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  • Creating a Winning Customer Care Operating Model

    Creating a Winning Customer Care Operating Model

    Optimizing your customer care operating model can not only reduce costs but also improve the customer experience.

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    For mobile communications operators, delivering high-level customer care is a major success factor in competitive markets. Developing the right model can cut costs and increase customer loyalty.

    Optimizing customer care spending not only brings impressive savings—as much as $100 million saved by reducing the number of suppliers and call centers capturing rate arbitrage opportunities, keep pricing in line with the market, and improving customer segmentation—but it can also deliver a better customer experience. A more effective customer care model is a clear path to improving customer loyalty.

    The benefits are impressive, but it’s no easy task—it will only happen if internal and external care providers can maintain or improve the quality of service as costs decrease. We see four actions for getting the most out of your customer-care operating model.

  • Wrestling the Subsidy Challenge in Telecom

    Wrestling the Subsidy Challenge in Telecom

    For telecom operators struggling in mature markets, a well-designed, well-executed discount installment billing program is the key to unlocking growth.

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    For telecom operators chasing growth in mature markets, discount installment billing is a way to reduce subsidy budgets, expand the customer base, reduce churn, increase sales and, importantly, increase earnings.

    For more than a decade now in mature wireless markets around the globe, the subsidy model has led the way to growth. Wireless operators subsidized their customers’ purchase of sophisticated new smartphones in exchange for long-term service contracts—and this strategy has both attracted new subscribers and enticed them to upgrade their service plans to include data packages. It encouraged fast adoption of the mobile lifestyle, and drove operators’ revenue growth.

    But today the subsidy model faces challenges. A mature market—such as the United States, Europe, Japan, or Australia—faces high penetration rates, which means that operators face flattening revenues from existing subscribers, which in turn creates pressure to increase revenues by attracting new customers. The result: Subsidy budgets have grown as operators are forced to increase subsidies and swallow rising wholesale prices of iconic devices. These high sales acquisition costs are dragging down earnings.

    How can operators lower costs to improve earnings without sacrificing revenues? Two alternate models are handset financing and discount installment billing. By financing rather than subsidizing handsets, operators could not only grow but also reduce the subscriber acquisition costs associated with growth. However, the problem with the financing model is that customers don’t see it as a good deal. Thus to successfully move away from subsidies, operators must offer a service plan discount. If successfully executed, discount installment billing is a potentially game-changing strategy. This paper explains the new route to growth. 

  • Rebooting Europe's High-Tech Industry

    Rebooting Europe's High-Tech Industry

    A vibrant high-tech sector can boost Europe's economy, but the right measures must be in place. Learn about 10 concrete steps that EU institutions, governments, industry associations, and companies can take to restore the vitality of Europe’s ICT industry.

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    Europe’s global competitiveness depends on a vibrant high-tech sector. Technology plays a crucial role for nearly every industry, particularly as machines and products get smarter and intelligent networks that coordinate the efficient use of resources spread rapidly. A healthy high-tech sector is an engine for innovation that can give European companies a leg up in a highly competitive environment.

    Yet, as our research over the past few years has demonstrated, Europe’s high-tech industry is declining. Even as the European Commission has officially recognized technology’s importance to Europe’s future growth, competitiveness, and mastery of upcoming social challenges, policy makers’ efforts have not done enough to foster a healthy high-tech sector.

    No matter how you slice the global ICT industry, Europe’s representation is low, even as the continent accounts for one-quarter of the industry’s global sales. Only nine of the top 100 ICT companies worldwide have headquarters in Europe, a number that has dwindled in recent years in the wake of both M&A and faster growth by Asian and U.S. companies. Europe’s brightest spots are in business-to-business (B2B) and in some smaller sectors. Although these companies have carved out niches and fight hard to sustain them, they often lack the resources and scale to expand their scope and become top-100 high-tech firms. Summed up, Europe has few large-scale ICT companies big enough to act as consolidators in each industry segment’s endgame, leaving the others vulnerable to buyouts by larger rivals from other regions.

