Despite, wireless operator profits have more than doubled in the last 10 years we see five mega trends that are changing the game for wireless service providers and will require them to rethink their strategic priorities:

1. Explosive internet growth of internet fueled by the insatiable supply of content, applications, and services that has unleashed consumer demand for more like never before
2. Saturated mobile market, reaching penetration level above 100% in most markets.
3. OTT players going mobile and trying to marginalize operator’s role in the value chain.
4. Difficulties to different from other mobile operators besides price
5. Internet exponential growth not compensating the decline on voice revenues due to price erosion and substitution to other OTT communications tools.

Most operators have on their top agenda to adapt to this new changing market or become unprofitable bit pipes.

A glimpse on how bad this situation could turn up for carriers is shown in a recent research done by OVUM (October 2012). According to this report operators are expected to lose $23bn in SMS revenue by the end of 2012 as Smartphone users shift to free messaging applications. Ovum forecast the cumulative losses would reach $54bn by the end of 2016 as the traditional SMS gives way to Internet-based platforms such as WhatsApp.

Towards a Smartpipe Operators

During the last few years operators have been debating between three strategic alternatives:

1. Full Service and content provider

Telco as a one stop shop for consumers including connectivity for voice and data services and a full range of applications. Initially operators tried to create “walled gardens” and leverage fully in their own mobile portals for people to access music, videos and applications. Despite, some initial traction the model didn’t work as mobile internet unleashed a number of disruptive ” over the top” players like Google or Apple who managed to create more attractive model to develop innovation around internet. A good example is Google Play Store or Apple Appstore with Billions of applications downloaded by users.

2. BitPipe

Some operators have decided to focus only on provide plain connectivity. No frills value proposition, where minute of voice and Gigabytes are offered at a reasonable good price. Despite this being a traditional cost leader strategy, it could only be applied when achieving a enormous scale and efficiency. Nevertheless, as data growth is exponential it will be hard for these players to monetize their assets if they marginalize their role to a efficient bitpipe provider only and let other market players to take other parts of the value chain.

3. Smartpipe

A more relevant strategy for operators to develop competitive advantage is to leverage on their assets to create differentiation, specially on Data services. Moreover, Mobile data services will account for more than 50% of revenues of Telco revenues by 2015.

As a Smartpipe service provider operators will leverage on three key building blocks:

• Dynamic Traffic management: Traffic optimization/prioritization, data policy management and smart data packaging

• Customer experience optimization: Enhancing customer experience journeys like self-care, security, bill shock prevention, self care support and behavior base notifications

• Two sided business model enablement: Enable monetization of OTT players and develop new revenue streams expanding to other business areas.

 Next generation capabilities for Smartpipe operators

When looking specifically at what at the key skills wireless service providers  need to develop for data services, we foresee six main capabilities:

1. Advanced traffic and user management policies for mobile data
2. Prioritization of traffic and quality of service
3. Device based quality of service
4. Application/Content based quality of service
5. On demand quality of service
6. Location based quality of service

If operators are able to master these capabilities they will be able to create and offer more advanced mobile data packages and promotions. Enhancing value propositions to consumers will help them to differentiate operators in the market but also monetize their assets.

Smartpipe capabilities support tailor made offerings to subscribers, for instance:

• Providing a premium data plan with higher speed and network priority for specific content like movies or sites like Youtube.
• Partner up with OTT players like Skype or Application stores to introduce direct operator billing; relevant for market with low penetration of credit cards
• “On the fly” speed and quality booster when subscriber need higher performance for specific applications like Video conferencing.
• Cross-selling and up-selling packages combining voice and data. For instance getting free access to service like Facebook when subscriber talk certain amount of voice minutes
• Try and buy data promotions for user to experience different mobile internet plans  a short period of time e.g. 30 minutes trial

 The importance of giving a consistent and simple user experience

None of these capabilities are useful unless wireless service providers  to put all the pieces together. This means giving subscribers control and enhanced user experience over their services. For instance, providing easy to use self service applications from where users can continuously check their data usage, refill their account, check latest promotions or adjust their current plan settings.

In a world dominated by smart devices users are demanding to have a stronger control over their experience and be in the driver seat.

Production and consumption value chain has changed forever

During the nineteen century, consumer revolution enabled that a vast number of individuals had the greater ability to purchase wider array of products and services than ever before. At that time political, social and cultural fear arose about consumer revolution because individuals now had more choice, and an increasing independence, which meant there was a loss of power for those who were classified as higher upon the social hierarchy. In order to cater for these new market demands, organizations structured value chains and shaped their management and culture towards a set of organized activities ranging from detecting market needs, Research and developing products, market those goods, selling and giving post sales support.

This model has worked quite efficiently for decades and it is in DNA of most senior executives, school of management teaching, and companies’ culture.

