Mobile Roaming Regulation 2014 Customer Experience

When speaking to the organisers I thought it would be a good idea to present at the Mobile Roaming Conference 2013 on the impact of the EC Roaming regulations 2014 from, you know, the customers' perspective. It was a good idea and the presentation was received very well... however writing it was a lot more painful than the usual presentation!

It was only right to add the cover after I had made it look so nice...

So the premise of the presentation was to look at the user experience (UX) of customers while roaming in the European Union and how this may change with the wider EC roaming regulations of 2014, which will of course affect MVNOs. Virtuser is pretty well placed to speak about this, as we were there for the first round of regulations, requiring last minute WAP pages and SMS gateway solutions, and we have helped numerous MVNOs comply with regulation with advice of charge, etc.

Apple was not the first App Store, by far, nor the first to do apps, but the won with great UX

So what is the customer experience at present of not just the roaming regulations, but also just roaming... well its not a good one and its very, how shall we say, pre-iPhone, in fact pre WAP: when did you ever have a great text based customer experience?

The present Roaming Regulation experience is pretty dire and text only mostly

Most roaming experiences start with an overly edited text message, with no number to call customer service for free as we are supposed (come on, we know standard customer care calls abroad are not free, right?), the SMS service is most likely completely disconnected from any core systems or customer care tool and is the main reason why there are so many dormant roamers: when did a text based UX last convince you to buy something?

The roaming experience gets worse, what happens when you go over your limit? 

Then what happens when you go over the €50 limit? the €5 per day all inclusive plans are brilliant, but after 10 days what do I do... well you opt out and one operator was good to their word (above) another shall remain nameless and rubbed their hands together and delivered me a huge dose of bill shock. So I had 10 days of roaming regulation induced sanity, the rest of the time I was back in the dark ages.

And the prize for the best Roaming Regulations advice of charge message is.... 

Vodafone UK has, as far as I am concerned, the best roaming track record post the roaming regulations, however what went on in the office the day they decided this message was the way forward? and this is the reduced version as I culd only fit four screenshots in...

Its not just the regulated messages that are a poor customer experience

After upgrading my iPhone on Vodafone 3 or 4 times, once it decided I needed to change my romaining plan of the last 4 or 5 years... you know, just to shake things up a little: So I arrive and get a message saying I will be charged about 120 times my usual national rate for data as I was no longer using its roaming tariff - great, I am in a taxi, trying not to be taken the scenic route and make a meeting and I have to spend 30 minutes on the phone to my Operator (10 of which were on hold). I finally get it sorted and two hours later get a message, but when did the new tariff set in? was my call that I made a note to check on my bill that was free really free (I never got round to it, but suspect I know the answer).

Then there is the wonderful experience, particular to Voda UK, where on an iPhone, a person in your contacts list calls you and their number appears, you have them saved in your phone, as you do with all your numbers, with the +44 international code... yet you go to call them back, and because voda has delivered the call without the international code you get an error code and a text saying you need to put "00" in front of the number... worse is, I have spoken to a few people in Voda about this and they all go "oh, yes, that..." with a look of "who is going to take the next year of their life to fix that and probably not succeed or be thanked for it anyway" ...and I pay a premium for this type of service?

post 2014 will be different as it will introduce competition and "it will do" will no longer be good enough

So why will 2014 be any different when the second wave of EC roaming Legislation comes in? well, for a start, it will introduce competition. Operators do not typically like this, nobody in business really does, but we accept it as we know it is what get's you out of bed in the morning to drive progress. This progress is also important, as it will mean an app driven, internet based experience with all that that brings: real time knowledge, social interaction and real time reviews and ratings: it will be as close to a proper experience as we can get.and will bring roaming from pre app store to smartphone experience in one swoop... finally!

post 2014 with bring a) competition, but moreover b) an smartfone, interactive web and app based CX

It is this competition, as counterintuitive as it may seem, that will drive the 70% of dormant users to adopt roaming. Just as with national data and widespread mobile usage of all services (voice text and data) it was not just lower rates that drove wide spread adoption: it was competition: people did not message universally until whatsapp and imessage. Yes the operators lost a base a small % of their base who were uber texters, but they gained a complete base of data users who needed text as a fall back and the total volume of texts increased. The same with data, many people needed the comfort of their home wifi and hotspots to make the jump to a data tariff.

So who will win? the counterintuitive answer is everybody, as this will drive out the 70% dormant roamers

TBH many roamers will stay with the even lower price drop of their native operator, but if they go over their €50 limit, or their boss/client suddenly decided they need to rewrite a presentation with videos in it (been there) they have mobile options that do not mean finding a cafe with internet.

