom of 4G. Users still find speeds dismal and service provider. Similarly, subscribers are though 3G experience is better than GPRS, likely not to reattempt a failed download of it has not quite delivered on its promise. a game and are likely to also decide against Patchy connectivity is another issue as downloading a wallpaper or a song due to ensuring fast 3G speeds in every region, poor download experience the last time. Customer satisfaction levels for various mobile services in India Service on mobile Customer satisfaction level Mobile internet Music streaming/download Video streaming Video calling Social media networking Online gaming M-Commerce M-Finance Location-based services Mobile TV Source: PwC analysis Data services and customer experience 15
  • 16. How to improve the customer experience Based on our analysis and interactions with telecom leaders, we have identified areas that deserve special focus for improving the customer experience. Introduction of new services Service providers should continuously look to provide new and innovative data services, thereby opening up new revenue streams. Service providers need to be open to change and adopt new ways of working as the existing ecosystem evolves. Nimble operators will be faster to react to market conditions and will have the first-mover advantage in the market by introducing new customer-focused data services. MVNOs are likely to grow as they can take bulk capacity from incumbents and use it to offer new innovative data services, which the incumbents are not providing. The table below shows some innovative services introduced around the world. Telecom market players in India will need to introduce innovative services like their global counterparts. 16 PwC
  • 17. Data services available in some countries Country Top services Some innovative services China Video calls, M-news , Music club, • oney: Lottery, stock trading, shopping M Instant messaging Mobile internet • tilities: Emergency location, online translation, online virus kill, U travel services • usiness-related: CRM, training, medical treatment, remote education B • -commerce: coupons, tickets extending to physical goods M Japan UGC, messaging followed by social • ogging advisor: This service allows users to check their jogging courses, J networking services calories consumed, download locations and jogging programmes. • riend Finder: This service prompts subscribers regarding friends who are F nearby and provides directional maps to reach them. • nline music store: This service allows users to download, copy and share O music on a mobile phone. • here are services that offer remote medical diagnostics, remote education T and route navigation. • ome services allow users to decorate their emails with personalised videos S and animations. • ome gaming services let users find friends in their vicinity and play S interactive games. • sers can also purchase items on the spot using links while watching TV U shopping programmes. Australia Mobile TV, mobile internet, • obile TV: Delivers condensed clips of TV shows in the form of ‘mobisodes’ M ringtones, streaming, m-maps and unlimited access to mobile cricket TV • ptus Zoo: Combines live TV, video sport, entertainment bulletins, news O headlines and broadband access • aypal Mobile Checkout: Browser-based mobile banking services for P account balances and money transfers • ost-paid subscribers can purchase goods and services via phone and add P the amount to their phone bill. South Korea TV, video broadcasting, • -commerce: Gift certificates, e-money, stocks, lottery using barcodes, M M-commerce, Music, games commerce gateways • ublic portals: Information about real estate, libraries, public health, P tourism, suggestions • Mobile as a Smart Card • R Commerce: QR Codes storing addresses and URLs appear in magazines Q and on signs, buses, etc. Users can scan the image of the QR Code to display text and contact information, connect to a network or open a web page in the phone’s browser. USA Games, news, maps, social • Facebook, Google Maps and weather channels networking and music • Mobile advertising via messaging, display, search and videos Source: PwC analysis and various sources Data services and customer experience 17
  • 18. Focus on individual subscribers Spectrum constraints will become more Mobile service providers need to identify acute as rich media content drives data and segment subscriber groups with traffic on the network. For efficient usage similar behaviours and customise the of spectrum and network resources, products and services for each group. configuration of quality of service (QoS) Service providers will increasingly try parameters will be customised for to understand the usage pattern of their subscribers having similar usage patterns. subscribers, trends for different data So a subscriber who is a heavy user of services and issues affecting the network mobile TV, but not of music streaming, performance to offer customised options will have higher QoS delivered for mobile for subscribers. This will enhance the TV service rather than music streaming. experience level of service usage. Offerings Similarly, if location-based services are more will be customised in terms of price, popular in urban areas and m-education usage and bouquet of services used by services are popular in rural areas, then the subscriber. Customer experience higher QoS will be provided for location- management (CXM) solutions and based services and m-education services in analytics will play a large role in offering these areas, respectively. this level of customisation. 18 PwC
  • 19. Content Delivery Network Consumer experience service- (CDN) level agreements (CE-SLAs) Growing demand for media and SLAs for meeting the quality of experience entertainment content will also raise are the most important SLAs in the delivery customer demand for higher quality. This of data services. Different functions in the demand will be even more pressing as service provider must avoid working in silos distribution of content becomes more and should be bound together by consumer global in nature. CDNs enable improved experience SLAs. These SLAs need to be user access through the use of caching carefully defined after understanding and streaming techniques. A content the experience level at which the user delivery network caches the content on would be delighted and also the level at the peripheries of the network and uses which they would stop using the service. intelligent routing mechanisms. This Once the consumer experience SLAs are reduces the distance content has to travel to defined, they should