Nevertheless, two mega trends are disrupting this ways of working like never before:

a.  The emergence of a networked society

Ubiquity access to internet will allow everything to be connected anytime and anywhere. More than 50 Billion devices will be connected by 2020 interacting as a underlying societal infrastructure.

 b. Social Consumers

With more than 2 Billion users connected to at least one Social media channel, social networking is making us act and think collectively rather than as individual consumers. This creates a completely different balance between brands and consumers influence on products and services production and delivery.

The crowdsumer disruption in the value chain

Crowdsumers  are defined as : “Consumers who instead of acting as individual users of a product or service decide to act as part of a complex and unstructured network of consumers in order to influence and decide on what, who, when and how services and products are produced and consumed.”

 Some examples of this behavior

1. Investment

From Shareholders to Crowdfunders

TrendWatching.com rightfully defined that :”consumers are moving from passively consuming a product towards actually funding/investing, if not owning a stake, in the brands they buy from. However, these increasingly business-savvy audiences are often looking for both a financial and an emotional link, and therefore only brands that are open, friendly, honest, trusted, transparent, and somewhat ‘human’ will find themselves able to attract funds.” 

A company example is Kickstarter.com. As December 2012, they have raised more than 300 Million USD in more than 50.000 projects. Research firm Massolution estimates the crowdfunding industry  will grow from $1.5 billion in 2011 to $2.8 billion in 2012.

2. R&D

From company based to the wisdom of the crowds

Using crowdsourcing to build virtual teams for specific research projects is becoming a common practice in many industries including pharmaceutical, biotechnology or technology related companies. For instance, LG, a leading brand of consumer electronics, also used the concept of crowdsourcing a few years ago. With the purpose of learning and realizing the potential anticipations of consumers, LG Electronics employed the services of crowdSPRING to start a mobile design contest. Their intention was to gather design concepts as to how mobile phones will be desired to look like in the near future.

3. Social support

The users on the driver seat

Before, if you were dissatisfied with a company’s service, you could decide stop buying from them and complaint via an email o letter. Probably you will also tell your close friends and family about the bad experience. Today with social media only one dissatisfied Facebook post that connects with like-minded parties.

This could reach unforeseen consequences and congregate thousands of angry consumers . A recent  Pew report shows that more than 35% of social media users will post or comments about the brands they use.

Net promoter score is a good way to understand customer advocacy by asking a simple question: ” Would you recommend this company to friends or family ? “. The simplicity of this question makes it a useful tool to understand customer experience. Despite Net promoter score (NPS),  not being a tool designed for running benchmark across industries it is very insightful to analyze who bad mobile service providers score compared to other established industries.

The first study comes from Temkin Group and covered 5000 US consumers across 19 industries including  insurance, banks, airlines and others. Wireless service providers NPS average is among lowest across all industries. Also , Wireless is the industry with the lowest deviation between good and bad results, therefore consumers where consistent about all operators performing poorly. The best NPS wireless service provider only achieve 35% , which is the second lowest high score among all industries.

Things don’t get any better if you analyze Forester 2012 Customer experience Index. In this year report that covers 7,600 US consumers about their interactions with 160 brands across 13 industries, wireless Telco also scored close to the bottom of the chart.

In forester report, Mobile service provider’s customer experience is rate by consumers as poor, with one of the lowest levels among their peers. Despite years of investment in customer experience management, mobile service providers appear no closer to achieving improved customer satisfaction results than before.

Two fundamental problems

In my perspective there are two fundamental problems for operator to improve their customer experience. In nature they are fairly simple, but it requires a complete mindset transformation from Telco perspective:

1. Mobile service providers need to start comparing with best cases across other industries. 

In my experience, most operators are strongly fixated with comparing their service quality with other mobile service providers. Telco benchmark is always at the top of CTOs or CMOs agenda. Since, Telco industry has been historically an industry providing poor to average customer experience, these comparison are useless in most of the cases. Moreover, consumers don’t compare the customer experience they get from Mobile service providers with other Telcos but with other service companies they interact on a daily basis. Their emotions and perceptions about customer experience are influenced by the long range of service companies they use everyday. In fact, more than 50% of customers have only use one service provider in their whole life.

2. Metrics are wrong, Mobile service providers need customer centric measurements

Part of the reason for the discrepancies between telecom companies and other industries in the
rankings may lie in the other key metrics for operators, such as how much companies are investing in
customers, cash cost per user (CCPU) and how users are responding, such as voting with their feet in
terms of churn rate.

Mobile operators still have one very simple reason to invest in customer experience

In all the years of Forester industry ranking no telecom company has achieved to the top “Excellent” ranking. Even do these type of metrics never gets shareholders’ attention is quite amazing to see what they can do for company overall financial performance.

