White paper

What customers want

Put the customer at the heart of your business

Contents
3 Summary customers are searching for an enriched experience Why become even more customer-centric? What customers are doing and what they intend to do What do customers need and prefer?

12 What are the implications for service providers and how they can differentiate?

What customers want

Summary customers are searching for an enriched experience

This paper describes the disruptive trends in user behavior and needs based on our worldwide market insights. It then uncovers the implications and opportunities for service providers by enriching the experience of their customers.1)
As we move into this digital lifestyle, customers are faced with a growing number of use cases, applications, services, technologies and devices. Todays digital life is complicating the life of the majority of people, leading users to demand greater simplicity. There is a contradiction between the potential options of new technologies the digital freedom and the demands of customers to manage the proliferation of these options. Effective enrichment of the customer experience requires deep insights into customer motivations and preference, as the need for simplicity differs according to customer segments. Major service innovations are taking place on the Internet, but communications service providers (CSP) have the opportunity to simplify the use of the many Internet based services and media for their customers. CSPs can increase the lifetime value of their customers by providing the right tools for the efficient organization of numerous communications channels and content. They can do this by granting instant easy selection of and access to the right piece of information, context sensitivity and efficient multi-tasking. Providing solutions for these customers needs represents tangible business opportunities for creative CSPs.

Customer behavior is changing rapidly, with users moving beyond simple voice services and being willing to pay for more advanced applications. The penetration of broadband services is rising and bandwidth consumption is growing quickly, driven by well known Internet platforms such as Facebook, MySpace and YouTube. Consequently, customers are accessing the same set of Internet services regardless of what device and access technology they are using. A major move into the digital lifestyle is taking place through Web2.0, the Internet as a platform on which active users connect to each other in social networks and share self-generated or selected content. People are always connected and shift a part of their life on the web. Web based communication is already cannibalizing the use of conventional telecommunications services.

1) For more details, see also the Nokia Siemens Networks Whitepaper Enriched Customer Experience , 2009

What customers want

Why become even more customer-centric?

Customer orientation is at the top of CSPs agenda worldwide. 33% of Nokia Siemens Networks customers state that customer orientation is their primary goal for the future.2) A positive customer experience boosts long term profitability in a number of ways: Profitability of the customer base: Excellent satisfaction rates drive customer loyalty and decrease the costs associated with churn and enables the harvesting of long-term customer relationships. New service revenues: Positive experiences boost service take-up and usage. However, most service and business model innovations as potential sources of new revenues are taking place on the Internet, so the challenge is how to cope with that. Brand building: Verbal communication has a high impact in the age of Web2.0. Competitive differentiation: Price competition remains fierce. In many markets, there are signs that price decreases are slowing down, but price is still the dominant driver in competition. The ability to provide sticky services lowers the dependency on low prices. The necessity of customer orientation has increased still further under the current tough market conditions, which are heavily influenced by the economic crisis. CSPs need to be extremely effective in all customer related activities, such as meeting the needs of the most valuable customers in an excellent yet cost-effective way. How can CSPs improve their customer orientation and enrich their customers experience to stand out among the competition? According to Ovum telcos offer comparable products and services, so good customer service and positive customer experience are among the few avenues for differentiation.3) This requires a deeper insight into what the customers are doing and what they want. What are the major trends in user behavior?

2) Nokia Siemens Networks, Business needs study, 2008 3) Ovum, How the telco can provide an excellent customer experience, 2008

