In a consumer market dominated by digital players such as Uber, Netflix and Spotify users have come to demand intuitive systems, service flexibility and granular control over their experiences.
This level of service can be challenging to match. However, by fully embracing modern digital infrastructure, operators are able to facilitate smooth and secure end-to-end customer journeys, create new digital brands within days and grasp new opportunities.
The end result of a move to digital is the removal of many of the major pain-points cited by customers including inflexibility in service management and unwieldy signing-up procedures.
This article assesses the current market status and rich opportunity facing CSPs and includes how the Thales Trusted Digital Telco provides the tools to excel by launching a digital brand in just four months – without impacting existing services.
Content Summary
Digital disruption
Transforming instore engagement
Differentiation by design
Creating a digital telco proposition
Creating harmonious customer paths
Flexing your flexibility
Breaking down the legacy barriers
Agile digital Communications Service Providers (CSPs) are able to take full advantage of the revolutionary qualities of eSIM, enabling instant sign up for connectivity, remotely. They can also make the most of the qualities of 5G with its low latency, strong availability and high bandwidth.
Although some CSPs may perceive issues with a fully digital service, those who remain tied to existing systems and are inflexible to change risk missing new opportunities. They also face threats from rivals who are able to offer this modern user experience.
Here, Thales and Mobile World Live assess the current market status and rich opportunity facing CSPs. This includes explaining how the Thales Trusted Digital Telco provides the tools to excel by launching a digital brand in just four months – without impacting existing services.
Digital disruption
Networks paid for and built by the telecommunications industry have provided the means for much of the transformative digital innovation seen across many segments today.
Everything from taxi booking services to streaming have been impacted by new, agile players. However, now it is the mobile segment itself which is in the process of being disrupted.
In a number of markets digital sub-brands have been launched by operators which have been shaped to meet the expectations of today’s digital-native consumer. Often these are targeted to specific age-groups or other segments of the population.
Specific examples are highlighted later, but like other digital brands such as Uber, they offer seamless end-to-end digital journeys and online or app-based customer service channels.
One key area where traditional operators and more digitally focused ones differ is in the use of their physical retail footprint (if they have one) and its changing role in subscriber recruitment.
Transforming instore engagement
While 20 years ago having a large high-street presence provided the sole location for handset support and retail space to view and try out the latest mobile devices, many smartphone users are now experienced with common features and do not require the same level of support.
A GSMA Intelligence study of operator expectations for future store numbers, conducted in 2021 and published in its The future of telco retail: towards an omnichannel world report, highlighted a growing trend towards cutting sites.
Of those surveyed, 57% reported they had been reducing owned physical points of sale (POS) in the years 2011-21, with only 14% increasing them. Every respondent expected to reduce their owned POS in the 2021-2031 period.
In the same report, the analyst company highlighted a growing consumer trend of buying smartphones from operators online. It noted in some regions 40% of operator smartphone sales were through internet channels with the remainder through its own or partner outlets.
Though this figure had been inflated by the coronavirus pandemic, it is unlikely that the proportion will return to 2019 levels given the ease offered by digital sales.
There are, of course, groups which still value physical touchpoints. The key in a digital world is to offer choice through a well-tuned omnichannel experience.
GSMA Intelligence’s report highlighted the importance of incorporating seamless interactions across digital and physical channels such as click and collect.
It also noted where owned physical store numbers had been slimmed down by operators, many outlets remaining had provided more than just mobile retail. These can comprise interactive experiences or promotion of other CSP services like fixed broadband, smart home, small business services, insurance and banking.
In terms of customer behaviour, the analyst company highlighted a trend towards contracts not including a smartphone and longer device replacement cycles. It also pointed to affordability as a critical concern for consumers especially with uncertainty brought by the pandemic.
Since publication of the GSMA Intelligence analysis, pressure on consumer spending has been further hit by inflation in many markets and other socio-economic issues. This could make digital-only brands – with their lower overheads and cheaper price-points – even more appealing.