But there is still a lot to think about, like data configs when you break out and when you go back, fortunately Virtuser has a Mobile Roaming regulation OTA Data setting solution for this

I spoke to a lot of people about this, in my own mini focus group and took some great phrases you see in the word cloud from industry insiders, regulators and users: like:

• It will take a while for people to gain faith in roaming regulations, like a whole yearly cycle of travelling. 
• Value is important. you do not want to pay €5 or even €2 every day, but you will happily pay €10 just for data the day your boss needed that presentation yesterday
• legacy billing is no longer an excuse, in fact its the excuse we all got bored of and drove this regulation in the first place!
• Technology challenges need to be overcome, like even UX, how do you go from one app (your native host operator) to the LBO app and configs and back again. It's bound to break at first! 
• Competition is key, its no longer enough to ignore this, or your revenues will reflect this
• Roaming is still a huge revenue by EBITDA % but will need a small investment in UX to grow

But these can be overcome, and whether you an an MNO or MVNO I have helped both through this before... so get in touch if you want to discuss apps and OTA settings and SMS gateways!

Thankyou!

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MVNO product development - post pay vs. prepay part 1: launch

MVNO Product Development - Prepaid MVNO vs Postpaid MVNO

When launching an MVNO, simple and low risk is key "keep it green" :)

One thing that has been a bug bear of every MVNO process has been keeping things simple, which invariably means prepay only for launch. Yes, there is a reason why pretty much all the successful MVNOs that are still here launch pre-pay only; when you are new to a market (most MVNOs are new to mobile) it pays to keep your front and back end processes as simple as possible.

Which leads to the next bug bear which is trying to base your launch product on other players follow-up and mass-market products. Just because your competitors have moved to post-pay does not mean you need to launch post-pay and or even compete with their prices.... (this will be another post...)

Keeping things simple in MVNO is easy, right? 

So back to keeping things simple: Everybody buys into it, yes, but not everybody gets it, and even those that do are easily distracted: It's a bit like being a good citizen; some will never get it, and you should keep them as far away from anything important as possible; others need reminding often, and others only the threat of prison makes them adhere to the rule. The analogy is important here, as most people the fear of failure, like the fear of prison,  is the only way to keep them on the straight and narrow!

Evidence of this is when you get comments from people who you thought got it like: "that cannot have taken long, look how simple it is" or "why are we launching with just pre-pay again?" Simple takes time; anybody can take a collage of other products, jam them together and come up with a half decent proposition in a day, the problem is it will cost you a lot to market, a lot to service and will cost even more in lost sales and churn, and most likely it will fall into the 50% of new businesses that fail and cost the highest business cost of all: failure!

Simple takes time, a lot of thought and often counter-intuitive - but achieves success

So back to why keeping it simple is important? I will start with one of the best comments of the last MVNO conference in Rome by Adam Holt of Tuenti at the last MVNO conference, who said that if they did it over again they would not have done post-paid, as it lengthened the product cycle. I will deal with this in another post, let's just stick here to the precursor of this which is launch:

Basically, before  launch you will need to build a product set that fits with your business model, your strategy and your marketing plan and investment. The variables here are huge alone, but simple will in short be easier to manage, cheaper to market and quicker to implememt. I have seen months' delay from just one billing product complication in run up to launch causing a no-go.

Launch and post launch prepaid mvno benefits

The critical time however comes at launch and post-launch. Here you will be dealing with configuring of a new billing system, running reports hourly at first and trying to work out not just problems, there will be supposed problems that are not actualy problems but have you in a tizzy anyway and real problems as well: It's all so much easier when the product is simple. There will be over performing and underperforming tariffs that need revising up and down, there will be customers who fall short of the next bundle up who will need targetting, and guess what- its all very easy, and very profitable, if the product is simple.    I have seen a first consignment of overcomplicated bundles never make it to acual customers: The offer was well concieved and attractive, unfortunately so much so the SIMs sold very well - to fraudulent SIM box use that was not even in the country of origin within days: the losses were not just the fraud on the network, but the marketing that excited real customers who could not get a product...

Do I need to be a post pay mvno at all?

Then there is the recent developments: I have been using the above slide for over 10 years now, but since then we have seen products like the Oyster Card on the London underground, targeting some of the most affluent people on the planet with pre-pay only, and Starbucks as well with their closed user group that is pre-pay only, with average revenues way above average post-pay mobile bills. The important point is that they do not market the product as pre-pay, and do not allude to the fact, nor hold back on their marketing based on assumptions of post-pay being on the horizon.

Why do mvnos go post-paid at all then?

Most MVNOs may eventually benefit from postpay, the key word being eventually. The 80 / 20 rule, is key here - if you want to get all your customers, some my want a contract, and part of being simple is not making the pain of adoption any more difficult than it has to be, however there are other considerations at this point such as can you afford, or do you want to afford, the higher subscriber acquisition cost? Remember MVNOs live and die by acquiring customers cheaper and keeping them longer, post-pay may lend itself to the latter, but is very hard on the former, as well as being the MNOs bread and butter.

So, even if you cannot keep it simple... At least start it simple, and your chances of sucesses, as well as those of avoiding failure will be much higher, mostly because your marketing budget will have gone further and attracted better customers (you see where I am going here) let alone the fact that your boss / shareholders will not have been breathing down your neck while you are pulling 15 hour days on the red boxes on the slide above!