    We have compiled 10 concrete steps that EU institutions, national governments, industry associations, and individual companies, building off of existing programs, can take to restore the vitality of Europe’s ICT industry. The steps are clustered into three areas:

    1. Enable. Put in place the enablers for a prosperous high-tech sector.
    2. Focus. Define and execute a focused strategy for overcoming the fragmentation inherent to Europe.
    3. Excel. Outperform global competition though innovation, partnerships, and decisive leadership.

    Why is Europe's high-tech industry loosing ground in the global competition?

  • Eight Ways Telcos Can Grow Revenues

    Eight Ways Telcos Can Grow Revenues

    By revamping their business-to-business offerings and overhauling their sales strategies to refocus on underserved markets, telecom operators can find higher profits, improved returns on investment, and increased volume growth.

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    By revamping their business-to-business offerings and overhauling their sales strategies to refocus on underserved markets, telecom operators can find higher profits, improved returns on investment, and increased volume growth.

    The B2B mobile telecom market is growing rapidly. Global demand for IT and mobile services will rise more than 4 percent between 2010 and 2015; in North America, the B2B market is growing at five times the rate of B2C. Within this growth spurt, the medium-sized company segment will grow twice as fast as small and large companies over the next five years.

    Eight best practices can help effectively and sustainably increase overall sales productivity and unlock significant revenue growth within the midsize market.

  • Rethinking Green: IT-Enabled Sustainable Products and Services

    Rethinking Green: IT-Enabled Sustainable Products and Services

    The next wave of green innovation uses digital technology to help consumers reduce their impact on the environment.

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    A smartphone app that monitors and controls a house's thermostat remotely. A recycling website that rewards people for making sustainable decisions. Social media sites that help users find carpools, reducing the number of cars on the road.

    These are just a few examples of the next wave of green innovations: advances that arm today's empowered consumers with information and technology they can use to manage their impact on the environment.

    We call this emerging industry segment Green 2.0—combining the traditional "green" industry with the Web 2.0 networking tools that have revolutionized business. Poised for significant growth, Green 2.0 is sparking new products, processes, companies, and high-value jobs along the way.

  • Boosting Telcos' Smartphone Sales in Developing Markets

    Boosting Telcos' Smartphone Sales in Developing Markets

    Smartphones could be a lucrative revenue source for telecom operators in developing markets.

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    Developing markets are a challenge for telecom operators when it comes to handsets and data plans. Roughly 95 percent of consumers use prepaid, no-contract phone plans on low-cost phones, which result in lower revenues per customer than contract plans. Telcos have traditionally avoided promoting and bundling high-end devices with their plans, largely due to fear of losing traction. Most of the efforts made to bring smartphones to developing markets have been sporadic and generally unsuccessful.

    But the market is shifting. Smartphones are proliferating rapidly in many emerging markets, with penetration expected to more than double between 2011 and 2015 in countries such as Brazil, Thailand, Indonesia, and India. Demand for data services and applications is also rising in emerging markets—particularly as operators roll out 3G speeds, and younger, more educated users flood the market. And handset makers are unveiling affordable mid-tier smartphones.

    As smartphone and data penetration rise, the next wave of growth will come with sales to low-income and rural customers. For example, in India, mobile data traffic is expected to explode, from seven megabytes per user in 2011 to 274 megabytes per user in 2016, by which time nearly one-quarter of all Indian Internet traffic will be mobile. Already, two-thirds of smartphone owners in India use their phones primarily for the Internet. Handset makers are now seeking out telecom operators that can provide access to low-income and rural customers.

    The question for telecom operators is not if or when to tap into these emerging markets—the time is now. The question is how to define coordinated smartphone retail and data strategies to capitalize on the opportunities. Done properly, our research has found that operators could increase smartphones’ share of phone sales from 2 percent today to as much as 10 percent by 2015.

  • Telecom Retail Stores: Solving the Ownership Puzzle

    Telecom Retail Stores: Solving the Ownership Puzzle

    As the role of telecom stores changes, prudent operators will review the split between owned and franchised stores.