What customers want

What customers are doing and what they intend to do

Usage and willingness-to-pay is shifting beyond voice
Among Internet users in developed countries, the majority of spend on communications and infotainment services are not directly related to voice. Instead, they are either for Internet, TV or bundles without a dedicated price tag for voice.4) The structure of customers budget in terms of time and usage is also changing quickly. In the UK for example, our monitoring of the real life usage of mobile smartphone users indicates a heavy increase in using music, maps, e-mail and browsing from 2005 to 2008. In 2008, over 40% used e-mail actively compared to less than 10% in previous years. There has also been a heavy increase of non-communication usage time of the terminals, from 30% to 52%. The number of active browser users has increased from 56% to 88% and between 2007 and 2008, browser data usage increased four-fold. This is a clear indicator that the usage patterns are changing quickly.5) traffic and bandwidth growth in fixed broadband. In emerging markets, about half of Internet users plan to upgrade their connection during the next 12 months. In developed markets the share of upgraders is about 40%. As a rule of thumb, the lower the current access speed, the higher the willingness to upgrade. The reason is the increased usage of high bandwidth applications such as video downloading and streaming, music and photos, as well as IP telephony.6) Figure 1 In parallel with this, mobile broadband is taking off and is used in a complementary way to fixed broadband in most markets. In emerging markets about 5% of the fixed Internet users are also accessing the Internet on the go and in total, 30% are interested in doing so within 12 months. The corresponding figures in developed markets are 18% and 30%.

Broadband penetration and bandwidth consumption is increasing

Broadband is booming in developed as well as in emerging markets, with new collaborative and interactive multimedia web applications driving broadband deployments. In particular, the explosive growth in the use of video services is filling broadband access networks and backbones. We estimate traffic will increase 100 fold by 2015. For fixed broadband, subscriber growth is slowing down, but at the same time we see accelerated

Figure 1. High bandwidth services have highest growth. Source: Nokia Siemens Networks Broadband survey, Germany, 2008. (n=709) Application usage at home in % Browsing & searching Reading/sending e-Mails Downloading music/photos Downloading videos Streaming video Uploading music & photos Playing online games IP Telephony Daily / almost daily 5 9 7 15 13 14 16 15 11 11 11 18 22 17 19 26 14 9 12 50 At least once per year 20 15 19 42 77 85 27 17 42 37 29 21 16 10 3 5 4 4 2 4 9 3 6 2 12 Dont know 2 5 4 Increase of regular users in 12 months percentage points All users 1 Upgraders 1 1 4 6 6 6

At least once per week

At least once per month

Never / dont use this application

4) Nokia Siemens Networks, Broadband study, 2008 5) Nokia, Smartphone360 panel, 2008 6) Nokia Siemens Networks, Broadband study, 2008

What customers want

Users are increasingly technology and device agnostic

Customers use a growing variety of device types to capture, display, store and share content over multiple network connections, including DSL, cable, WLAN, WiFi and cellular.

Customers do not distinguish between fixed and mobile in their usage patterns. They basically use identical services, applications and web sites regardless of their mode of access and type of device and do not generally care about the underlying network technology. For example in the UK, the trendiest services on the go are the popular Internet services such as Google, BBC, Facebook and YouTube, meaning that people are using exactly the services they use on the fixed Internet.7) This is a clear trend in all observed markets.8) Figure 2

Multi-play service bundles are extremely popular

Customers readily accept service bundles consisting of fixed voice, Internet, TV and/or mobile voice. The motivation for bundle subscription is simplicity: cost transparency, a perceived discount and the one-stop-shopping experience. The high rate of bundle penetration goes hand-in-hand with a high penetration of flat rates. Figure 3

Browsing & searching the web Reading/sending e-Mails Downloading music Downloading videos Watching TV programs Uploading music files Playing online games Daily / almost daily At least once per week At least once per month At least once per year Never / dont use this application Dont know

Figure 2. Similar application usage in fixed and mobile

Figure 3. Multi-play bundles are extremely popular. Source: Nokia Siemens Networks Broadband survey 2008. Bundle penetration (%) Developed markets Fixed telephone + Internet 42 58 Fixed telephone + Internet + IPTV Top 3 packages (%) Type of Internet tariff (%) (n=3845) 22 52 18 87 (n=2229) Flatrate Rate based on volume Rate based on time Other Dont know 7

Fixed telephone 9 + Internet + Mobile phone

Emerging markets Fixed telephone + Internet

(n=2833) 3 6 36 13 10 (n=1161)

