Those disintermediators over at
Telco2.net suggest that new KPIs are needed for the mobile operators. I agree heartily and the following cut & paste analysis from the
OFCOM market statistics are used as evidence:
A quick glance at the figures will show that there is no correlation between customer numbers and revenue (either call or sms/mms) Although OFCOM doesn’t list profitability, it is a well-known fact that Vodafone is the most profitable. Obviously this is primarily because it has the largest revenue, but also really importantly it keeps more minutes on-net than anyone else.
The Telco2 gang goes on in the article to compare the Mobile business to the Airline business and I absolutely love this comparison. In my opinion, the biggest similarity between the industries is the importance of capacity management and the low marginal costs of carrying additional traffic. Why no KPIs from the operators on utilization? I’m sure the Vodafone shareholders would love to know how they are getting along in filling that extra 5MHz of capacity which cost a mere £2bn in the 3G auctions.
Vodafone currently have a promotion which plays exactly to the traffic management aspects that the Telco2 gang wants to see in action. This is free weekend calling & texting for PAYG customers if they spend £5/week. This is a great deal and attempts to fill the pipes when Vodafone will have the most available capacity - at the weekend. This is as good an example of profitable Traffic Management at work as is around today. As long as the off-net traffic doesn’t grow to huge proportions (especially to H3G UK) this will be a real winner for Vodafone.
In a similar vein , I can think of an automated nightly incremental back-up service for phone content which could be sold to the business sector for a small price – a sort of phone secure vault concept - which will execute in the middle of the night when traffic on the network is minimal.
I believe the major challenge for all the operators have to do is to get usage up on the new services. For instance, there is evidence that MMS is taking-off but the rate is slow and the market is still a long way from crossing the chasm into the mainstream market. If I was in the Vodafone position, I’d seriously think about a promotional deal for 6 months whereby MMS-email transfers are free – they only need to ask any teenager to find out they are already exchanging photos for free with Bluetooth and pc cables/msn-im anyway. It will get people used to sending photos over the air and make sure the MMS settings are correct on the phone. I’d be pretty scared about extending it MMS-mobile because of the termination costs to other networks, but Vodafone could definitely make them free for family and companies plans where on-net traffic is guaranteed. The important point is fill the pipes and get people using the, I'm sure, underutilized-MMS servers.
I think Vodafone are making a good attempt with the MobileTV launch and current offer with the 30 day try before you buy offer.
In summary, I think Vodafone is starting to do a pretty good job on “try before you buy” schemes but could go a lot further with a little imagination and a few pounds investyed with the Telco2 gang. I also see a couple of schemes coming out of Newbury aimed at addressing the capacity management issue. Again, they could do a lot, lot more…
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