Thursday, 14 December 2017

Network investment is a marketing expense – Telstra

By Mary Lennighan, Total Telecom, in Singapore
Tuesday 18 June 13

While the network is important, the only way to differentiate is through customer service, Australian operator insists.

Telecoms operators should view investment in their networks as a marketing expense rather than a competitive differentiator, a top executive from Telstra Global told attendees at CommunicAsia in Singapore on Tuesday. Telcos face "a fine balancing act," when it comes to ploughing cash into their networks without having a clear view on what the return on that investment will be…

Telecoms operators should view investment in their networks as a marketing expense rather than a competitive differentiator, a top executive from Telstra Global told attendees at CommunicAsia in Singapore on Tuesday.

Telcos face "a fine balancing act," when it comes to ploughing cash into their networks without having a clear view on what the return on that investment will be, said Martijn Blanken, managing director of Telstra Global. The network is an important asset for operators and there is still money to be made in plain old connectivity, but the ability to differentiate comes from elsewhere, he explained.

If a telco wants to position itself as a credible player in a particular region then of course it needs the network coverage, he noted. But telcos should view network investment as "a marketing expense rather than a network expense."

Blanken's stance on network spending forms part of what he described as the "telco truths". "Scale and utilisation do matter and so does network coverage," he said.

In addition, customers also all expect a minimum level of service quality and security, without which the operator runs the risk of losing customers. However, again it is a question of balance. "You don't want to over-invest," he advised.

Another "truth" is that telcos are under threat from over-the-top (OTT) players at the retail level, but there is also an opportunity here. "[OTT] helps you…to be more innovative," Blanken said, noting that telcos should be looking to innovate in the bundles and offers they can provide to their customers. For example, Telstra has been able to protect its SMS revenues despite the popularity of services like WhatsApp because of the way it packages its services, he said. "There is a way to beat them," he added.

"OTTs are very good customers as well," on the wholesale side, Blanken went on. "They need connectivity…There is quite a bit of money to be made."

But while all of the above are important considerations for network operators, "they will not set you apart from your competitors," Blanken warned.

"The true differentiation will be the customer experience," he said. And truly good customer service involves an operator's entire workforce.

The front line customer service staff who interact with the end-user "are the strikers; they have to kick the goals," Blanken said, turning to a football analogy. But they require the support of all the back office staff, from marketing to IT, legal and finance, he said.
 

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