27

73

Fixed telephone 16 + Internet + Mobile phone Fixed telephone + Internet + IPTV 9

67

7) Nokia, Smartphone360 panel, 2008 8) Nokia Siemens Networks, Broadband study, 2008

What customers want

Strong user engagement

ity un m ction a

Co inte m r

The level of involvement is increasing among customers

The good news for CSPs is that the market has become 25% more amenable to new Internet and mobile services. Customers are generally more interested in new services and features and are experimenting with the Internet and their mobile handset their attitude has shifted from easy to do to easy to learn. The number of non-reachable customers is diminishing. For the growing number of highly involved customers the Internet and their handset are no longer a tool, they are an indispensable part of their lives. These users also play an active part in the Web2.0, such as becoming involved in making, trying and improving new applications.9)

In dis di c

Search and UGC replacing media company control

ual vid very o

Web2.0 service providers

ti m M u l e nt ori

Exploding video usage

at e dia io n

x Fle u m s con

ib l pt e io n

Usage is time-, place- and device-shifted

Figure 4. The Web2.0 is changing the customer experience.

The Web2.0 is changing the customer experience

The Web2.0 is part of our life and Web2.0 services are changing the nature of the Internet rapidly. Web2.0 stands for an active usage behavior in four dimensions: Strong user engagement in social networks with intensive communication over various channels. There is a clear shift from locally defined communities to virtual communities tied together by common interests the social networking platforms Facebook,

MySpace and Hi5 occupy 5th, 6th and 8th positions in the table of the most popular websites.10) Individual media discovery, where search and user generated content are replacing media company control. YouTube, a platform for sharing user generated or selected videos, has reached about 20% penetration in advanced Internet markets, the search engine Google about 50%. Creation and sharing of content is growing rapidly. Flexible consumption, meaning the freedom to time-, place- and device-shift usage according to personal preferences. This is aided by the growth in HSPA mobile broadband usage. Another contributing factor is the fact that services such as IPTV, which

allows flexible time shifted consumption, are gaining substantial revenue growth in Europe and Asia. Strong multimedia orientation with focus on video: Most Internet traffic volume is already video, with some ISPs reporting that video comprises some 90% of total Internet traffic. YouTube alone is reported to account for roughly 10% of the worldwide Internet traffic.11) The growth in numbers of users, especially of the video, music and gaming driven communities, results in an exponential traffic growth, with overall Internet traffic growing at 75% per year.12) Figure 4

9) Nokia, Segmentation study wave 3, 2008 10) www.alexa.com, April 2008 11) www.datacenterknowledge.com, 2007 12) Business Week, Telecom: Back from the Dead, 25.06.2007

What customers want

2 hrs 23 mins 8% 18%

X1.9

4 hrs 25 mins SMS 5%

There are more than 450 million registered social networking users worldwide, meaning that about 40% of worldwide Internet users are currently engaged in social networks, a figure that will reach 70% in 2012.13) We can observe a trend towards higher involvement in the area of Internet and communication services: People are doing more, more often. Young people of 15 to 24 years of age, the digital natives, play a major role in trendsetting they desire more control over service usage, independent of location and time schedules. Digital natives are moving away from linear formats like TV and radio, are impatient, are searching for overlapping media experiences and want to actively express their originality in Web2.0 communities.14)

Text communications

53% Email 38% IM 57%

75%

Wireless voice

21%

Wireline (incl. VoIP) 2000

26% 2006

Figure 5. Estimated time spend on communications, per person, per week (France). Source: Capgemini TME Strategy Lab analysis based on Arcep reports; iDATE, Telecom 2.0: Emerging Usages and implications for Carriers, June 2006; MSN Report, Europes Online Youth, 2006.

