Amdocs, a provider of customer experience solutions, has unveiled the results of a study which found that 67% of mobile virtual network operators (MVNOs) in Europe plan to differentiate by focusing on customer service.
In all, 63% expect to differentiate by adding value with new services, while only 46% plan to continue to focus on providing cheaper prices as a strategy for growth.
“The European MVNO market has matured to a point where discounting as a strategy is no longer sufficient to guarantee success,” said Teresa Cottam, chief strategist and founder at Telesperience, who led the research on behalf of Amdocs. “Having the right systems in place is crucial for Communications Service Providers (CSPs) looking to differentiate with improved customer experience offerings. A system that enables the quick and reliable rollout of new products which are better targeted to allow micro segmentation, as well as anticipate and respond to market demands through advanced billing, charging and control features, will be essential. MVNOs with systems that offer only simple capabilities will be at risk of losing out as they fail to meet customer expectations.”
Additional key findings of the study, which covered 99 MVNOs, 75 of these in Europe:
- MVNOs are bullish about their future: Estimate their business to grow at an average rate of 45% over the next two years, with 25% predicting a growth rate of more than 100% over this period.
- Top two growth drivers expected to be new customers and offerings: Most MVNOs (83%) believe that their business growth will result from organic growth of their customer base. Given that many of these companies operate in saturated markets, this means that they expect to grow organically by taking subscribers from their rivals. Adding new offers or lines of business are seen as the second most impactful growth engine by 545 of MVNOs. Interestingly, 38% plan to launch new MVNO brands or expand internationally, and 33 plan to add entirely new lines of business. A mere 8% think they can grow by offering better pricing.
- MVNOs without the right systems in place will be at a competitive disadvantage: According to survey, 71% of MVNOs have built their own billing and charging systems. Although these systems should be highly tailored to their needs, 41% consider them a barrier to growth. Furthermore, 50% said they are unsatisfied with the speed their systems allow them to rollout new offers, 38% said they cannot support micro-segmentation to better target the needs of customers and 30% were not satisfied with systems performance. Only 29% said their systems can support more advanced billing, charging and control features.
“In the super-competitive MVNO market, it is critical that business systems are efficient at lowering operational and capital costs to sustain the low pricing customers and regulators expect,” said Chris Williams, head of global marketing at Amdocs. “To capture the world of digital immediacy, MVNOs need to be fast and they need to be first. This requires operating digital dimensions to engage customers, creating a more diversified business to capture new revenue streams, and achieving service agility to accelerate the fast rollout of new technologies.
Solutions which offer pre-integrated systems stacks supporting more than one entity on a single platform will ensure the high level of operational agility and efficiency MVNOs require, and can also support Service provider’s ambitions to drive new revenue streams.”
The author of this blog is Teresa Cottam, chief strategist and founder at Telesperience.
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