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    The global telecom industry looks very different today than it did just a few years ago, thanks to two trends. On one hand, markets are maturing, with the developed ones experiencing high penetration of telecom services and the emerging ones seeing a flattening of the growth peak. On the other, digital is changing the way companies interact with their customers. Although the brick-and-mortar store is far from disappearing, its role is evolving: Stores can reinforce a brand and convey elements in ways that online channels cannot. 

    Branded stores are a key spending item for telecom operators, typically contributing 5 to 6 percent of total operating costs. But are they worth the expense? Can operators get more out of their branded stores? 

    In today’s environment, one of the best ways to improve store operations is to look more closely at the ownership mix, the split between owned and franchised stores—companies that revamp that mix can improve earnings by up to 2 percentage points per store. Defining the right ownership model is not a straightforward exercise, however. This paper discusses the five principles that come into play.

  • Yet Another Metamorphosis for GCC Telecom Operators

    Yet Another Metamorphosis for GCC Telecom Operators

    New industry trends are in the mix. How ready are telecom operators to adapt again?

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    After years of strong growth, Gulf Cooperation Council telecom operators have slowly adapted to the new realities of their maturing markets. Now another batch of new trends could have a profound impact on the industry, leaving GCC telecom groups to focus on redefining their service portfolios, improving the customer experience, and tapping into the opportunities that data-savvy consumers, businesses, and governments offer.

    While the challenges confronting operators are undoubtedly considerable, they have reason to be optimistic. With their consumer insights and proven ability to deliver breakthrough customer experiences, they are uniquely positioned to defend themselves and tap into the current trends. Those that act now and choose the right mix of defensive and offensive moves to limit revenue losses will have a good chance of remaining relevant and maintaining healthy growth and margins.

  • video The Mobile Economy 2013

    The Mobile Economy 2013

    Mark Page discusses
    growth and innovation in the global mobile industry in connection with the report on "The Mobile Economy 2013" by A.T. Kearney and GSMA.

  • Boosting telecom operators' eChannel performance in emerging markets

    Boosting telecom operators' eChannel performance in emerging markets

    For emerging markets, telecom operators can acquire ARPU subscribers at both lower cost-of-sales and cost-to-serve—learn how.

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  • Taxing Telecom: The Case for Reform

    Taxing Telecom: The Case for Reform

    Could overtaxing harm telecoman industry essential to economic growth and progress?

    Abstract | More | PDF

    Increasing taxes on mobile phones is a short-term solution at best and a potential long-term inhibitor of economic growth, according to A.T. Kearney’s latest analysis of mobile sector taxation in Europe.

    Indeed, the European Commission identifies telecommunications as a driver of economic progress. Countries that increase taxes and regulatory fees on this industry—as they have with tobacco and alcohol—not only discourage use of these products but also restrict investment and threaten growth in GDP, productivity, and jobs. This is as true for telecoms as it is for adjacent sectors such as banking and energy, where growth and innovation rank high on strategic agendas.

    Telecom operators in Europe already contribute significant tax revenue to European governments—on average, 24 percent of the average price per minute (APPM). These contributions include the value-added tax (VAT), social security tax, corporate tax, regulatory fees, and telecom sector-specific taxes. Despite Europe’s fiscal crisis and the understandable search for more sources of funding, most countries have resisted sector-specific taxation on the mobile industry—just five have increased taxes on the mobile industry.

    Our findings suggest that while the telecom industry should pay appropriate taxation and regulatory fees, a balance is needed between short-term revenue schemes and long-term strategies to support industry innovation and growth.

  • A Future Policy Framework for Growth

    A Future Policy Framework for Growth

    New revenues in Europe's telecom sector will only arrive with a significant commitment to deregulation to encourage success.

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    Telecommunications is one of Europe's most important economic sectors. Its largest companies have invested in building businesses in every continent. The services it provides—in particular the broadband and wireless infrastructure underpinning the Internet—are central to many other sectors of the economy and to the daily lives of almost every citizen. Its history of innovation and growth has been trumpeted as a major achievement of the European Single Market.

