Livewire: The Communications, Media and Entertainment Blog

Operators across the world are embracing the App store to unlock the data potential and create new revenue stream.

To understand in details the operators' preferences and approach to the App stores Infosys sponsored research from IDC.

Research finding outlines the App store strategy of the 31 operators across North America, Europe and Asia to get insights in to App store strategy.

Outcome of the research will be presented in the webinar hosted by Infosys and presented by Mark Winther, Group VP & Consulting Partner, Global Telecommunications at IDC.

Join the webinar to get more information and insights.

Posted by Pramod S.N. at 5:32 AM | Permalink | Comments (1) | TrackBacks (0)

Operator dreaded three letter word "MNP" (mobile number portability) is here in India! Indian mobile space is crowded with multiple telecom players.  There are around 650 million subscribers, of which 32% are from Urban and remaining 68% from rural sector. Further, around 95% of subscribers are prepaid customers.

The heavy rural and prepaid dependencies have set forth price war amongst the operators and have resulted in erosion of ARPU. Along with price, churn also has become serious concern for all operators. It is accepted in industry that only 50% of new subscriber addition is actually new subscribers. Rest all are either churning from one network to another or adding to multiple SIM phenomena. Added to this current plight comes the "Number Portability". Ability of people to retain the old number while jumping to latch on to new promotional offers by operators is going to put further pressure on the Top and bottom line of the operators' revenue. How can the operators mitigate this looming risk?

"Customer experience" is turning out to be Holy Grail through which more and more operators are hoping to revive their future! 

"Customer experience" is easier said than done. Operators are willing to experiment to arrive at ideal solution. Value added service in general and "App stores" in particular is probably the most trodden route.

Value added services like ringtone, wallpaper etc which was introduced few years back have been accepted well by customers and this constitute around 8-10% of revenue the operators generate in India. However, operators are beginning to see the limitation which these services have in delivering customer experience.

"Application stores" takes the customer experience to all new heights. It is succeeding at rapid pace in becoming part of the consumers' lifestyle.  It is not only enhancing the entertainment quotient but also enhancing the factor like convenience, connectivity and Commerce- The essential ingredients for long term stickiness.

Operators who got in to App store business to serve the basic need of "Increasing customer stickiness" and "creation of customer experience" have started to realize the third dimension which App store bring about- The new stream of revenue. This goes further to show that "App store" have been successful in standing on its own as well! This presents added motive for operators to explore this option.

I believe that an App store with right mix of applications, supporting ecosystem of developers, Content providers and channel partners will be right tool to improve stickiness thereby reduce the churn resulting from MNP.

Recent research in partnership with IDC revealed interesting operators expectation from App store and how they plan to go about establishing the App store.  Research also shows inclination of operators for various categories of applications. Webinar series by IDC and Infosys has been planned to outline the findings and outline thoughts on "Apps monetization". If interested to know more do join the webinar.

Posted by Pramod S.N. at 7:46 AM | Permalink | Comments (1) | TrackBacks (0)

Telcos undertake billing transformations for various reasons like scalability, fitment, future-focus and time-to-market, as mentioned by multiple bloggers in this site. They have to understand that a Billing System is the heart of their BSS stack. Billing also demands online integration with multiple components of BSS stack. Having noted these, we can conclude with the below 3 areas as the outstanding reasons for the failure of a large billing transformation program:

1. In many of the programs I have worked on, the integration with CRM system was the bottleneck. CRM will handle the transactions very well internally but when it comes to pushing these transactions forward to Billing, there would be numerous issues to be addressed and carefully solved. Any small issue in the design stage could easily get magnified by the time testing kick starts.
2. Of late, operators have become very creative and to woo their end-customers, they are going any far to come up with products that are nearly impossible to implement in today's market-leading billing packages. I would call these as futuristic requirements, which will be the next reason we could look at. There are these innovative requirements which combine a prepaid and postpaid offering into one and give a very interesting hybrid offer to the customer. Before the operators jump on implementing such products, it is important that the billing package is well analyzed for its fitment, create POCs, take a GO/NO-GO decision and proceed accordingly.
3. Billing system cannot work independently without the customer data. Customer Data Migration from legacy to the new billing system has to be an astounding success for making the entire billing transformation work. Data Migration is not given the right importance most of the times and even not planned well in many programs. I have witnessed many programs where the core billing configuration and customization for all functional requirements is complete but data is not loaded due to various issues that include quality of input data, ETL discrepancies and finally incorrect volumetric analysis.