Differentiation by design
While some CSPs use their retail footprint as part of an omnichannel experience, others have created digital-first sub-brands where signup is undertaken online. This allows them to address segmented markets such as the low-cost or youth sector and meet market demand for digital without impacting their existing offering.
One of the key advantages of launching a digital brand is the flexibility to shape it to specific types of users and potentially promote it in a different style to appeal to that audience.
There are several forward-thinking operators already executing on this plan.
For example in Italy, both Vodafone and CK Hutchison-owned Wind Tre launched digital-led discount brands called Ho! and Very Mobile respectively. In the similarly competitive UK market, the same two parent companies offer youth centred low cost propositions Voxi and Smarty.
In the US, Verizon’s Visible offers a flexible yet personalisable SIM-only proposition, which includes compatibility with eSIM.
A central part of this service is the flexible Party Plan, which offers discounts based on how many people are in your group at any one month.
It works in a similar way to a more common friends and family tariff but each member settles their own bills and there are no pooled minutes.
A study by McKinsey published in 2021 found operators launching their own so-called “digital attacker” brands were able to make rapid gains and profitability within a year of launch.
On average, its analysts found, a typical digital attacker brand contributed close to 25 per cent of overall gross adds to the parent operator, with these new users recruited at around half the cost of parent company subscribers. It also showed 70 per cent of these additions were not cannibalised from other parts of the business.
Case study: Bouygues Telecom
Bouygues Telecom’s completely digital and responsible Source product provides a real alternative in the French market with a flat cost for consumers and the flexibility to donate funds from unused data to causes of the user’s choice.
The service relies on the combination of Thales’ trusted digital identity technology and a digital BSS platform from triPica.
The two allow Bouygues to verify new customers against official identification documents and provide customers with a completely digital experience post sign-up.
Its application provides a flexible experience to facilitate account management and also forms the basis of the service’s sustainability-focused unique selling points.
Creating a digital telco proposition
A digital telco proposition for CSPs means fully embracing a mobilefirst approach. This must include the ability to seamlessly onboard new customers remotely and deliver a fully digital, secure user experience through a mobile app.
Key features to enabling the complete digital telco proposition are eKYC (online ID verification) and eSIM.
The digital customer journey starts with a secure sign-up process comprising as few steps as possible to complete ID verification.
Technology is now available to allow CSPs to fully comply with customer identity requirements and legally binding KYC regulations online without compromising security or causing a rise in fraudulent sign-ups.
During the onboarding process, ID documents such as passports can be scanned and verified. A captured selfie is then compared and matched against the user’s photo of the ID document. To further strengthen protections against fraud, liveness detection is also applied.
This process offers consumers the freedom to confirm their identity remotely via a mobile device and meet local regulations. It represents the foundations of any 100% digital experience. It also allows users to be onboarded anywhere and at any time.
Another significant enabler is the dramatic growth of eSIM capable devices. This technology enables instant activation of mobile subscriptions and eliminates the need for consumers to go in-branch to activate their plan.
Finally, a digital telco proposition needs to provide all the tools for users to flexibly change their own services, add new products and access any assistance they may require. This must be available 24- hours a day through their mobile.
This high level of care and convenience significantly contributes to brand loyalty and subscriber contentment. A report by Capgemini found digital CSP initiatives yielded high reviews for operator apps and NPS scores of more than 60, as well as low churn rates.
From CSP service perspective tools are now available to create digital offerings from scratch in a very fast timeframe. Those already well progressed on their transformation journey can launch completely new tariffs and deals quickly to take advantage of trends and demand similar to those illustrated earlier in the paper.
The level of flexibility and simple customer service offered by cutting edge digital telcos can solve many of the major pain-points experienced by users and aid efforts to build a loyal base of brand champions.
eSIM
A major enabler of a completely digital customer journey is the advent and increased adoption of eSIM technology.
