OTA Support Can Save Operators Billions, says InnoPath
- Monday, September 14th, 2009
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InnoPath Software, which specialises in Over-The-Air (OTA) customer care for mobile devices, has announced the completion of a year-long analysis of frontline customer care for mobile operators, with an emphasis on what it calls the growing Smartphone support problem.
The study found that the rising popularity of Smartphones and data services has led to longer, more complex support calls, which are much more expensive for mobile operators to resolve. According to the study, these longer calls resulted in global costs of $3 billion (1.8 billion), directly tied to customer care. Additionally, operators able to deliver higher First Call Resolution (FCR) of consumer issues with shorter, more efficient call times enjoyed significant advantages in customer satisfaction, brand equity, reduced churn, and ultimately, better financial outcomes.
This study, the first focused on mobile customer care, clearly outlines the global impact that increasingly complex Smartphones are now having and will continue to have on the wireless industry, says Innopath Vice President, Marketing, Dave Ginsburg. Our analysis clearly showcased the massive costs – ranging into the billions of dollars – that supporting these new mobile devices has on an operators bottom line. InnoPaths customers have embraced this message and are in the process of implementing our ActiveCare solution, the first OTA frontline care solution for mobile operators, with an expected public rollout at the beginning of 2010.
InnoPaths study incorporated data from Tier-1 operators, handset makers and mobile platform providers in North America and Western Europe. The study spanned 58 million Smartphone subscribers, out of a footprint of 130 million, targeting more than 7,500 frontline care personnel, and focused only on device-related issues.
According to Innopath, four primary call drivers that were analyzed in the study result in expenses of $466 million in the first year, with OTA-enabled care delivering savings of $223 million, or 46% overall. This number grows in future years, based on additional call types addressed and continued strong Smartphone growth.
Extending the analysis globally, the study found that OTA support for Smartphones can save a targeted group of Tier-1 operators close to $1.2 billion in the first year of deployment, while enabling better support, reduced churn, and a more satisfying end-user experience. These savings grow to over $4.4 billion by the fifth year of deployment.
InnoPath notes that the widespread adoption of industry standards has enabled the practical delivery of OTA support, which until now has been problematic with first-generation solutions. With the rise of the superphone and advanced Smartphone platforms such as Android, Windows Mobile, RIM, Symbian, and the iPhone, support costs are expected to increase by 400% over the life of the phone, driving the need for mobile network operators to provide more efficient, cost effective support.
InnoPath points out also that call times also have an impact on customer loyalty, as well as on the productivity of the 20,000+ frontline Customer Service Representatives at a typical Tier-1 operator. In contrast to the 1.25% churn enjoyed by operators with top-tier customer service, an operator with sub-optimal care may have a churn upwards of 2.5%. (Churn rates are much higher outside the US Ed). Assuming 58 million subscribers, this results in a difference of 725,000 subscribers per year, or a net loss of just over $739 million.
And this revenue impact, says InnoPath, is only part of the story. Taking a broader view of referral economics, both additional and lost revenue from promoters and detractors, the impact of churn becomes that much greater. Beyond direct churn, a satisfied customer who recommends a wireless operator will help drive new business, while an unhappy subscriber may drive away other potential customers, before cancelling his or her own service.
InnoPaths ActiveCare is an OTA frontline care solution for mobile operators, combining a server deployed at the operator, with a powerful ActiveCare client on the phone. Together, they create a real-time OTA connection that facilitates configuration, troubleshooting, updating and security. InnoPath will exhibit its multi-network ActiveCare solution at the upcoming 4G World show in Chicago, to be held from 16 17 September.
Theres more detailed information about the study, including the methodology used to reach these conclusions, here.