According to Forester  In 2012 Amazon achieved a ranking of 86 out of 100, third overall place among 160 companies. The Amazon story is a clear case of customer experience equals improved business;  The company’s sales were up 50% in 2011 despite the stagnant economy. Since 2009, the company’s stock valuation has produced an almost 240% rate of return and a 130% rate of return over the last decade.

Interestingly,  Amazon’s secret in CEM was to be the best experience on self-care. Customers were empowered to manage their own experience and not to be controlled.

According to  Amazon CEO Jeff Bezos,: “The most radical and transformative inventions are often those that empower others to unleash their creativity — to pursue their dreams … I am emphasizing the self-service nature of these platforms because it’s important for a reason I think is somewhat non-obvious. Even well-meaning gatekeepers slow innovation.”

Maybe the next big step for wireless service providers will come from giving consumer the control of their experience instead of trying to control their journey.

New business models have emerged with the internet, and many of them are part of what is referred to as the personal information economy. An important aspect of this is that consumers can give away personal information in return for services.

How will consumers react to the growing trend of sharing information online, where many companies try to monetize this information?

With the fast pacing growth of the internet, more and more start ups have moved away from being paid directly in cash for services and product, to new and innovative ways of charging and generating revenues.

Companies like Google pioneered the model of giving you free services like search, email or others in exchange of personal data that can be sold to advertisers or brands.
Interestingly, this business model has grown exponentially in that last few years. With the rise of Social networking and mobile applications, where more than 90% of these companies revenues come from selling your personal information to advertisers.

In theory the model is a win-win situation and in the early days of Google we didn’t share much over internet, but nowadays with the advent of Social media, video and multimedia our lives are complete digital and open to internet companies.

So new questions about privacy, business models and where to draw the line for consumers are waiting for answers

The Value of privacy is big, internet advertising a global $70 billion business that feed services like Google, Yahoo and Facebook. This business is built on data about you, and ads that track and target your behavior on internet in more advanced but more unclear ways.

Consumers care about sharing their personal data

A recent study shows that around 70% of consumers are willing to share their personal information in exchange free services. This research shows that consumers are willing to trade personal data for something they perceive as having value, such as discounts or freebies.

But in the other hand the same research shows most consumers are naive about the use of their personal information. When consumers asked if they are willing to share their private data with companies the majority is positive. Nevertheless, we you explain these consumers how their data is currently being used and how it will likely be used in the future, most change their mind and say no.

The dilemma between getting services for free and giving away personal data

When researchers ask if consumers agree on search engines to track and analyze what they do on internet, 65% of them say no, but still you have 5.2 Billion searches done per day around the world. Clearly we are going through at tough dilemma.

The big issues are most consumers don’t understand companies are accessing multiple databases to assemble consumer profiles. They are surprised when they find out how extensive the information companies have – and how they are using this data to target them.

But something is changing, as consumers become more educated on privacy and data issues they become less willing to share all their data and more likely to consider the use of their most persona data as offensive.

The value of your personal data

Since Google adwords, probably one of the biggest breakthrough on how to link advertisers and personal information the industry has found many different ways to profit from user information.
If we analyze the average revenue per user that internet companies make per user is quite amazing. In average, Google makes around 24USD revenues per user, Yahoo makes around 8USD, Facebook around 4SD per user.

The main reason for this huge difference is that for getting higher revenue per user your advertising need to be more personalized and targeted and that means to use more personal data from your consumers.

The main risks I see in this model is that it is hard for users to draw the line. Around 50% of users don’t have a clear understanding on how to increase their privacy settings on Facebook for instance. And of course, if a company is force to increase their revenues aggressively it will be hard to keep equilibrium on how much they should use of your information.

How much internet companies know about us

Technically internet companies don’t know up to the single subscriber level as they store and correlate trends and behaviors based on segments or group of users. Nevertheless, as we use more and more internet companies can know what you watch on TV online, where you are, what you search, where do you surf on internet, what do you like, who are your friends, who is your closest friend, etc. It is quite overwhelming about of data stored by these companies.

Even do most internet companies established some clear bedrock principles to protect single users in mainly cases this principles are not clear for anyone and many times they are not disclosed as it will also show how this companies uses the information for more targeted advertising.

What is the main advice for consumers?

We value our own privacy so little. Probably because we have we have been told so. Internet companies change their privacy policies very often and users don’t seems to care
If you use Google or Facebook you may have noticed a little banner popping up at the top of the page announcing: “We’re changing our privacy policy and terms.” It gives you the choice to “Learn More” or, another option, we see that majority of users will “Close banner”

And this is the problem, since we don’t see any short term risk we just give it away our data. In that sense my main advice to users it that they need to understand the value of their own data and also be aware that they need to be in control of what they share and what they want to give away to companies.

Do people really care about privacy?

