What Do Customers Want?
By Carlo Longino, Thu Jan 20 23:45:00 GMT 2005

A new study says US and European mobile subscribers are most interested in good coverage, low prices and simple tariffs -- exactly the types of things on which MVNOs and discount operators focus. So why aren't they more popular?

Capgemini says that advanced services are at the bottom of users' wish lists, trumped by price, plan and coverage. Even having "unique handset features" falls in the lower half of wishes, and the top customer frustrations -- not surprisingly -- are with price, coverage, battery life and poor customer support. Users would be willing to accept having no advanced services, more than anything else, if it got them a discount, followed by only getting online bills and then getting refurbished handsets instead of new ones.

All this sounds like good news for discount operators, which generally eschew data services, offer cheap, simple rates and sometimes even forgo handsets completely. So if they're offering exactly what people want, how can full-service operators survive? It may simply be a case of people saying they want one thing, but not really wanting it, or it may be that switching to a discount operator is too difficult.

But the takeaway here for full-service carriers shouldn't be that everything is fine, since the subscriber figures for discount operators don't come near their own -- it should be that there are a lot of things those operators are doing right. Look at Denmark as an example: discount operators have turned the market there upside down, forcing the two dominant carriers to purchase the discounters as well as drastically lower their prices. The tale there emphasizes some of the inefficiencies discount operators can wring out of the market, and pass their lower costs onto consumers.

But perhaps the reality of the situation is that people aren't as down on advanced services as they think they are. It's more likely they just don't find anything on the market now all that compelling. This doesn't mean operators should give up, it means they need to be ready to support popular applications and services, assuming they can create an ecosystem that engenders their emergence. But it also doesn't mean full-service carriers can sit idly by, waiting for that moment without changing the way they do business. There's a lot that can be learned from MVNOs and discount operators.