Web based communication is cannibalizing telco based communication

According to estimates, in some markets about half of users time spent on communication services is already occupied by Internet based messaging and VoIP services.15) Instant Messaging (IM) is the fourth most popular Internet activity.16)

The appeal and variety of usage scenarios for IM and VoIP in a Web2.0 world such as chatting in virtual community rooms is a threat to profitable SMS and voice business. Additionally, the well-known Internet brands are gaining popularity in the mobile domain. For mobile users it is all about mobile access to the Internet. For example in the UK, operator services suffered a dramatic fall in relative popularity, from 57% to 22% of browsing users.17) Figure 5

13) Pyramid Research, Social Networking Goes Mobile, 2008 14) CapGemini, Digital Natives Report, 2008 15) CapGemini, Digital Natives Report, 2008 16) After searching, Email and social networking, European Interactive Advertising Association, 2007 17) Nokia, Smartphone360 panel, 2008

What customers want

What do customers need and prefer?

Customer experience there is room for enrichment
How can CSPs enrich the customer experience to ensure profitability in the long run? The actual customer experience can be displayed by measuring the satisfaction and the respective importance of the experience drivers as perceived by the customer. The mobile market in France, a typical example of a highly competitive market, shows the typical levers for improvement: the portfolio of available services, the service quality, the pricing and bundling as well as customer care. Figure 6
Importance Relative weight on overall satisfaction 60% Threats Tariff structure & bundling 50% Data costs Customer care / after sales service Service offerings Data service quality incl. speed Core strengths

Brand Voice/reception quality Maintain

40%

Call costs Improve Handset offerings

30%

Network coverage

Weaknesses 20% 15% 10%

Opportunities 25% 30% Satisfaction level % of customers perceiving an excellent experience 20% 35% 40%

A provocative statement: Todays digital life is complicating the life of the majority of people
What is the underlying reason for people perceiving a need for enrichment? In general, people do not feel that the digital life provides a compelling experience in their day-to-day usage, making their lives easier. In detail the points are: Complex service and device offers: People need to manage an increasing variety of contacts, communication channels, community memberships, content and media. Most people find it hard to remember all these application specific passwords, while different

Figure 6. Mobile customer experience in mature markets example France. Source: Nokia Siemens Networks Pulse 2008.

media formats make it difficult to share media. Device form factors, software offers and features are increasing exponentially and many customers find it difficult to understand the benefits of the new gadgets and how to use them daily in a suitable way. Customers have to choose among an increasing variety of fixed and mobile services, which often exist in completely separate worlds. Pure fixed service bundles dominate the market, but there is significant interest and willingness-to-pay for combined fixed and mobile Internet

offerings. About 40% of Internet users worldwide would prefer these integrated offerings and about 30% would be ready to pay appropriate prices.18) Easy interactivity and the ability to personalize the service and mobile handset plays another key role. A proof point is the success of devices that are tailored to Internet usage. It is also astonishing that mobile handset users are less satisfied than laptop users when asked about their broadband usage.19)

18) Nokia Siemens Networks, Broadband study, 2008 19) Nokia Siemens Networks, Broadband study, 2008

What customers want

Motivation Emotion / Pleasure Tasting Watch what is happening Escape from daily life Early and late majority Linking Actively share Do more, live more intensively Innovators, early adopters

Participation Passive / Consumption

Consumers Connecting Necessity Need to be encouraged to find solutions Non-adopters, laggards and late majority

Prosumers Managing Enabling new activities Actively seek solutions Early majority

Quality issues: The main drivers of satisfaction for broadband usage are the time for opening websites (the response time of the network), the stability of the connection and the speed. In the wireless area, customers mention issues such as the stability of the connection, the speed and the video quality.20) The most evident wireless disconnection problems occur in buildings. Worldwide operator experience and usage tracking of the Nokia Smartphone360 clearly show that the frequency of mobile Internet use, the session length and diversity of applications used is affected by the quality of the connection and the convenience of the device. Besides price, service quality is the most important barrier in day-to-day wireless broadband usage. Independent of the quality issues, many people are not aware of how and in which situations they can use different access technologies and how to connect to them. Pricing and charging: Complex tariffs and terms & conditions make it difficult for people to find the tariff that fits their personal preference. The fact that the cost and the price-benefit-ratio of many new services is often not transparent to customers is another major barrier to their use, leading to late adoption. Customer care: When a user has chosen a device, the next barrier is to configure it correctly, such as setting the right access point.