We still care: 88% of people mention that their personal information data is important. What is changing is the definition of what is privacy in this digital society.
This is not something new; every society has their own rules for defining what privacy and what can be shared. Probably we are at the tipping point where privacy will be redefined.

The second point is that now we are aware that our personal data can be used for financial gains. I foresee more and more companies helping us to broker our data as a vault and then re-sell it establish the levels of privacy that we want to share. Some economist estimates that the value of our personal data on internet can be up to 5000 USD.

The third point is that we are going to see more companies helping us to manage our reputation online. For instance there is a start up called reputation.com that helps users to remove Misleading, inaccurate or negative links in their name/company search results that can adversely affect the impression you make when people ‘Google’ you and can materially impact you or your business.

 Main changes on how we spend time compared to 2004

In 2004, roughly 1 out of 10 people have access to internet. In emerging markets that figure was even smaller. During those years most of our time dedicated to entertainment was around linear TV. Even internet users used to spend only 5 hours per week on internet and more than 15 hours a week watching linear TV.

If we look the same figures today, there is a fundamental change. 4 out 10 people have access to internet and we spend 20 hours per week which is  a 400% growth. Actually we have surpassed the time we spend on internet compared to linear TV.

Social media is the areas with the highest growth

If we take internet, Social media is one of the activities where we spend more time. In fact 20% of the time spend on internet is related to Social media activities, around 7 hours per month only on facebook. If we compared it to 2006 this are 4 more hours only on that specific site. We are also spending a considerable amount of time in several other things: 1.5 hours on Pinterest, 21 minutes on Twitter, 19 minutes on LinkedIn, etc

Devices usage is also disrupted by the emergence of Smartphones and tables

In 2004 mobile phone penetration was below 50% and mobile devices with internet access were less than 20%. Today the situation is different. Data enabled mobile devices are around 70% of total devices and 20-30% of them are smartphones. In that sense, there is an important amount of time shifted to our mobile phones.

In average a user spend more than 6 hours a day with their Smartphone. This is more than 50% of the time we are awake.

A Clear next step will be to integrate these devices to our bodies, so we can use it all the time. Something we’ll start to see happening next year when things like augmented reality devices like Google glasses come to the market

Mobile phones are not used for than just voice calls or SMS

If I look at 2006, an average user would spend around 6 hours per month on phone calls, SMSs and emails. Today is less than 5 hours. Even do it is not a huge decrease; the interesting part is that we have increase the usage of other activities with our mobile phones. For instance we spend 6 hours on internet browsing per month, which is something that was less than a 1hour 6 years ago.

Internet usage has also change dramatically

In 2004 the main use of internet was for reading news and searching for information.

Today we see a more interactive and multimedia focus:

• Today, 20% of the time is related to social media
• 19% is for OTT communication like Skype, Whatsapp, IM
• 5% is spent on online shopping
• 20% is spent  on online TV
• 20% is spent on reading content.

We have also change the way we watch TV

Back into 2004 we used to focus on watching offline TV only. Today we combine this activity with multitasking with other devices. 88% of people use their smartphones or tables while they are watching TV

We also have reduced our time of watching offline TV to only 55 hours per month, but increased our time watching online TV from 6 hours to 23 hours in the last 6 years. In fact we already see more than 11% of consumers only watching TV via their mobile or laptops.

Nevertheless, we are watching more TV in total. When we add offline TV and online TV average usage has increase the use of 25%

Emerging trends on time spent on Technology

We are spending more and more time of mobile Applications, roughly two hours per day, Either playing games, shopping, checking social media feeds, etc. this is a significant step up from one year ago when we were averaging just 94 minutes per day in smartphone or tablet applications. That’s an increase of 35%. At the same time, we are spending a diminishing amount of time browsing the web.

Despite the enormous time spent on technologies we have increase the time spent with family and friends

It is interesting to see that the time spend with friends and family has increased. I believe that this effect could be related that now we are able to do things in a more efficient way and also we don’t need to be in the office to perform most of the tasks: Anytime anywhere office.

Also, Studies shows that social networking sites are making people more social by reuniting them with friends, organizing event or get together. In average we spend around 30 hours per week with our friend and families physically which is 30% increase from 2004.

Sources:

Ericsson Study

How we spend time infographics

It also seems that women tend to engage more in this behavior with a 66% compared to 58% of men.

Also, 25% of consumers use social networking like Twitter to comment and discuss what they are watching while they are watching it.

Main drivers for this consumer behavior

Is interesting to see that we have a need to socialize all aspects of our life, TV is not static anymore and as any event happening in our life we want to share it

The main drivers for this social TV behavior are:

1. Connecting with other viewers
2. Seeking for information
3. Wanting to analyze of discuss the content
4. Interacting or influencing the content

There are some few categories of TV programs that create a higher need for users to socialize. Comedy and reality TVs are the most socialized categories and secondly Sports and News.