It is important that Telcos give due consideration for all the major issues when they embark on billing transformations and control the program from being termed as a failure. What in your experience is the prime culprit for making a billing transformation program fail?

Read my next blog for some best practices on how to avoid such failures and take home the 10 commandments for successful Billing Transformations.

Posted by Prasanth Kumar at 2:12 PM | Permalink | Comments (0) | TrackBacks (0)

The situation:

In context with prepaid mobile data services--customers who pay upfront and are getting used to mobile app store concept. This has enabled a huge group of low-income consumers to experience apps at affordable prices. As the mobile app content industry matures, it must find new ways to sustain revenue growth. Encouraging longer, more profitable relationships through customer life-cycle management is a nascent thought for telcos providing voice and data services

The complication:

There are two key challenges:

1. Prepaid customers are often disloyal, adding to the low ARPU challenge. With MNP ruling in India, many subscribers would throw away SIM cards when their value is exhausted, buy a new one from any convenient vendor who makes the best offer. Similarly, there might be an increase in the percent of prepaid customers who own dual SIM cards and switch between them to take advantage of lower rates for calling within an operators' network and other discounts.

2. B2C app stores would soon become a commodity service in another 5-7 years moving from a fragmented market of many to a consolidated market of a few established app providers. As developers create and upload more applications to various app stores, the average rate of daily downloads per new application starts to tail off coupled with competitive pricing models. To add to this worry, MNP factor would allow subscribers to shift to a competitive voice service provider while they would wish to carry forward similar VAS/app store experience with the new operator.

The solution:

With the growing no. of smart phones having bigger screens, better touch pads, and more processing power, calculating the customer's likely lifetime value, the probability that a customer will switch providers and ways to retain the most valuable customer groups would be near impossible

Going forward, similar to 'Interconnect usage charges'(IUC) concept, app store may have re-incarnated as both exclusive premium app store for own subscribers and as shared basic app store open to competition. This would allow subscribers to carry on with the same mobile number and same set of downloaded apps while switching operator services. As far as customer lifetime value is concerned, the market may open up for better quality, shared and non-redundant app experience where revenues for an operator can come from both exclusive subscription and royalty usage charges paid by subscribers of the competitive operator.

Posted by Anirban Parua at 1:03 PM | Permalink | Comments (0) | TrackBacks (0)

Wall street Journal has published an article on independent App store losing the battle for App store. It sites example of GetJar, Handmark and PocketGear. It also argues that handset and operators are in better position to leverage the App stores as they have control on devices and data.

Likes of GetJar, Handango, and PocketGear were the front runner in the app store business. These players existed well before Apple entered the App business. But ever since Apple debuted in 2008 the game of App business has been completely revolutionized. What did Apple do so differently?

What apple had was, the "killer" device the "iPhone", further it enhanced the user experience of the device with great apps which utilized the feature of the iPhone. Mobile Apps which might have started as surround activity for Apple to drive the iPhone sales evolved in to separate stream of revenue and differentiator. Apple continued to nourish the app store with innovative revenue sharing models (which has almost become standard), payment gateway etc. Further, due to its bargaining power (curtsey iPhone) entered in to exclusive agreement with leading carriers which in-turn brought tech savvy  (early adopters)crowd to its app stores. All these factors drove the revenue of its app store and set stage for other to follow.

With more and more operators jumping in (Airtel, Vodafone, Reliance etc), app store no more resulted in "Differentiation" but became mere "Hygiene factor".  Maturity of app store also brought in demand for "Quality of Apps", "Relevance and Personalization" and "Localization". These demands can be met only through intricate customer knowledge. Operators with huge customer information are well positioned to offer what customer demand. Independent app stores devoid of this information will have difficulty in offering exactly what customer wants.

