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Are service providers finally customer-centric? Closer, but not quite

Telecom service providers are making progress in becoming more customer-centric, but their services and device strategies still miss the mark.

After years of horrible consumer satisfaction levels and slow service rollouts, telecom service providers say they finally "get it" and are moving to more customer-driven approaches. But have they gone far enough? At least a few analysts answer a resounding "No."

In his NXTcomm 2008 keynote, Telstra CEO Sol Trujillio credited his company's focus on customer demands and layering on services to meet those demands for Telstra's remarkable turnaround from a financially shaky past to its current leadership position in Australia.

"I'm a believer in asking customers what they want," Trujillio said. "When you have the right content, and it's customized to the customers you're serving, you get the usage."

Senior executives from Sprint, Verizon and AT&T echoed these sentiments in their NXTcomm keynotes. They claimed the phones and services they were rolling out were better attuned to the market and that future development would be more agile in meeting customer needs in a more open, collaborative fashion.

But has this transformation really taken hold?

"I think what the carriers are saying now is anticipatory," said Tom Nolle, founder and president of the Voorhees, N.J.-based strategic consulting firm CIMI Corporation. "They have now started a really honest and earnest movement in the right direction, but that movement has not yet fulfilled its mission."

However, the agility the telecoms so proudly trumpeted ultimately cannot come directly from them, Nolle said, but must come through strategic partnerships with more agile players.

"All of the public carriers are public companies that have very long planning cycles," he said, "and … these organizations are not particularly facile at dealing with the twists and turns of the consumer market."

The solution, according to Nolle, is to partner with companies like Microsoft, Yahoo and -- yes -- Apple to enable and execute advanced services while providing the critical infrastructure to make these services possible: The bandwidth, subscriber data, and location-based information are all useful tools the service providers can still best provide.

In addition, telecom executives may have claimed to be answering customer demand with new devices like AT&T's iPhone and other products developed to keep up with the wildly popular device. But here, too, they are stuck in an old way of doing business.

"Most of the carriers look at the device and say, 'What can I put on this device to maximize my profit?' " said Jack Gold, principal of Northborough, Mass.-based J. Gold Associates. This means devices designed to get texters texting, photographers clicking and sending, and music aficionados downloading, but rarely letting people do all three.

Also, carriers are ill prepared to look at customers outside of narrow usage patterns, Gold said.

"I don't think they are that capable of understanding who their constituents are," he said. "[Their customer base is] huge, and it's very hard to target." So instead they target broad horizontal use patterns.

Opening up the network

There is a simple answer that carriers have paid lip service to but not followed through on: Open up the network.

Just as with services, devices are too fickle a field for the telecoms to manage themselves, yet carriers persist in controlling the environment as closely as possible.

"They think they're in the business of providing you with a bunch of services instead of just a dumb data pipe," Gold said. "There's a lot of money to be made in providing services, they just don't do it very well. They're going to have to open it up more because people are going to demand it."

To their credit, the providers are making incremental changes -- no small task for businesses of their size.

"They're making progress, but they're taking small steps," Gold said. Data plans are becoming more reasonably priced, he said, and providers are getting better at tapping into GPS and location-based services as well as music and video, although some vestiges of their control-all-points past remain.

"They're still locking consumers into their environment," Gold said. "It's like buying a TV from Sony [and] only [being] able to watch Sony channels. If your services are better than everyone else's, I'll buy them from you."

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