be regularly measured reach the end user, thereby reducing waiting and monitored and should become a key time and substantially increasing customer performance indicator for the organisation. experience. Scale, speed and reliability of Customer service agents should also be infrastructure are extremely important for trained adequately to develop insights into customer satisfaction. customer experience. This will help them in servicing the customers better. In the CDN value chain, two scenarios are possible. In the first, pure play CDN players Consumer preference and behaviours such as Akamai and EdgeCast provide CDN will change quickly for data services, services to telecommunications companies especially with new disruptive services (telcos) with the support technology service and business models expected to gain providers like IBM and Adobe providing more traction in the market. Therefore, hardware and equipments. Telcos can all service providers, whether incumbent further provide CDN services to content or new, should continuously monitor owners like news and entertainment consumer behaviours to spot changes in companies like ZEE and CNBC or content user preferences and change their product aggregators like Youtube. In the second portfolio, service offerings and consumer value chain, pure play CDNs can take the experience SLAs accordingly. capacity from telcos and directly sell CDN solutions to content owners and content aggregators. Initially, service providers should partner with pure play CDN players, but as the usage of rich media content increases, incumbent operators should set up their own CDN networks providing better service experience to users on their networks and also monetising their CDN networks by offering CDN services to enterprise customers. Data services and customer experience 19
  • 20. Glossary CE Customer experience/consumer experience TRAI Telecom Regulatory Authority of India CDN Content delivery networks M2M Machine to machine Apps Mobile applications LTE Long-Term Evolution, standard for high-speed data wireless communication 3G Third-generation wireless cellular standard 4G Fourth-generation wireless cellular standard VAS Value-added services ARPU Average revenue per user BFSI Banking and financial services industry GSM Global System for Mobile Communications, wireless communication technology CDMA Code division multiple access, wireless communication technology Apple apps store Mobile applications and music store from Apple Inc. OVI store Mobile applications and music store from Nokia MVNO Mobile virtual network operator CXM Customer experience management QoS Quality of service SLA Service level agreement KPI Key performance indicator 20 PwC
  • 21. Notes Data services and customer experience 21
  • 22. About Exhibitions India Group Exhibitions India Group is a trade promotion organisation creating opportunities for investments, joint ventures and technology transfers through the platform of international exhibitions and conferences. The Group is an interface between the government, business, academia, society and media. The Group has been in existence since 1987. The Group’s portfolio of event includes: - Convergence India Expo: South Asia’s largest ICT event - Indian Business Aviation Expo: India’s dedicated business and general aviation event - Wave, Pool, Spa and Bath Expo: India’s first wet-wellness industry event Exhibitions India Group is the only trade fair and conference organiser in India with ISO 9001:2000 ISO 14001:2004 Certification. The Group is a member of UFI (The Global Association of Exhibitions Industry) and IAE (The International Association of Events Exhibitions). Headquartered in New Delhi, the Group has branches in Ahmedabad, Bangalore, Chennai, Hyderabad and, Mumbai, and international offices in California (USA), Dubai (UAE) and Tokyo (Japan). For more information, please visit: www.exhibitionsindiagroup.com Contacts Bunny Sidhu Sr. VP, Exhibitions India Group Phone: 09873343925 Email: bunnys@eigroup.in
  • 23. About PwC PwC firms provide industry-focused assurance, tax and advisory services to enhance value for their clients. More than 161,000 people in 154 countries in firms across the PwC network share their thinking, experience and solutions to develop fresh perspectives and practical advice. See pwc.com for more information. At PwC, we push ourselves - and our clients - to think harder, to understand the consequences of every action and to consider new perspectives. Our goal is to deliver a distinctive experience to our clients and people around the world. In India, PwC (www.pwc.com/India) offers a comprehensive portfolio of Advisory and Tax Regulatory services; each, in turn, presents a basket of finely defined deliverables. Network firms of PwC in India also provide services in Assurance as per the relevant rules and regulations in India. Complementing our depth of industry expertise and breadth of skills is our sound knowledge of the local business environment in India. We are committed to working with our clients in India and beyond to deliver the solutions that help them take on the challenges of the ever-changing business environment. PwC has offices in Ahmedabad, Bangalore, Bhubaneshwar, Chennai, Delhi NCR, Hyderabad, Kolkata, Mumbai and Pune. Contacts For more information, please visit: http://www.pwc.com/in/en/industries/telecom.jhtml
  • 24. www.pwc.com/india This publication does not constitute professional advice. The information in this publication has been obtained or derived from sources believed by PricewaterhouseCoopers Private Limited (PwCPL) to be reliable but PwCPL does not represent that this information is accurate or complete. Any opinions or estimates contained in this publication represent the judgment of PwCPL at this time and are subject to change without notice. Readers of this publication are advised to seek their own professional advice before taking any course of action or decision, for which they are entirely responsible, based on the contents of this publication. PwCPL neither accepts or assumes any responsibility or liability to any reader of this publication in respect of the information contained within it or for any decisions readers may take or decide not to or fail to take. © 2012 PricewaterhouseCoopers Private Limited. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers Private Limited (a limited liability company in India), which is a member firm of PricewaterhouseCoopers International Limited (PwCIL), each member firm of which is a separate legal entity. CG 297- March 2012 Convergent report.indd Designed by: PwC Brand and Communications, India