Is also interesting to see that 71% of users have seen comments or discussions around their shows over social media and around 20% of users started to watch a TV show due to comments they found over social networking. Therefore it is works as a cycle.

Once they becomes TV Social we change our behaviors

We are becoming less of a couch potato. The use of another screen while watching TV, make audience more engaged with the content, but also gives them a way to escape from traditional ads on TV. For instance, around 60% of users will get busy with their smartphone while commercials. This is higher in younger population showing that we are becoming less patient with traditional advertising. 77% of people below 18 years old will use their smartphone during commercial breaks.

Twitter leads the way on Social TV

Twitter is the preponderant Social networking site for people to comment while they are watching a show. Around 70% of social TV users will use this media. Surprisingly Facebook is not the preferred platform for comments or discussions while watching TV as only 7% use this platform for expressing their view about what they are watching.

Proliferation of devices is the key enabler of Social TV

This multitasking behavior is enabled by the proliferation of new devices. Recent studies shows that 4 out 5 tablets owners for instance watch TV while using their tablet. In the case of Smartphone the figures are around 70%

But is not about Social media…Is about Multitasking

The behavior of multitasking and consuming media in several screens goes even beyond social media:

• 61% of users will send emails while watching a program
• 47% of them will access to Social networking site while watching
• 37% will search for information about the show while watching it
• 27% will look for product of service they saw in TV advertisement

And around 20% will look for coupons or discount related to the advertisement the watched on TV

Social networks are also influencing what we watch

Is amazing to see that your best friend to decide what to watch on TV is not your program guide anymore; is about your peers: 46% of people will decide what to watch on TV based on Social media recommendations

In that sense, Facebook is the preferred platform for finding recommendations and a key difference from Twitter which is the preferred platform for post comments about the show while watching

Is also interesting to notice that around 12% of viewers turned on the TV because something the read on Facebook. We are clearly moving to a networked way of watching TV today compared to the past

The future of TV?

Social media increases the value of linear and live TV content, but also on-demand TV has increased by almost 10%, and today about 60% of TV users say they are streaming or downloading movies and TV shows on a weekly basis. The usage of YouTube and viewing of other short video clips also continues to grow.

This also reflects what consumers want for their TV in the future:

• 77% wants to watch want they one when they want
• 61% Talk to their TV and related devices and tell them what to do
• 47% use tablets and Smartphone as a remote control on steroids
• 44% buy anything you see on the TV by pointing out with their device

Clearly we will see a complete new TV in the coming years where the boundaries between Social media, internet, devices and access anytime and anywhere will become one.

Sources:

Ericsson TV study

Social TV on the Rise Infographics

Nine mega trends being driven by consumers and the market forces are dramatically changing habits of Smartphone users in South East Asia.

Our research done in  several emerging markets showed that Smartphone marketplace has evolved faster than any analyst expected, not only in terms of uptake but also in the way people use their devices.

This change will have dramatic consequences on Operator’s competitive strategy and focus areas.

We conducted two months of research using a hybrid methodology: Traditional quantitative and qualitative consumer research combined with device probing (a small app installed on more than 200 volunteer’s Smartphone) to track their behavior real-time. This made the research quite interesting as we managed not only to capture what people say they do or feel; but also how they really use their devices.

Nine mega trends affecting South East Asia Smartphone consumers

1. The emergence of the Smartphonatics

The new main drivers for Telecommunications services are apps and internet access and not voice and SMS. Users want to get access to the society infrastructure via their phones. Android will dominate the OS market and handful of OTT communications app will replace traditional ways of communication like SMS and Voice

2. Android to dominate Emerging Asian markets

45% of all Smartphone users would choose an Android based phone during next purchase. Estimated Smartphone Android OS will account for 74% of total shipments by 2017 and price will be lower than 100 USD.

For Blackberry, we expect a “dual phone” transition; moving from their Blackberry to another brand but keeping the Blackberry for a while due to the stickiness of BB IM and mail.

3. The mobile App frenzy

App is the main reason for acquiring a Smartphone and more than 40% of the apps used is related to OTT communications. For instance, Indonesian are spending more than 22 Minutes per day on apps and in average they have 20 apps installed. This number is growing fast, creating a long tail of applications for various purposes

4. A new user pattern

As soon consumers get a Smartphone they will dramatically increase the use of IM and Social networking. Also, they will use WiFi networks almost the same number of times as their mobile network (e.g. 3G).

Also, mobile data usage creates new challenges for Smartphone users like moving battery lifetime as their top one frustration.

