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Before we get to 5G: The more pressing reality of increasing customer satisfaction

By April 13, 2016 No Comments

5G, just like its predecessor 4G, has the ability to change the telco world. And like the transition to 4G, 5G will perform at a much higher level than the previous generation. But just like 4G, it will take years to develop and more years for operators to actually see full benefits and be able to fully monetize the technology.

 Yet when I attended MWC in Barcelona in February ‘5G’ was one of the main buzzwords circulating among the attendees. In truth the benefits seem endless for 5G. Compared to the 4G of today it is expected to manage 1,000 times more data volume, handle up to 100 times more devices and provide five times lower latency. This will result in it being possible to download a full-length HD movie in seconds, result in a self-driven car applying its breaks in milliseconds instead of seconds, and the biggest benefit of all, 5G will provide the capabilities to realize the full promise of IoT. So it could be said that the buzz being generated by 5G is justified. However there are other areas were operators should be focusing their attention. Such as providing customers with the experience they desire.

A recent report published by Ovum stated that churn rates among the telecom industry have reached a staggering height and are continuing to climb. The report further cited that across all regions, telcos are seeing customers churn at rates as disparate as 1.5% to nearly 6% per quarter. As technology continues to develop at a rapid rate you would expect customer satisfaction levels to increase at a similar rate, but this is just not the case. This dissatisfaction can be seen by the average Net Promoter Score of 19.7 within the Telecoms industry. When you compare this to other sectors such as Healthcare (67) and Insurance (42.6) it is worryingly low.

Operators need to start engaging smarter with their customers. If not we will continue to see the churn rates rise and the Net Promoter Scores fall.  In a survey of 87 operators by Openet, operators indicated that they could reduce churn rates by 8.5% by providing real-time contextual offers. By offering real-time offers allows the operators to provide a more customized, loyalty building experience with relevant timely offers that customers can easily purchase and activate on their device.

One proven way for operators to reduce churn is by offering more services to their customers. By moving into dual, triple or quad play situations the operator’s services are becoming stickier. One European mobile operator churn rates was at 21.7% for customers on a single service compared to 2.5% for those customers receiving quad play offerings from the operator, highlighting the case for multi-play.

As mentioned above 5G will change the telco world, but with a launch date of 2020 at the earliest and churn rates rising at an ominous rate perhaps operators should concentrate on the basics first, increasing the QoE for its customers.