A GSMA Intelligence report published in 2021 forecasts that by the end of 2025 there will be 2.4 billion eSIM smartphone connections globally – a total which comprises around a third of connections expected at the time.
The industry association noted in 2021, 230 operators across the globe offered an eSIM service with 88% of operators surveyed by the organisation expected to offer it by 2023.
A rise in connections and increases in the number of devices on the market able to use the technology provides an excellent complement to providing a cutting-edge customer journey to subscribers and hastens the remote sign-up process
Creating harmonious customer paths
CSPs creating digital experiences should strive to offer the same level of ease and convenience as big name app players in other sectors such as Uber and Netflix.
Thales recently conducted a survey of 420 consumers between 18 and 35 years old across the US, UK, France and Canada to uncover common customer frustrations when engaging with mobile service providers’ digital offerings.
Key findings include difficulty choosing a suitable plan, struggles with authentication and sourcing correct documentation, cumbersome payment processes, slow delivery of service, a lack of customer support without speaking to someone, and no ability to pause or cancel services.
Flexibility was an area where many CSPs lacked options, yet this is something expected by digital native consumers. This was especially evident in the thorny issue of contract cancellation.
However, the ability to easily pause or stop SIM-only contracts should be seen as an advantage over competitors rather than a threat while easing a major customer pain-point.
Providers commanding a high level of customer satisfaction should really hold no fear about offering easy cancellation or the facility to pause services, given the associated loyalty which comes with supplying flexible and convenient services
Flexing your flexibility
Modern digital architecture gives CSPs the ability to offer customers the flexibility and ease of service many users desire. It also allows the creation of specific propositions for emerging applications.
The pandemic exposed some operators’ inflexibility with a sudden rush away from concentrated daytime traffic in city and town centres in favour of home working. Almost overnight they had to facilitate video calls, remote education and other high-bandwidth activity.
Although this was an extreme circumstance, the fact remains CSPs with modern digital infrastructure are able to pivot more quickly to take advantage of changes in traffic which can be for any number of reasons.
Bandwidth-intensive services such as ultra-HD video, gaming and high-definition video calls create new challenges and can add extra pressure on the network. However, if the operator can deliver on them, this 5G-fuelled boom offers an opportunity to target specific groups with tariff and service bundles supporting unlimited 8k video, VR services or elite-level gaming.
Here, customers could also be given the ability to add services to their basic tariffs based on interests and requirements. This is an especially compelling proposition to CSPs with content provider partnerships or inhouse media and gaming services.
With rival operators and third parties also identifying these exciting new opportunities built on 5G, it is important to stay ahead of the pack. To grasp these, CSPs must embark on a programme of digital transformation in at least part of their business.
Breaking down the legacy barriers
Being at the forefront of delivering new experiences will allow CSPs to derive the benefit of being an early digital adopter. They will be seen as an innovator providing the agile services today’s market demands.
However, many face internal barriers which need to be overcome, often involving legacy infrastructure.
Generally, existing systems in place at operators need to undergo lengthy, complex and costly adaptations to offer fully digital services. This includes the installation of additional layers to add flexibility which wasn’t traditionally required.
When it comes to legacy IT infrastructure, some are concerned adding new systems into the mix will have unwanted impacts in other areas of the organisation. With this in mind, it is important to use digital Business Support Systems (BSSs) which will not create any problems elsewhere.
In terms of staffing, digital-focused teams should be put into place to push forward the agenda and ensure applications and processes are meeting the required levels of service.
Security can be a key concern when moving systems to a cloud environment. However, it needs not be as digital systems from trusted suppliers have end-to-end security and authentication systems baked-in.
Of course, specific regulatory obligations exist around data storage, subscriber registration and authentication in several markets.
Advanced digital platforms now are compatible with common KYC requirements. Those with specific needs are advised to speak to expert solutions providers to see how local regulations can be incorporated into bespoke designs.