5. OTT communication shift

77% of smartphone users are using OTT applications on their devices. On Iphone , 40% users already use video streaming on a regular basis. This behavior has displaced customer focus from traditional voice/sms to advanced OTT applications

6. The “Multidevice” mobile user

In average 39% of Smartphone users have a second Sim card and 31% have a secondary phone. In most cases, the primary phone is used for performing hygiene tasks like voice, SMS and the second phone is use as the “data” phone for more advanced tasks. On Blackberry, we see a users switching their usage to a second phone and leave BB relegated only for BB IM use.

7. Increasing security concerns

The information stored on Smartphone is twenty times more than feature phones and includes more private information like access to bank accounts, emails, etc. 37% don’t know how to protect this information and avoid abuse or fraud from third parties

8. Virtual channel preferences

Android and Iphone users prefer to get support via self-service or virtual channels from their Telco provider. App based support is becoming a key element as users got used to this support from other service companies like banks. Also, they started to believe in Social Media is the best channel to get support.

9. Blackberry fading away

Blackberry stickiness remains strong due to IM and email, nevertheless this appeal is starting to fade away due to Whatsapp taking over people’s contact list. BB user’s loyalty is mainly due to the contact list on their BB messenger, but this is rapidly changing. We foresee a transition period from BB becoming the secondary phone until OTT tools like Whatsapp take over their contact list. Even in countries likeIndonesiaandMalaysia, only 10% of BB users claim to buy the same brand in their next phone purchase.

One of my areas of research has been to understand the relationship between customer satisfaction and advocacy. In short, to compare how satisfied are subscribers with their service providers versus their willingness to recommend their brand to friends and family.

On the surface customers seems to be ‘more or less” satisfied but….

 When it comes to satisfaction South East Asia markets shows a fairly high level of customer satisfaction. In most market, around 50% of their subscribers claim to be satisfied with the service they receive. Only 20% of this consumers state to be very dissatisfied.

But, when we asked if they were willing to recommend their service provider to friends or family (Net promoter score index), only 8% were ranked as promoters, or consumers who were highly willing to promote their Telco brand. Actually, 58% of subscribers were qualified as detractors or people with little advocacy to their brand.

The results were brutal but consistent: in all markets we’ve analyze customer satisfaction was average but the amount of detractors was huge.

I presented the results to four of the Mobile service providers that were part of the study  and all of them were quite shocked. For the last years, most of them were focused on increasing the satisfaction of their customers without getting much impact on their company churn or loyalty. Probably this research was showing the underlying problem in their strategy: Customer satisfaction is not enough to increase loyalty.

This is also aligned with the churn rates we see in all the markets that were analyzed: 50% to 80% per year!

Thirty-five percent of Android and iPhone users use apps such as Facebook on their smartphones before even getting out of bed, shows new one of our latest research about consumer mobile app behavior. This is yet another sign that the app culture is growing in importance and turning into a new way of living.Main changes on consumers when it comes to interacting with Smartphone applications 

Constant connection to the cloud is weaving itself ever deeper into the daily routines of consumers. They are increasingly interacting with their smartphones and the internet before they even get out of bed.

To date , about 35% of Smartphone users interact with non-voice applications before getting out of bed. The most common activity here is checking Facebook. In fact, 20% of social networking users log in while their heads are still on the pillow.

But this is not all, During their morning commutes, 29% use Google Maps and other smartphone navigation apps, while 28% listen to music. As mobile technology continues to evolve, a majority of smartphone users are fully integrating their devices into every aspect of their daily lives.

Smartphone explosion has affected end user consumption patterns

Studies show that, prior to the introduction of smartphones, consumers tended to use the internet in “chunks” – they would tend to confine their internet activities to when they had an opportunity to sit in front of a computer.

In contrast, Smartphone allow people to go online the very instant they get the impulse. Internet access is becoming more spontaneous and unplanned. One of the main reasons for this behavior is that Smartphone apps hide a lot of complexity from users

About consumption patterns, take our shopping behavior: Two-thirds of smartphone or tablet owners have used their devices to make purchases and more than 80% have used them to help in the purchase decision. For instance during the past six months, more than half Smartphone users with internet access  reported using at least one mobile coupon and  nearly 30% checked a pricing comparison tool

Finally on privacy and smartphones, The research showed the nearly half of users  willing to share their location with brands in exchange for real-time offers when they “check in” via Foursquare or similar geolocation-based apps.

Most used applications for smartphones

There is not surprise that Facebook, Google Maps and Gmail are the most used among applications for Smartphone users.While many of the top 20 apps, including the streaming music services like Pandora and several versions of the popular game Angry Birds.

It also interesting to notice that women and men seems to have different behavior with Social apps : Facebook’s mobile app saw an active reach of 81 percent for women compared to 69 percent for male Twitter also had slightly higher active reach among women (16.5%) than men (13.4%).

