Even in an economic downturn deprovision is NOT the solution
Even before the economic meltdown, in the last three years operators operators worldwide were developing more aggressive business case guidelines for new and existing services. Operators such as Telefonica, Vodafone and Millicom today have imposed business case guidelines that are more strict than ever before.
To comply, VAS managers have followed the strategy of evaluating subscribers and deprovisioning services from low usage segments. We have seen this happen over and over again with operators in Europe, Latin America and Asia.
Deprovisioning subscribers from low usage segments looks good on paper because it makes it seem that operators are serving the same or even a larger subscriber base with lower CAPEX. The problem with this is that operators are playing with financial formulas instead of increasing revenues. In addition, many times operators do not provide an alternative service for these segments.
While new models for commercial agreements that are not based on a per subscriber license are providing viable alternatives, the problem is still on the side of the operator. Not providing alternative services automatically eliminates any possiblity of revenue from these subscribers.
A good example of this is voice mail, which has proven to be the main VAS revenue generator for operators worldwide. There is plenty of experience and data available about user behavior to design a different strategy based on market segmentation and provide new or differentiated offerings to subscribers, based on their usage. Missed Call Alert, for example, is a great service for the low usage segment that does not generate much traffic for voicemail. Operators, however, have launched the service but then deprovision subscribers from voicemail, taking away missed call alert. Only a few provide missed call alert for non voicemail users, mainly because of platform limitations or sometimes because the call flow does not allow notification for non voice mail subscribers.
Even though it is tempting in tough economic times to deprovision subscribers, in the long run, this strategy might prove counterproductive. By focusing on subscriber usage and needs, operators can find new ways of providing the right service to their subscribers, and in this way increase their productivity and effectively improve their bottom line by concentrating on revenues, not cost cutting.
To comply, VAS managers have followed the strategy of evaluating subscribers and deprovisioning services from low usage segments. We have seen this happen over and over again with operators in Europe, Latin America and Asia.
Deprovisioning subscribers from low usage segments looks good on paper because it makes it seem that operators are serving the same or even a larger subscriber base with lower CAPEX. The problem with this is that operators are playing with financial formulas instead of increasing revenues. In addition, many times operators do not provide an alternative service for these segments.
While new models for commercial agreements that are not based on a per subscriber license are providing viable alternatives, the problem is still on the side of the operator. Not providing alternative services automatically eliminates any possiblity of revenue from these subscribers.
A good example of this is voice mail, which has proven to be the main VAS revenue generator for operators worldwide. There is plenty of experience and data available about user behavior to design a different strategy based on market segmentation and provide new or differentiated offerings to subscribers, based on their usage. Missed Call Alert, for example, is a great service for the low usage segment that does not generate much traffic for voicemail. Operators, however, have launched the service but then deprovision subscribers from voicemail, taking away missed call alert. Only a few provide missed call alert for non voicemail users, mainly because of platform limitations or sometimes because the call flow does not allow notification for non voice mail subscribers.
Even though it is tempting in tough economic times to deprovision subscribers, in the long run, this strategy might prove counterproductive. By focusing on subscriber usage and needs, operators can find new ways of providing the right service to their subscribers, and in this way increase their productivity and effectively improve their bottom line by concentrating on revenues, not cost cutting.
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