Cost of Supporting Mobile Broadband is Eroding Subscriber Profitability
Published on: 27th Apr 2009
Note -- this news article is more than a year old.
Mobile broadband services are more expensive to support than any other wireless service and are endangering subscriber profitability for many mobile network operators concludes a new study from WDSGlobal. The study found that the cost to support mobile broadband products and services is up to 200% greater than the cost to support traditional wireless products such as mobile phones. This means that despite revenue uplift from increased data usage, actual subscriber profitability often remains unchanged and sometimes even worsens.
The area of greatest concern came from USB and PC Card modems. These are sold to allow subscribers access to a mobile operator's 3G HSPA or EV-DO mobile broadband services from a laptop or netbook. The average duration of a technical support call for such products is 28 minutes. By comparison, a technical support call for a mobile phone averages just less than 10 minutes.
The findings come from analysis of more than half a million 'technical' support enquiries. More than 600 wireless devices were represented in the study, which spanned a six-month period between September 2008 and February 2009. Of the bottom 20 mobile devices ranked by Average Handle Time (the duration of a support call), 13 were USB or PC Card modems.
The problem, WDSGlobal suggests, is not always with the technology itself but the necessity for these products to be installed alongside third party hardware and software outside of a mobile operator's control.
"Traditional wireless products are largely in the control of the network operator; it's their SIM card, they sold the handset and it's attached to their network. Mobile broadband introduces the need to manage a wireless product on a third-party device such as a laptop. You have to contend with hardware performance and conflicts, driver incompatibility and buggy software. Diagnosis and fault resolution therefore becomes more complex, negatively impacting support times. Add to this the fact that many products have not been adequately tested prior to launch, and the result is an expensive burden on existing support infrastructures," explains David Ffoulkes-Jones, CEO of WDSGlobal.
The study also cites 'aggressive' connection management software (the software bundled with the modem) as a key cause of user frustration. During several test cases, installation software looked to make registry edits deep within the PC's operating system. Most popular anti-virus applications immediately blocked the installation, classifying it as a security threat. In other cases, connection management software looked to hijack control of all network connections, overwriting user's existing configurations and impeding WiFi access.
The cost of handling customer care and support calls has an immediate bearing on subscriber profitability because it forms part of the cost of maintaining a subscriber on a network. Therefore, it's imperative for mobile network operators to better manage the process of testing, launching and supporting mobile broadband services concludes WDSGlobal.
"This problem is not unique; new products and services are introduced to generate greater ARPU (average revenue per user). However, the increased complexity of these services means that the cost to support them often increases, impacting subscriber profitability," adds Ffoulkes-Jones. "There are enormous opportunities for mobile broadband in 2009. However mobile network operators must be able to deliver new products and services to market profitably and in a way that meets their end-users' expectations for service and quality. Many mobile broadband services are marketed as plug and play. However, as a company that provides technical support services to the mobile industry, we know that this isn't always the case."
A full copy of the study, including average handle times for most major modem manufacturers, can be downloaded at http://www.wdsglobal.com/mobile-broadband (registration required).