Despite the stereotype that men don’t like asking for directions, they seemed pretty comfortable using Google Maps, which has 77 percent active reach among men compared to 71.8 percent among women.

How the use of all these new applications has affected our daily lives

We foresee many trends for instance in theUSfor the first time ever, consumers are spending more time engrossed in mobile apps than they are browsing the web on their mobiles phones. In average Smartphone users are spending average of 81 minutes per day using mobile apps. This almost doubled than last year.

We also see Smartphone users spending  the same time using apps than the time spent on texting and much more than making voices calls.

And this is related to a major behavioral shift : now, with constant access to smartphones throughout the day, consumers are using apps to access yet another level of infrastructure: the society infrastructure itself: everday life things like public transport systems, schools, hospitals, , shops and restaurants, libraries or museums for example.

Consumers are increasingly using smartphones to get better control over this society infrastructure. It seems only natural that there should be an app to help out with local weather, or with getting information about a product while in the store, for getting medical advice or for paying bills. I think that the fundamental change

 We will become more dependent of the internet cloud?

 The research revealed that consumers don’t think about anything called the cloud. Cloud for consumers is something with very hazy edges. Even though consumers had no name for it, to them the cloud is a concrete public space used for sharing that is characterized by easy exploration and access as well as low financial commitment. Similarly, when consumers think about apps they have no clear definition of the cloud. Instead, they talk about situational access, forming habits around everyday mobility and internet access.

They can no longer handle their daily routine without intermittent access to services such as Facebook, Twitter , newspaper, Weather apps, Amazon and so on, from various locations and devices

What other devices will be connected to the cloud in the future?

All kind of devices will be connected to the the cloud in the future. In fact, we estimate that by 2020 50 billion devices will be connected to internet. This is several times the number of humans in this planet.

From consumer connected devices we are going to see cameras with full internet access integrated directly to picassa, facebook, personal storage. and emails. Also healthcare devices like blood monitoring or heart rate monitors will have a direct connection to your hospital and will track your vital signs real time.

One example that I think is very exciting is what is going to have with Cars. Today’ car is a powerful computer on wheels. In fact  a premium car has more than 100 Million lines of software code. Compared this with with a Boeing 787 that has only 6.5 Million lines of software codes. All this software is waiting to be connected to the cloud: so, we will see the rise of connected cars.

Imagine cars that can tell you exactly the road conditions, talk to other cars to check if there is any accident ahead, decide other routes, provide with a cloud based entertainment system that can access to you music store at home, recommend music based on the time of the day/passengers or other car drivers interests or stream the latest movies for the passengers. Also, in case of maintenance the car will communicate directly with the dealer to arrange a visit or in case of accident will contact emergency medical services and the police and send your vital signs to them so they can prepare before they arrive.

So maybe we will see the Android car or the Apple car coming soon…

How Smartphones and Tablets affect the use of other devices like the PC

Smartphone and Tablet computers are eating into usage of other devices. As might be expected, desktop and laptop computers are most affected. In the case of PC and laptops, users claims to have replaced up to 35% of the activities they used to perform with these devices by using tablets like IPAD or Samsung galaxy. Very interesting is that Smartphone’s appears to benefit from tablet usage: 13% reported to use their Smartphone’s less, but 21% reported increased usage, making for a net gain of 8% according to latest research.

The main reasons for this tablet phenomenon: user claim that is easier to carry with you; ease of interface/OS and fast start-up/off.

In 2050, about 70 percent of the world’s population will live in cities, putting huge stress on infrastructure and the environment. In a recent research we look into possible solutions to some of these problems: smart homes and car sharing.

What do we mean by Smart cities? What is different from today’s cities?

By 2050, about 70% of the world’s population will live in big cities, putting huge stress on infrastructure, quality of life and the environment. This is a process that we have already seen happening now. For instance in Kuala lumpur urban area population has grown to over 6 Million and experts expect this number to almost double by 2030. Besides, governments expect an ageing population in these crowded cities. By 2030, 15% of KL population expected to be above 65 years old compared to below 10% today. So a factor of overpopulated cities, ageing population, congested infrastructure and environmental challenges will make a big difference compared to the way we live today.

The transformation of the cities has been based on physical changes and sometimes in the way they are managed

Now we have the chance to transform cities efficiently, by affecting them physically and also virtually. In today’s city, people, things, companies, governments, generate digital data on almost anything they do: Traffic lights, GPS devices, electricity, credit cards, mobile phones, etc.

But only 5% of the available digital information is currently being used and of course Information can be extracted, combined, analyzed, processed and fed back into the city for an intelligent use to improve city lifestyle, city infrastructure efficiency and city management,

Main drivers pushing cities and citizens to become smarter in the future

We can group it into 5 main challenges:

Firstly, In a more crowded place people will try to find ways to improve their quality of living by leveraging on technology this could include areas related to e or mobile health, education and security.