Efficiency / Problem solving Traditional Planning reliability Tidiness Basic values Modem Fun & independence Performance

Figure 7. User differ according to their motivation for and the style of communication and media consumption.

To sum up: Users demand more simplicity. There is a contradiction between the potential options of new technologies the digital freedom and the demands of customers to manage the proliferation of options. Effective enrichment of the customer experience requires deep insights into customer motivations and preferences.

Simplicity needs differ according to customer segments

We can identify four customer segments with different motivations and patterns of service use.21) This segmentation can be applied in nearly all countries of the world only the sizes of the segments differ. Customers can be segmented according to two dimensions: 1) The degree of participation in the digital life: There are people who prefer to involve and share actively. These are the typical prosumers who are actively engaged in the Web2.0 and keep the virtual social networks alive. Usually these prosumers believe in values such

as fun and independence. On the other side, we find people that are more passive. They are passive spectators of the experiences created by others or they need to be encouraged from the outside to use options and solutions provided by the Internet. 2) The type of motivation to take part in the digital life: Some are searching for pleasure and fun, to escape from daily life or seek new experiences, for example linking themselves to new friends, to chat or to explore cool things. At the opposite end of the spectrum there are people with a more rational attitude towards the digital life. For them it is more about managing their daily life, private or business, in a more efficient manner. Figure 7

20) Nokia Siemens Networks, Broadband study, 2008 21) Nokia, Segmentation study wave 3, 2008

10

What customers want

Active / Exposure / Sharing

Motivation Emotion / Pleasure How to get the best entertainment? Short and easy available media Preference aware services Personalized screen How to master many simultanous activities?

Participation Passive / Consumption

Multi-experience services Multi-activity-screen Active / Exposure

Consumers How to make use of the Internet? How to use interfaces and controls Practical features without gimmicks Uni-tasking: one experience at a time Single push screen

Prosumers How to stay in control anytime? Permanent access to personal content, independent of the device Result oriented services for efficient organizing Multi-screen

There is an over-arching desire to have more control over services and flexibility in how and when to consume
Consumers demand a straightforward and clear set of options. They require bite sized info push and more passive TV style services with limited interactivity options. Always on is not required. There are two types of consumer customers:

Efficiency / Problem solving Figure 8. Different experiences.

Pragmatic consumers the single push screen experience

Practical problem solving needs predominate and the key to success is the removal of entry barriers with easy to use devices and services. These customers require services that help them with their daily routines at a single click, pre-configured and self explanatory. Service examples are: Google Maps, linear TV, simple standard messaging services such as e-mail and SMS Standard broadband access at home

Service examples are: YouTube, Yahoo widgets, IPTV with smooth interactivity Standard or high capacity DSL broadband access at home and light mobile broadband for killing time on the move Prosumers prefer to have all options anytime and anywhere. Therefore always-on is important. Prosumers are active Internet users often they are digital natives and therefore they need the possibility of self composed info pull and communication services. According to their motivation, two prosumer segments can be identified:

Service examples are: Flickr, Google text and tabs, Wikipedia, unified messaging High capacity broadband access at home and always on connectivity with mobile broadband on the move Same service look and feel independent of device and access

Adventure seeking prosumer the multi-activity screen experience

These prosumers are experimental, open to change and to discovering new kinds of experiences. The problem now for them is how to master many simultaneous experiences, meaning that tools to easily link them to different people in different Web2.0 communities and services that mash-up different applications to completely new services will match their needs perfectly. A single identity across different web applications would make their digital life considerably easier. Service examples are: Hi5, MySpace, Xing, TheGrid, Facebook, Web.de MultiMessenger High capacity broadband access at home and always on connectivity with mobile broadband on the move Figure 8

Managing prosumer the multi-screen experience

The issue for these customers is how to stay in control anytime and organize their communication and content sharing tasks. They need permanent access to personal content and services without dependency on the device and the access technology. These prosumers therefore need tools for multi-tasking and -sharing to achieve results efficiently.

