Telcos told to differentiate on service, not on speed

Fibre to the home penetration in South Korea is 58 percent, but in Singapore it's just eight percent, says Frost and Sullivan analyst

In Singapore 83 percent of buildings have fibre to the home, but only eight percent of customers have adopted it – why?

According to Frost and Sullivan vice president of ICT research Andrew Milroy the problem lies with they way the services are sold. He told an Amdocs Insights Forum in Sydney earlier this month that: “My view is that the marketing message isn’t right.”

Rather than focus on speeds, Retail Service Providers of next generation networks should differentiate on applications.

He says one of the reasons that South Korea’s FTTH penetration rate is high (58 percent), is because gaming is a popular activity for all ages. In addition, its tele-medicine market size is twice the size of Australia’s. In Singapore, where there is a focus on education, he says a successful strategy for one RSP has been to deliver applications around immersive learning.

Amdocs director of market insights Michal Harris says 2012 is the start of the Intelligence Age (following on from the connectivity age and the internet age).

Customers face a “blizzard of choice” and want rich offers tailored to their lifestyles.

Amdocs’ core business is selling Business Support Systems and Operating Support Systems to telcos worldwide. An Israeli company – it grew out of the equivalent of that country’s Yellow Pages and is listed on the New York stock exchange - Amdocs has 19,000 employees, operates in more than 60 countries and collects $3 billion in revenue a year.

Echoing Milroy’s view about the marketing of fast broadband services Harris showed two television commercials from AT&T in the US promoting its 4G service.

In January 2011 the advertisement features a mobile customer receiving a joke email faster than anyone else in a car, with the marketing message being that a 4G network has the fastest speeds.

The second commercial, which was launched last month, shows a couple on their front lawn answering questions from neighbours as they watch a sports game, video conference with their son and order a present online using their smartphones. The marketing message now is about the 4G experience.

Amdocs acquired Changing-Worlds, a provider of personalisation solutions for online providers, for $60 million in 2008. The business, has been renamed the Amdocs Digital Services Innovation Centre but remains based in Dublin and has close ties to the city’s University College Dublin, from which it sprung.

Senior personalisation scientist Evelyn Balfe told the conference that up to 30 percent of sales on Amazon, and 60 percent of movies downloaded on Netflix, come from recommendations.

“They have this great advantage ..they know people’s buying habits and by putting in that personalisation they can increase their revenue.”

She pointed out that telcos already have customer information in their CRM, but they can build a profile of behavioural information by creating apps through which to track customer preferences.

Balfe showed an application created for O2, the UK mobile provider, called ‘Priority Moments’. Partnering with local merchants, the telco has compiled free or discount offers which it delivers exclusively to its customers via their mobile device.

“This is a unique twist because the subscriber receives these offers for free. They don’t pay anything up front and they see O2 giving them all these free offers.”

Balfe says customer acquisition and retention has significantly increased for O2 due to these offers.

Also, the telco is able to “leverage subscriber information because over time you’re going to learn what preferences they have, what offers they are interested in, as well as looking at their current location.”

* Putt attended the Amdocs Insight Forum in Sydney as a guest of Amdocs.

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