The Biggest Challenge Facing Service Providers Like Telkomsel and Indosat

The average Indonesian spends more than 3 hours a day on their smartphones (tweet this)

Yet, service providers seem blind to this fact. Consider one of their most common strategies of giving away data for free to capture more users, then charge a premium for voice and SMS. This has created an environment where OTT players thrive. It’s an environment where everyone’s making money except for mobile operators. It’s a reverse casino, where the house always loses.

Can operators charge for data after giving it away for free?

While still playing an important role in people’s lives, voice and SMS are reserved for the most important, mission critical, often emotionally charged part of human interaction. For the more boring, everyday type of interaction, people use data-based services. And that’s the problem for operators: the money is in the mundane.

Some may argue that the reason data usage thrumps voice and SMS is because data is free, but this is a false argument. Indonesians have shown that they’re willing to pay for data. New players realize this and exploit this fact establish a beachhead in the market. Bolt, Indonesia’s first 4G LTE service was launched in November 14, 2013. Within 5 months, it grabbed 200,000 modem users. Mid 2014, Bolt launched a new product called Powerphone. Its a sub-$200 smartphone with dual SIM cards, one for internet via Bolt and the other for run-of-the-mill SIM card of your choice.

In other words, Bolt has taken away operator’s chance of making data revenue from Powerphone users. As soon as government regulations permit, how long would it be before the company flip the game completely and charge for data while giving away voice and SMS for free?

Mobile operators may not survive a switch in strategy, but they are running out of options and they’re running out of time.

Where should mobile operators focus their attention?

Mobile operators need to realize that the challenge they’re facing is, first and foremost, a marketing challenge. Consider the following:

Make use of leftover buffer time

Competition is still focused on urban areas, and it will take time before companies like Bolt can establish the infrastructure it needs to reach beyond major cities. The market is still wide open beyond Jakarta. Operators need to focus on “new upgraders”, those who are switching from feature phones to smartphones for the first time. This is where the war will be won.

Improve customer touchpoints

Relationships are not built by ad campaigns. Relationships are built by delivering on promises and actual conversations. In practice, these are usually treated as nuisances, the responsibility of the lowest ranked person in the organization. Ask yourself: When was the last time the CEO personally picked up a customer complaint call?

Relationships are built by delivering on promises and actual conversations (tweet this)

Strength in brand, not pipeline

Putting it bluntly, whether you’re a traditional service provider like Telkomsel or Indosat or you’re a new player like First Media’s Bolt, your customer experience most likely still sucks. For the new players, improving customer experience will be a question of infrastructure. For mobile operators, it’s a question of corporate culture, customer service and user interaction. It’s a race between building signal towers and building customer relationships, between hard assets and brands. It’s two different races with the same finish line.

image courtesy Subway Smartphone

** Find MORE useful trends **

If you found this post useful, try this:

• Follow my LinkedIn account
• Follow my company's LinkedIn account (my colleagues post some pretty insightful posts)
• Check out what's new at empathic.MARKETING