    Yet financial performance has lagged of late, because of an imbalance between those investing in the Internet and those benefiting from its impressive growth; an erosion of the industry's pricing structures as over-the-top (OTT) substitutes bypass existing tariff structures that charge for voice and messaging bypassed by over-the-top (OTT) substitutes; a fragmented sector that restricts innovation and increases costs; and an adverse climate of regulatory price cuts, restrictions on commercial strategy, and high taxation of essential spectrum. On the positive side, demand for the industry's core offering—communications—is growing dramatically. The adoption of new services—from videoconferencing to social media—is accelerating in all demographic segments, powered by rapid technology evolution in network infrastructure, services, and devices.

    Against this backdrop, A.T. Kearney has researched the health of the European industry, its plans and prospects to return to growth, and the contribution that the policy framework can make. We cooperated with the industry association ETNO, interviewing many of its members (and some operators that are not members) and discussing our findings with ETNO's leadership, but this report is an independent report that does not necessarily represent the views of ETNO or its members. In this report, we offer these findings as a contribution to an important debate on the future of the industry. This discussion is active in the policy arena: the European Commission has recently demonstrated an important realignment in its thinking on fibre investment and the related wholesale price regulation, and it will shortly review key market definitions and issue recommendations on non-discrimination and costing methodologies. All governments have been debating revisions to the treaty governing international communications via the International Telecommunications Union (ITU).

    Many industry players are considering how their businesses must evolve to remain competitive in the marketplace and attractive to investors. Each company will pursue its own strategy, and inevitably some will do so more successfully than others, but each of them, we believe, must address three broad strategic imperatives:

    1. Break out of the deflationary price spiral and move to pricing models that better reflect the value for the customer
    2. Raise the effectiveness of innovation and launch new services that can compete with global champions
    3. Move beyond the pursuit of incremental efficiency gains and pursue the path of consolidation and transformation common to maturing, capital-intensive industries

    For each of these, the policy framework in Europe must evolve—not to disappear nor to substitute the work of management and investors, but to eliminate roadblocks and create a level playing field.

  • Anyone Feel a Draft? The Rush for NFL Ad Dollars

    Anyone Feel a Draft? The Rush for NFL Ad Dollars, 25 April 2013 As the NFL draft kicks off tonight on ESPN and the NFL Network, advertisers must decide where to spend ad revenue and compete without further fragmenting the audience.


  • Netflix and the Culture of Creation

    Netflix and the Culture of Creation

    Forbes, 24 April 2013

    The Netflix release of "House of Cards" might change the way content is viewed and how revenue models are measured.


  • Setting Standards: A Strategy for Europe

    Setting Standards: A Strategy for Europe

    As emerging economies seek to influence global standards, Europe's role as a shaper becomes a priority.

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    Standards are the rules, guidelines, and definitions that describe repeatable ways of doing things. Standards are a crucial element in the EU's industrial strategy as Europe seeks to remain a shaper of global standards rather than a follower.

    The European Round Table of Industrialists worked with A.T. Kearney to study the issue of developing and implementing standards. We found six recommendations for establishing standards in European industry:

    • Establish performance targets to foster innovation. Standards spread collective knowledge, bringing together industry players in a working environment of sharing and collaboration. The use of standardized parts and business processes can reduce early investment costs and risks, and provide a platform from which industries can innovate.
    • Consult with experts. Involving technical and industrial experts, even when standards are initiated by governments, can help build standards on solid foundations.
    • Coordinate industry players. European standardization bodies can play a larger role in facilitating standard-setting along the value chain and across industries.
    • Balance speed and consensus. Standards must be put in place quickly in the face of accelerating technological change and market competition, and they must be built on a foundation of consensus to broadly address the requirements of all players.
    • Encourage a global approach. European companies that adopt and participate in setting global standards increase their market access to other countries.
    • Encourage SME participation. Despite their importance to the European economy, few small and medium-sized enterprises (SMEs) are actively involved in setting standards.

In the News

Read insights from A.T. Kearney consultants quoted in the media.

Global Leaders

Reuben Chaudhury
Reuben Chaudhury
Naveen Menon
Naveen Menon
Asia Pacific
Mark Page
Mark Page
Axel Freyberg
Axel Freyberg
Europe, Middle East, and Africa