Do we need a wireless carrier e-commerce revolution to kickstart the mobile Value Added Services market?

Carriers’ online service purchasing mechanisms are apparently not as advanced as consumers might think. OSS and BSS industry sources are suggesting that as few as 10 to 15 percent of wireless carriers worldwide have an end-to-end e-commerce solution as part of their web presence. That is to say, an online storefront where the end user can purchase their mobile phone plus their voice, messaging and Internet tariff plans; and complete the transaction electronically without the need for any manual processes or further human interaction.

Basic Expectations

The modern world of online shopping for physical goods and digital content, as pioneered by companies like Amazon.com, has set a precedent for consumer expectations in terms of what constitutes an acceptable e-commerce experience. It is not sufficient for a consumer to go through an online form-filling process only to then be instructed to call a call centre representative in order to complete the transaction, for example.

Nor would it be considered adequate by consumers for a company’s e-commerce portal to be an html facade for what is actually a manual ordering process. With the user completing an online web-form, so that their information can be forwarded to a company employee who would then manually enter the payment data into the appropriate billing systems, in order to actually enable the transaction.

In both of these examples there is no electronic integration between the customer-facing e-commerce front end and the billing system back end. Yet billing solution vendors claim that many wireless carriers are currently relying on exactly these sorts of methods to enable the online sale of their phones and services. The minority of carriers that do possess end-to-end e-commerce systems having commissioned the creation of semi-proprietary bespoke solutions.

Online sales are becoming more important for carriers

Something we can be sure of is that in today’s world an unsatisfactory online purchasing experience will more often than not reflect very badly on a company in the eyes of the consumer. If a company cannot make its online presence work correctly, then no matter how big that company is they will be considered as fundamentally deficient. In this respect the internet can be a very levelling environment, where physically small companies can leverage their web programming skills to make a more powerful impression on consumers than companies that are much larger.

It is hard to independently verify the above claims about wireless carriers, as only the vendors providing them with their e-commerce and billing solutions have the necessary level of behind-the-scenes visibility. But if it is true, then carriers have certainly kept quiet about their lack of e-commerce sophistication. Some regions are apparently more advanced than others though, North America being reported as an exception. AT&T in the USA have purportedly had a fully integrated e-commerce solution in place since 2005 and are now processing up to five million online transactions a month, generated by both new and existing members of their wireless subscriber base.

Also, in general E-commerce transactions for the sale wireless carriers’ services are increasing in number, despite being less well catered for than other online products. But according to OSS and BSS solutions provider Amdocs within Western Europe only 25% of new subscriber acquisitions are currently facilitated online, the bulk of those transactions actually being for prepaid services; where it is just the handset that is being bought from carriers and not even the pre-paid top ups. Most contract subscriptions and prepaid top ups are still purchased over the counter.

A barrier to the sale of Value Added Services?

So, with so many contract service subscriptions being facilitated through franchises and high street stores it makes sense to ask whether it is any real surprise that the vast majority of all non-voice service revenues still come from messaging and Internet access, rather than from Value Added Services. As messaging and Internet access are the two most fundamental non-voice services, both of which will usually be combined with voice minutes to form a bundled tariff proposition for subscribers at the point of sale.

Arguably, more powerful e-commerce solutions could prove crucial for enabling the purchase of supplemental Value Added Services, in addition to handsets and basic cellular connectivity. As such systems could act as an aftermarket mechanism to allow consumers to be ‘up-sold’ Value Added Services following their initial purchase of a handset and tariff plan. After all, most consumers cannot be expected to know precisely what they want from their mobile phone service right from the start and, more often than not, will err on the side of caution when in-store so will not sign up to anything that they cannot be certain of making sufficient use of to justify paying for.

Consequently consumers ideally need on-demand access to optional Value Added Services, that either weren’t available when they took out their basic tariff plan, or which they didn’t realise that they wanted/needed. Having now had the time to properly consider their requirements, or indeed simply having found that they have evolving requirements over time. The best interface to allow them to do so being through an online e-commerce portal where they can manage the details of their mobile phone account.

This also means that ideally carriers need a sufficiently flexible e-commerce and billing solution to allow consumers to take on Value Added Service subscriptions with terms that are out of sync with their existing voice, messaging and Internet plans. This might mean that carriers also need to be able to bill for Value Added Services on a month by month basis, with users being able to turn on or off subscriptions to those services at will.

Vital for consumer empowerment and the monetisation of data

The knowledge that one is committed to paying for a service for a long term and cannot stop it at will will often prevent users from risking signing up to it in the first place. But knowing that they can control their supplemental subscription costs from month to month will give them the peace of mind necessary to make them less likely to cancel a service once they are signed up to it. It is actually quite hard to see how carriers can successfully push subscription based Value Added Services without an intelligent, consumer-empowering e-commerce system.

Furthermore, a system such as this is also likely to be necessary in order for carriers to offer the user-controllable Quality of Service and content-specific billing options, that are thought of by some as being crucial for effectively monetising the rapidly-increasing consumption of IP data over cellular networks. Wherein consumers will initially purchase ‘vanilla’ Mobile Internet and even Mobile Broadband access plans, that are not constrained by capacity allowances but by speed and content access-based restrictions.

Over time consumers will then buy into premium service plan add-ons, should they wish to have faster throughput rates, or be allowed access to certain types of bandwidth draining content like video. These bandwidth-monetising add-ons being the sort of service options that consumer are only likely to realise that they want as time goes by, as and when they discover they have the need for them. They are not the sort of items that consumers are likely to want to commit to paying for upfront.

In summary, carrier pricing strategies will certainly be crucial in deciding the future of the mobile Value Added Services market. But so might be the provision of an e-commerce and billing system, that is flexible enough to allow consumers to take control and to make informed decisions about spending more with their wireless service providers, as and when their basic service usage grows and as their needs gradually evolve. For, as a way to research and make considered decisions about what to buy and when, the Internet has become one of the most powerful weapons in the modern consumer’s purchasing arsenal.

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