Infosys Sponsored research with IDC to understand what operators in different market (emerging, developed) and different stage of growth, value about app store and how do they wish to go about creating an App store. Outcome of research showcases interesting facets of operators needs. Download the report to understand the customer preferences.

Posted by Pramod S.N. at 8:59 AM | Permalink | Comments (0) | TrackBacks (0)

App stores are busy advertising number of App they have in their store. Is "number of Apps" an important criterion for success of an Application store?

I feel in short term answer would definitely be yes. However in the longer run what matters is Quality. "Number of Apps" being a tangible measure will definitely do their bit to attract users to an app store initially. But once users visit the app store they will be looking for app which satisfies their need.

App stores are busy advertising number of App they have in their store. Is "number of Apps" an important criterion for success of an Application store?

I feel in short term answer would definitely be yes. However in the longer run what matters is Quality. "Number of Apps" being a tangible measure will definitely do their bit to attract users to an app store initially. But once users visit the app store they will be looking for app which satisfies their need. Recent study from Nielsen states average number of apps that a feature phone user has on his or her device is 10, while the average number of apps a smartphone user has is 22. Going by this survey what App store should ideally contain is 22 great apps instead of loads and loads of apps!

Law of diminishing returns will sooner or later come in to play with increase in number of Apps in an app store. With large number of apps, users find it difficult to discover relevant app provided the search technology, recommendation engine and efficient App classification does not keep pace with the App growth. With devoid of these developments large number of apps may actually result in "Crowding out" effect!

My analysis of app store shows that some of the App stores having less "Number of Apps" have managed download greater than other app stores with larger number of Apps.

Research findings from recent Infosys sponsored research by IDC also validates the operators thought on importance of "Quality" over the "Quantity" of Apps. 

Download the whitepaper to know more about the research finding.

Posted by Pramod S.N. at 8:44 AM | Permalink | Comments (2) | TrackBacks (0)

Mobile communications is one of the most dynamic sectors of the global economy.  Recent research from IDC outlines that worldwide mobile subscribers will reach 5.6 billion by 2013. It is well known that voice still constitutes major source of revenue for operators. All the while operator provided pipes for the data transit without actively being part of demand generation. However, with advent of smartphones operators are exploring ways to entice their customers to use the pipes for variety of data driven activities. Application stores or App stores is fast becoming the tool which is helping operators monetize the data that runs through their pipe. What started as the mere revenue generation model has all potential to transition in to creating customer experience.

Infosys recently sponsored IDC research to understand the Mobil e Operators ' Application Store Strategy. As part of research operators across North America (NA), Europe (Eastern & Western) and Asia Pacific were reached out to gather their inputs on the mobile application store. Outcome of the research indicates that "Increasing ARPU", "Generating new revenue stream" and "Increasing the rate of acquisition" as major objectives for operators launching App store globally. However for developed markets (predominantly North America and Western Europe) "Improving customer stickiness" featured in top three priority replacing "Rate of customer acquisition".

This seems quite logically as in developed market (NA and Western Europe) the mobile penetration has already reached 100% or in some cases exceeds the 100% mark. In this scenario retaining the existing customer by offering services which aides stickiness becomes priority. For Developing market like India the mobile penetration is expected to touch 56% mark by end of 2010 and hence, major objective of operators is to acquire new customers to maximize their revenue generating capabilities!

Again analyzing the data by segmenting based on subscriber base reveals smaller operators (with less than 20 million subscribers) betting more on customer experience vis-à-vis large operators (with greater than 20 million subscribers) who are betting more on acquiring more number of subscribers through App stores. This indicates interesting fact of smaller operators leaning more towards becoming value players as against larger players who are aiming to play "Volume game".

In subsequent blog I will dwell more into these other operators' preferences, watch out for this space!

Posted by Pramod S.N. at 6:19 AM | Permalink | Comments (0) | TrackBacks (0)