Mobile operators investing in digital are outperforming their peers in customer satisfaction and revenue growth. That’s the key finding of a report by the Digital Transformation Institute at Capgemini Consulting, the strategy and transformation consulting arm of the Capgemini Group.

The report reveals widespread consumer dissatisfaction with mobile network operators across Europe and the US, linked to a lack of investment in digital. More than half of the 48 operators surveyed registered a zero or negative Net Promoter Score (NPS) meaning consumers would not recommend their provider to friends or colleagues.

5,700 customers of 48 mobile network providers across nine countries in the US and Europe were surveyed for the report, titled: Unlocking Customer Satisfaction: Why Digital Holds the Key for Telcos. It paints a picture of an industry undergoing change. The rise of web and mobile apps is driving a significant shift in what consumers expect from their mobile operator. Physical channels are falling out of favour, with only 8 per cent of consumers surveyed now considering the existence of stores as a must-have for mobile operators. Consumers want an improved digital experience and yet only a third (36 per cent) report that their operator is providing it.

But the report also found that the focus on digital customer experience is paying off for some operators. The survey shows a positive correlation between the use of digital channels and the NPS of mobile operators. High-NPS operators also garnered an average revenue growth of 33 per cent over 2012-14, whereas the low-NPS operators suffered a revenue decline of 7 per cent on average over the same period.

This high-performing digitally-focused brands are either smaller operators that have been launched in the last decade, or larger players that have managed a transition, but all have adopted either a digital-only operating model or a hybrid model with a greater focus on digital channels.

The majority of operators, however, are struggling to adapt to the shifting needs of users. Only a third of consumers believe that their operator has used digital technologies – website, mobile apps and social media – to improve the customer experience.

As a result, telcos are facing the risk of losing customers. 46 per cent of consumers who rated their mobile operator “poor” in terms of use of digital technologies plan to switch within the next year, compared with 14 per cent of consumers who rated their operator “great” in the use of digital technologies. Such is the demand for a new type of customer experience that more than half of mobile network users (58 per cent) said that they would switch over to a digital-only operator that exclusively uses digital channels to interact with customers.

The study finds that the benchmark for a quality customer experience is being shaped by the digital and personalised experience users receive from ‘over-the-top’ players such as Google, Apple and Facebook. 44 per cent of mobile users would switch to one of these brands if they introduced a mobile service, with 48 per cent citing “better service quality” and 23 per cent “personalised experience” as the main reasons to switch.

“Consumer expectations of telco providers have changed, but many operators have failed to provide what they demand, leading to low customer satisfaction,” said Capgemini Consulting vice president, Romain Delavenne. “Slow roll-out of digital services lies at the heart of the issue and this is a clarion call for operators to accelerate their digital transformation efforts or risk disruption from digital-only players.

“It is clear that investment in digital is key to improving customer satisfaction, however many incumbent operators are saddled with legacy platforms and distribution channels that make true digital transformation difficult. The success of the newer breed of digital-only or hybrid operators in driving customer satisfaction and revenue growth provides a transition path for more established competitors. For many incumbents, realising quickly the benefits of digital could be tackled by launching greenfield, digital-only operations in the short term while continuing with core digital transformation efforts in parallel.”
The study feeding into the report included survey responses from 5,776 consumers across nine countries: the US, the UK, France, Belgium, Germany, Netherlands, Norway, Spain, and Sweden. The survey was conducted during January and February 2016. This research was supplemented with a web-based, secondary research analysing nearly 60 mobile operators in the US and in Western Europe, including their digital initiatives and their customer experience propositions.