MVNO Conference 2013 Rome LTE MVNO opportunity

I though I would share my slide and thoughts on LTE and the MVNO, having written many of the requirements, negotiated a major full MVNO with LTE and now building the full LTE MVNO, here in the UK for yet another FTSE 100 company entering mobile.

The Opportiunities for LTE in MVNO and LTE wholesale are huge

I feel in a strong position to talk about the opportunity because I have negotiated a lot of MVNO agreements over the last 10 years across mostly Europe, which has seen the advent of 2G MVNO and 3G MVNO and its contractual, organisational and other issues. Also because at Virtuser we run a lot of value added services for MVNOs, like top-up over SMS and OTA data settings for MVNOs so we see what handsets are being used, what data propositions are being used and other first hand experience of not just walking the talk, but walking the walk, to use the consulting analogy (consultants are often accused of only being able to talk the talk, or at most talk the walk :))

In assessing the LTE MVNO opportunity, we need to look at the facts, not 3G+

Its important that we look at the facts when assessing the LTE opportunity and not make the 3G mistakes, not only on the commercial proposition side, but also from a network and business side. That is: its clear that 4G handsets are slower in uptake than 3G, and that so far this service, as such, commands a premium over 3G. We also know that data currently represents high double digits percentages of network running costs (87% in the case of a major MNO in the UK) but no where near these levels of revenues. We also know that while mobile data costs in the region of 5X the cost to provision, it does not command a yield price 5X that of fixed broadband data due to strong competition on the MNO retail market... Wholesale therefore is a significant opportunity for MNOs and MVNOs to charge the higher yields and returns to MNOs and MVNOs alike in this space. This will require the MNOs, and their notorious contracts to adapt and enable all new MVNOs with "4G ready" status.

Please can we not see MVNOs still launching with 3G SIM cards 7 years from now like with 3G

 I was still negotiating 2G SIM card deals for MVNOs in 2007, 7 years after 3G! All new MVNOs should be 4G ready MVNO or LTE ready MVNOs, however you wish to call this. This means 4G MVNO SIMs, but also 4G LTE MVNO on the MNO roadmap, in the commercial contracts and support services.

4G has had a lot of marketing spend and will be big, but a 4G MVNO campaign does not need  huge spend

A lot of marketing money has been spent on 4G and it will be big, but that does not mean 4G MVNO marketing needs to be big. Sure, EE has spent tens of millions, if not hundreds, on Kevin Bacon on prime TV ATL campaign... but they also launched #OM4G around the social networks and hit exactly the same audience for the cost of a couple of your marketing execs and some creative freedom free of corporate risk constraints (unlikely in an MNO :)) Data MVNOs like Bliep* launched and grew almost entirely on Twitter. Cheap marketing and a niche = low SAC, the mainstay of wholesale. add the fact that MVNOs are generally attracting a higher yield for their data and we have an ideal scenario for 4G to pull us out of the 3G hell we have, where heavy competition and unlimited packages mean 5% of the users are using 95% of the data and nobody can get a fast connection when they need it, reliably at least.

Clever Twitter and social marketing by MVNOs that is too risky for MNOs can hit at core 4G data market with low SAC

So the dawn of clever MVNO marketing is already here, and shifting the focus of MVNO marketing spend from being like MNO spend (mainly ATL with some dabbling elsewhere) to very experimental, experiential and social marketing... exactly what internet savvy 4G target market consumes. So no need for an overcomplicated six degrees of separation to attract a market and generation who are more 4G aspirational than 4G ready.

So you got past 4G and LTE contractual, MNO roadmap and other issues: is your MVNO platforms operationally ready?

Many MVNOs today have 3G, however nobody uses it as they are obsessed with competing with MNO bundles. The fact is that 50% of UK smartfone users use less than 100mb of data, and the rest use around 200mb. That means that by paying as much as 5p to 10p per megabyte on an MVNO, these users will be better off than getting an unlimited MNO tariff. What is more, the host MNO is better off, as retail yields are around ten times less than this. The MVNO is better off, as these data revenues are what shifts MVNOs form what I call a "£10 minus ARPU MVNO" to a "£10 plus ARPU MVNO".

By enabling the most advanced OTA MVNO data settings on the market we have seen huge growth in data usage in even markets which the MVNO would never assume they could generate usage.

The key issues around negotiating LTE MVNO and getting an MVNO 4G ready

The back-end is still critical, even the slickest MVNO architecture from tier 1 providers does not come with the back-end to enable MVNO friendly OTA and APN data settings, some of them incur up to 50% of customer care calls, which at an average of around £4.50 cost to an MVNO of a customer care call today, can easily wipe out the increased ARPU from data, and even all the profit from a user. Finally, the proposition needs to work. From running the SMS tariff top-ups form MVNOs we have great insight to the propositions MVNO customers actually buy, and they are very different from what most MNO propositions are, and a world away from the tizzy that MVNO management and proposition consultants can whip themselves into.

Every informative case study should end with a shameless plug for our services Virtuser MVNO consultancy :)