Entertainment seeking consumers the personalized screen experience

For these customers, one of the major requirements is to be able to select the right content. Entertainment is an optimization task for them. Keys to success are services that are personalized and context aware, facilitating choices with pre-defined settings, play lists and selections of games.

What customers want

11

What are the implications for service providers and how they can differentiate?
Todays service bundles are not future proven
Lets summarize the needs of the different segments: It is all about simplification in segment specific flavors. CSPs can increase the lifetime value of their customer by providing the right tools for organizing their customers multiple communication channels and content efficiently. They can do this by granting instant easy selection and access to the right piece of information, combined with context sensitivity and efficient multi-tasking. These customer needs represent business opportunities for creative CSPs by enriching their customers experience. However, there are also some downsides as well a need to act with urgency. Bundling strategies have so far been quite successful in gaining market share and increasing ARPU levels.22) But the question is if pure connectivity and access bundling is enough in the long run. To secure ARPU levels? No, because flat rates only address a piece of the market beside the overwhelming acceptance of service bundles there is a willingness-to-pay on top which is not addressed by suitable top-ups.23) To differentiate in the market? No, because todays value propositions such as price, one-stop-shopping and speed are becoming commodity features. To successfully reach yet untapped users, especially the digital divide? No, because new services like mobile broadband have not yet reached the entire mobile market. To be profitable in the long run? No, because the cannibalization of CSP revenues by free of charge Internet communication platforms is proceeding quickly, especially among the digital natives.

22) Ovum, Future of the fixed broadband market, 2008 23) Nokia Siemens Networks, Broadband study, 2008

12

What customers want

Simplifying the digital life a range of business opportunities

As outlined, simplifying the digital life of customers is key to standing out from the competition by providing customer value beyond todays services. How to provide this kind of added value on top of todays connectivity services and bundles? There are a number of obvious levers. Some examples are given below: Irresistible services: The key to reducing complexity in a Web2.0 dominated service landscape is to overcome network and application silos. This is particularly important for the multi-screen and multiactivity-screen needs of the prosumers. There are several keys to simplicity: The first is convenient and personalized access to the set of Web2.0 services that matter to the individual customer. Single-button access can be facilitated by a single identity, spanning over multiple third party web services. Here the CSP can act as a trusted identity broker. On top of this there are various options to facilitate the sharing of content. Just imagine a service where the members of a video sharing community are able to upload videos with a single key click. All the steps such as authentication, uploading the video to the right place and alerting friends are done automatically. When customers become used to such functionally, they are highly likely to stay with the service provider.

Furthermore, CSPs can combine communication packages such as business VoIP with features such as a network wide address book and enhanced messaging and multimedia communication capabilities. Industry initiatives like the Rich Communication Suite Initiative enable convenient use of these kinds of services across the boundaries of different clients, networks and service provider domains. Mashing up different web applications and telco capabilities to services can create the benefit of more relevance to the customer than a single application, for example by adding more context: Think of a community where the members can interact via different types of messaging services, independent of particular access networks and clients, always having the same look and feel. Beyond this, members presence and location information is made available allowing them to leave blogs, photos and video clips on a virtual map. Of course with this service, it is also possible to organize real-life events and the members MySpace and Facebook profiles can also automatically be integrated with it. All messages and contacts from the various social networks are available on a single screen that can also be personalized by the users.

