Smartphone headache – Managing the expense of supporting the smartphone

Smartphone headache – Managing the expense of supporting the smartphone

David Ginsburg

David Ginsburg, vice president of marketing and product management, InnoPath Software

In an era of lower subscriber and revenue growth, as well as decreased availability of capital, a prime goal of the mobile operator must be to drive costs out of the business while maintaining customer satisfaction.

However, this goal is sometimes at odds with the growing cost of smartphone support. On average, these devices cost four times more to support than less sophisticated feature phones, and their growing popularity means that more than 30% of all customer care calls are now configuration related.

Cutting costs

So what is an operator to do? Do they hire and train additional front line care personnel, incurring additional OPEX, or do they cut care costs, as some operators are already doing, with the unavoidable negative impact on customer satisfaction?

A relatively new technology, called mobile device management (MDM), permits

the operator to create a real time, over the air channel between the subscriber’s phone and the frontline customer service representative (CSR). It enables lifecycle management of the phone through configuration and troubleshooting, as well as the control of hardware, security and application settings on the device.

Via this channel, the CSR has a real time view into the device, allowing them to check for proper settings and to make changes if required. Because of this, it can greatly reduce configuration call times, increasing first-call resolution and thereby increasing customer satisfaction. Better yet, by reducing call times, MDM has a direct impact on OPEX.


Smart working

With MDM, when the subscriber places a call to frontline care, the device will be automatically queried for its application settings as well as critical device status such as battery, firmware revision, and memory. These application settings are automatically compared against the operator’s reference configuration, and the CSR may then push corrections to the phone. Time savings are in the order of minutes, and across tens of millions of calls annually, the savings add up.

MDM can also be deployed in such a way as to facilitate call avoidance, heading off some calls before they even arrive at the CSR. Two options include integration with the operator’s interactive voice response (IVR) system, or the deployment of a subscriber self-care portal, much like they use for billing and handset orders today. The IVR angle is important, as even if a subscriber is on hold to speak with a live operator, they will now know that their problem is beginning to be addressed. This helps temper the grievance rehearsal anger spiral, where a customer becomes angrier the longer they are left on hold without any problem resolution.

In fact, MDM can be immediately deployed to contain ballooning costs. This contrasts with traditional initiatives that require years for planning and deployment, ineffective in an environment demanding near term results. InnoPath and Stratecast have jointly prepared an ROI model that analyses various MDM-assisted care calls and calculates potential savings.


Counting pennies

As a starting point, frontline care will cost operators over $25 billion globally in 2009, attributable to configuration calls, firmware updates (much like Windows update), and the cost of phone returns. MDM will save operators $3 billion of this in 2009, growing to $23 billion in 2013 through increased MDM client availability and additional types of calls addressed.

At a typical tier 1 operator, configuration savings alone will grow from $56 million, more than enough to justify the initial investment, to $564 million in 2013; a significant chunk of the $1.4 billion in total costs.

Additional savings beyond those from configuration include a reduction in device returns due to usability issues, and a reduction in device recalls due to buggy software, by being able to automatically update phones in the field. In addition, further reductions through call deflection by solving the problem via a self care portal or when the subscriber is on the IVR, are possible. There are few opportunities for savings of this magnitude within an operator that do not require years of planning and training.

The business case for MDM spans both feature phones and smartphones, but it is especially strong for smartphones. Operators are counting on Windows Mobile, Symbian, iPhone, Blackberry and Android devices for future revenue growth. In fact, analysts predict that 30% of all phones shipped in 2009 will be smartphones, and overall penetration will approach 75% by 2014. Given the growing percentage of OPEX attributable to customer support, MDM provides a viable solution for containing costs.

The technology is also applicable to both pre-paid and post-paid customers. In fact, given the traditionally higher churn rate for pre-paid, any solution that can assist with customer satisfaction and service usability will impact loyalty. And, it spans both consumers and enterprises, permitting the operator to effective address hosted enterprise device management opportunities.

Looking to address an operator’s OPEX burden, few solutions offer the relevancy of MDM while addressing the smartphone support issue head-on. Its results include cost savings, greater service usability, and greater customer satisfaction. Given the operator’s conflicting goals of reducing costs while maintaining customer satisfaction, the technology is now poised to take its place for frontline customer support.

InnoPath is a global provider of mobile device management technology for operators.

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