The Switching Challenges for Telecoms Operators
Switching phone companies has become almost routine in many markets. New phone releases and competitive tariff offers mean handset switches often trigger network changes on a rolling 12-24-month series.
Customer switching behaviour can be a real challenge for communication service providers (CSPs). It not only means a potential disruption to revenue due to lost customers, but can provide significant pressure in terms of application volume and risk from new customers.
Neural Technologies’ Business Assurance product suite offers a wide range of solutions to tackle these challenges, powering up application risk, providing flexible charging services, and offering a wide range of other revenue protection solutions.
Understanding what the landscape looks like offers a powerful insight into why such advanced solutions are necessary.
The global telecoms landscape
There were almost a billion fixed telephone subscriptions by the end of 2019 according to the International Telecommunications Unions (ITU). That figure has fallen significantly in recent years as the shift towards mobile subscriptions continues, falling over 300 million in the decade since 2010.
At the same time, the number of mobile-cellular subscriptions has rocketed, demonstrating the remarkable transformation of the landscape which CSPs are wrestling with. The total number of mobile-cellular subscriptions more than doubled between 2008 and 2020, from just over 4 billion to more than 8 billion by the latest analysis. The number of active mobile-broadband subscriptions also exploded, growing almost five-fold in the decade from 2011-2020, reaching 5.8 billion in the latest projections.
More than 7.5 billion people are now covered by some sort of mobile-cellular network, creating remarkable opportunities for customers around the world. While there remains a clear difference between telecommunications access between rural and urban areas, the rapidly changing landscape still represents a remarkable ecosystem of consumer choice and competitive telecoms operators in the majority of markets around the world.
Affordability continues to improve, providing an even more powerful springboard for potential customer switching behavior. Both mobile-voice and mobile-data prices are falling steadily around the world according to the ITU. The reduction in price relative to income is particularly pronounced, “suggesting that, globally, telecommunication/ICT services are becoming more affordable.”
The switching landscape
While the trajectory of the landscape is clear, the question of switching remains complex. A 2016 study by UK regulator Ofgem of 120 customers actively looking to switch their mobile network found half (49%) decided to switch provider, while the 51% who chose not to switch were put off by the hassle of assessment for a new provider, or an improved tariff offer from their current provider.
Addressing the desires of switchers is key, with a further study by YouGov in the UK revealing that 7% of phone-owning adults switched providers in the UK in the year from December 2018 to December 2019—equal to 3.6 million customers. Value for money was a major influence in this decision process according to the research.
These studies demonstrate the dynamic nature of the switching landscape, and the importance of CSPs in offering responsive and seamless solutions. Neural Technologies’ Application Risk product for example is designed to provide rapid, automated application accept/decline/defer decisions that allow for smooth onboarding for customers with reduced risk for operators. The Ofgem study reveals the importance of a hassle-free services in promoting positive switching and onboarding new customers.
The influence behind customer switching behavior can vary significantly by market. Recent analysis of customer switching in the huge Indian mobile market reveals that service payout, brand trust, responsiveness, and value are all major drivers for shifting behavior. Responsive charging solutions like Neural Technologies’ Charging-as-a-Service product can be a powerful tool in such conditions, providing dynamic pricing structures that can flexibly adjust to changing market conditions, ensuring responsive and cost-effective service offerings for customers.
Cost is also a major influence in the substantial US wireless cell phone market, with 32% of Americans participating in a YouGov America survey citing it as their major reason for switching, followed by network quality (19%) and better service plans (17%). This once again reinforces the importance of an agile tariff structure that can quickly respond to meet the needs of customers.
It’s clear that customer retention is less about persistent loyalty, and more about benefits and value. Advanced solutions like those provided by Neural Technologies can help operators thrive in this competitive landscape, providing both responsive charging structures that boost customer retention, while providing seamless onboarding processes that reduce revenue leakage through the application stage.
Get in touch if you want to find out more about how we can help your company succeed in a high-volume switching landscape