Quality with no boundaries: The range of access networks and devices is evolving quickly, each with its own strengths. A main issue for prosumers is to be always on and having the best possible connection without the need to care about specific device form factors and technologies (multi-screening). The way forward is to make efficient use of multiple access technologies in a smart connectivity solution. Seamless mobility allows roaming and automatic handover between different access types without call disruptions. The best possible connection is selected automatically, for example DSL at home, WiFi at hotspots and HSPA on the move. No new manual log-ins are required and the user is always connected to the personal service suite. The capabilities of different broadband access technologies and device types are considered automatically. Different wireline and mobile access networks are combined, hiding all complexity from the user.

What customers want

13

Customer care
Automatic device configuration Proactive care Self care

Portfolio
Personalization and identity management Rich communication Mash ups and contextual services

Cost and billing

Personalization Convergence of post- and prepaid Transparency

Quality
Smart Connectivity Covering whitespots Increase battery lifetime Policy enforcement and control

Personal data protected by trusted gatekeeper

Figure 9. Simplifying customers life in control of complexity.

More understandable cost and billing: The key here is to provide more personalized price structures which are more appealing and more understandable for the customer. This implies a customer specific top up management and more flexible payment methods. For example, postpaid and prepaid are not customer types, they are just different payment methods that can easily be combined. An example would be combining a postpaid tariff for voice with a prepaid tariff for broadband to try out the new service. Another option to stimulate the take up of new services is to share data volume allowances through multiple devices.

Targeted customer care: Automation is key. With the rise in device complexity, more applications and configuration options and with customers changing their devices more often and using purchasing channels outside the CSPs control, the workload on call centers is increasing rapidly, often resulting in poor customer service quality. Easier service discovery, subscription and use improve the customer experience. Autoprovisioning is a key advantage since it supports service promotions focused on specific devices and makes the service easy to use by removing the need for the customer to set up the device correctly. Automating the service fulfillment process helps to ensure that the customer gets the

service within the agreed time frame, improving the customer experience by eliminating unnecessary delays in service access. In addition, self-serviceprovisioning supports service subscriptions that can be modified on-demand, such as a bandwidth increase in a broadband service, or ordering a movie or a TV channel. The consumer segment in particular will appreciate not having to read long lectures on how to set up services. Figure 9 Beyond pure functionality, CSPs will want to create emotional touchpoints with, for example, the right look and feel of the device to ensure the stickiness of the service: to make users feel more self-confident, to achieve more in life and to be in control by having the entire Internet on the mobile phone.

14

What customers want

Getting more insights about customers no longer the big unknown

Optimizing the customer centricity of offerings requires a detailed insight into each customers behavior and preferences. The goal is the mass individualization of the offerings ranging from the service provisioning to the customer care as if they are designed for each customer individually. Therefore, customer centric CSPs liberate their customer information from data silos and bring them together into a unified customer view, where it can be accessed by all systems and different organizational units.24)

Business transformation the CSP in control of complexity

Telecom operators were all created to build, manage and maintain nationwide telecommunication networks. That business model served well in the early stages of markets where customer expectations were centered around the basic connectivity, i.e. operators differentiated through network coverage, quality & capacity. The business model was thus based on a single product delivery model where operators tried to maximize their in house assets & capabilities: the traditional walled garden business model. As the markets evolve and saturate and new, ever more intelligent terminals enter the market, customers have started to demand more. The business model is transforming into a multi-product service model where the key question for the CSP is what kind of role they can assume as a service provider, how to create competitive value networks and thus, how to transform their business.

The vertically integrated end-to-end paradigm of defining all components of a service in advance and implementing the entire service internally, can no longer keep pace with the speed of todays Internet players. In such a highly fragmented market, the key is to use an efficient, modular application development and implementation method, where third party Application Service Providers can be integrated easily. This means that business transformation is a necessity for operators who want to be able to respond to changing customer requirements and market dynamics. The only solution to survival is to pool resources with other contributors, creating viable business and provisioning architectures within their business ecosystems. This method combines the best of multiple service hubs to create the combination of strengths and abilities desired by their target customers.

24) Nokia Siemens Networks, End-user insights whitepaper, 2008

What customers want

15

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