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Why the UK operators are really screwed: 92% of customers don’t plan on increasing their spend over the next 2-3 years

I received a fascinating piece of research in from IBM today. It was sent to me in conjunction with the news that IBM has signed an £18m business intelligence contract with UK 3G-data operator, Three. The deal will see Three use IBM’s technology to get a better understanding of what customers are doing — and therefore predict rather than forecast (i.e. “guess, badly”) what offerings are likely to appeal to particular segments.

I think this is a good move by Three. And it’s a smart move for IBM who’ve long been experts in this regard.

The wider issue, though, is shocking.

If you take the above research statement, based on IBM’s exhaustive 2011 Global Telecoms Survey, that’s ridiculously bad news for operators.

It’s obvious, though.

Of course!

Let me ask you this question: Assume you’re paying £35/month for your mobile service plan at the moment. Would you like to pay £40?

No.

Ok, next question: Still at the £35/month rate, would you like me, as your operator, to mess around with our price plan configurations in 2014 so that even though your basic rate stays the same, we screw you on out of bundle calls, so that you end up paying £45 a month on average?

No.

Ok, final question: Would you like me to simply decide to unilaterally raise the cost of calls citing some slight-of-hand ‘inflation’ reason (or equivalent smoke’n’mirrors) so that you end up paying £50 a month for the same basic service?

No.

Whatever way you analyse it, there’s no way I — or the rest of the country — wants to pay MORE money for the same OLD ROPE that you’re flogging me, Mr Operator.

This IBM research statement is exactly the same as the internal polling that most operators will show you only when they’re having a really, really bad day and the CEO is screaming about service innovation, yet again.

Their polling says the same: No consumers are prepared to pay more. Customers HATE paying more.

Correct.

The trouble is, it’s also wrong.

Well, it’s the interpretation that requires some guidance.

I’ll use myself as an example.

I’ve no intent whatsoever to pay more for the same services. If anything, I’d like to pay less.

And at the EXACT same time, I’d like to pay a lot more, for additional value.

THIS is where the internal operator polling screws up. Because they either routinely get it wrong, ask the wrong questions or don’t have the ability to incite enough delight in their customers (during survey) to show them service configurations that would have them throwing money at their operators.

So what would I pay more for?

Prioritised data services. I want a better service than the 12 year old sitting next to me in a restaurant. They’re messing around trying to download the latest delight from Rovio. I’m trying to download a powerpoint because I’ve got a conference call in five minutes. My stuff is more important. I’m not talking about net neutrality. I’m talking about business service levels vs consumer service levels. So I’d pay a lot more for that.

I’d pay for better, enhanced insurance that doesn’t require me to arse about visiting stores, handing over cracked phones, waiting for them to determine the screen is actually cracked (duh) and then waiting to be told when to re-visit for a replacement. No. I’d pay a lot more for that facility.

I’d like to buy my computing resources from my operator. I quite enjoy being able to walk out of a phone store with a ‘free’ iPhone — because Vodafone’s CFO is better at accounting than I am (and they’ve got a lot more fiscal resources than I do, as I’ve got curtains and sofas to pay for right now). So I’d like to do that with my MacBook Air. Or any other business technology.

While I’m at it, I wouldn’t mind rolling my email and server requirements into my operator spend every month.

I’d like to pay for enhanced services — one number, multiple devices, for example.

I’d like to pay for 2-4 week device loan programmes so I get sent new devices to try out on rotation.

I’d like to pay for family location monitoring, say £5 per month to locate my wife, my children, my car, myself etc.

I’d like real-time “emergency” help so that wherever I am, my operator will help me out of whatever fix I’m in.

I’d like guaranteed 2-hour handset and SIM replacement 24-hours a day, anywhere in mainland UK.

I’d pay more for unlimited, unmetered billing. So I don’t have to think about it.

I’d pay more for a proper roaming service plan.

I’d pay more for a concierge customer service telephone/online call centre, so that when I phone up, the person on the other end says “Hello Ewan” within 2-rings and doesn’t arse around with inane security questions — and who sorts out my every request right-away.

Blah blah blah.

Now I’m an edge case. But there’s a lot that consumers will pay for. The issue is that operators are spectacularly rubbish at doing anything about it.

Gone are the days that you can charge for landline calls. Or anything like this. It’s being commoditised down to next to nothing. It’s far too late already but the operators still have an opportunity to innovate before the wider market moves on.

By Ewan

Ewan is Founder and Editor of Mobile Industry Review. He writes about a wide variety of industry issues and is usually active on Twitter most days. You can read more about him or reach him with these details.

6 replies on “Why the UK operators are really screwed: 92% of customers don’t plan on increasing their spend over the next 2-3 years”

1/  Mobile wallet, payday loans and 12mo lease up to a certain limit. 
2/ Priority connection to the nearest tower, so that people on cheaper plans get pushed to further towers and pay with their battery life. 

Totally agree. I would be happy to pay for better data service, so other users watching youtube or something else of little use cannot take the bandwidth I am using to make money or conduct business.

I like the device on rotation idea as well, excellent. They have a lot of work with but seem like many industries to have little interesting in changing business as usual.

Roaming is a big one as well, this one I would be really happy to pay to have good data at the right cost anywhere I go. This cannot be that hard to work out, and device replacement along with it. Would be happy to pay £20 more for this type of service or offer.

You could even offer a iphone or Android plan and when a new high end Android or iphone device is released your choice you can upgrade at no extra cost. Send back or drop off the old one and move forward to the new one, with all your data being backed to a secure server you spend extra for and the swap is easy and your data securely wiped before handing over the old handset.

 I have a Samsung Galaxy S now, new HTC X whatever is out bang I am using it. New one with better AMOLED comes out, move to it.

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