Secondly,  Living in a more stressed environment will forced companies and professional to use digital infrastructure as a way to overcome lack of physical infrastructure and increase efficiency. This could be reflected in areas like tele-working, video conferencing, virtual teams, and converged communications.

Just to give an example on how important is this for a country’s economy: Some 9.6 million reside Jakarta urban area but during the day the population rises by almost a third, with the influx of 3 million people from the suburbs. Road traffic moves at an average speed of 13km/h. The congestion costs around $2.5bn a year in lost production.

Also, With a over-stressed infrastructure like congested highways, subways, trains smart planning will be necessary for commuting everyday. This could be from real time information about traffic conditions, bus arrival/departure time, checking routes status and conditions over your phone to plan better.

Finally, The ability to access and communicate information is central in a modern Economy and key to a smarter city, but also managing natural resources will be essentially. For instance be aware on your real time energy consumption or being able to know what is your current carbon footprint and take actions about it.

 The 5 cornerstones for smart cities

There are 5 cornerstones for developing a smart city : Smart economy, Smart people, Smart governance, Smart mobility and Smart environment. I would like to highlight three of them:

For instance Smart people: Is about using technology to facilitate everyday life for businesses and personal usage. For instance being able to check via your mobile phone the next bus departure or plan your route to work. Or just check your electricity consumption on real time when you are out of home.

Smart governance is about Promoting efficiency, community leadership, mobile working, and continuous improvement through innovation. Essentially, It is about using technology to facilitate and support planning and decision making

Smart mobility that Is related to mobile wallet and payments, ensure internet access for all citizens to increase the efficiency and communications between people and support things like teleworking.

An example in the case of transport systems congestion

Just to give you an example on how important is this for a country’s economy: Around 9.6 million reside Jakarta urban area but during the day the population rises by almost a 12 Million, with the influx of 3 million people from the suburbs.

Road traffic moves at an average speed of 10km/h and for normal people everyday commuting can easily take 4 hours. he congestion costs around $2.5bn a year in lost production.

To make it worst by 2015, largerJakartaurban area is expected to be the fifth largest city in the world, with a population of 21.2 million–15 times its size in 1950. and experts expect that for emerging markets likeIndonesiain the next 20 years the number of new vehicles sold will triple and number of miles traveled will double

So in a smart city context there are many things that can be done to improve this. For instance, building solid digital infrastructure and flexible labor regulations to support teleworking, mobile phone applications for people and road traffic authorities to track on real time traffic congestions and take smarter commuting decisions.

We could also foresee the rise of car sharing companies, where users will buy a service for commuting to their jobs or doing other personal stuff.

For instance, City Car Club in UK cars are available 24/7 and can be booked by the hour, day or as long as user wants. The cars are conveniently located in parking bays near to where people live and work and can be booked online or by phone in advance,.This company take care of insurance, tax, servicing, parking permits and even cleaning, so all you need to worry about is enjoying your journey.

 Players involved in developing and fostering these smart city ecosystems

Building a smart city is not a role of the government only. Is a complex ecosystem that needs to be in place to achieve this coupled with a clear strategic planning.

The ecosystem is build around government that provide physical and sometimes enable digital infrastructure, content providers who create an develop applications and services, ICT Providers who are the one that will build this digital highways and application developers for creating things like e-government applications, mobile payment, e-metering solutions, etc.

Typical innovations we can find in the cities of the future

We will see many, but probably the biggest shift will be the focus on building digital infrastructure and services around cities. We will see more and more companies like YTL but instead of building brick and mortar infrastructure they build digital services. Some examples:

- Buying anything you need by just waving your mobile phone thanks to mobile wallet solutions.

- People being able to measure their carbon footprint real time. Actually, you may even see taxes based on your carbon footprint levels.

- People being able to get mobile phone alerts about traffic conditions on real time or being able to know exactly at what time is the next bus coming. Forget about waiting

- People being able to get your groceries directly from the supermarket already ordered by your refrigerator that is connected to the supermarket ordering system.

- Being able to contact your doctor via videoconferencing, send real time information about your health conditions and get an opinion. Even blood test could be done remotely.

Those could be some ideas, but the opportunities are endless.

Big cities around the world are becoming more unsafe: How smart cities will address some of these issues

Due to the enormous immigration of people to cities, security is definitively becoming an issue. In the future smart city will allow authorities to have real time access and monitoring via surveillance cameras but also social network and onlines communities social graph that will alert them about focus of criminal activities.

With this real time information police will be able to predict areas that could become more unsafe and take preventive measures. Is similar to twitter trending topics concept so in that case citizens and authorities can work together for solving this issue as we have access to real time social networking.

Main barriers for Countries to develop or upgrade some their main cities to this level

Some of key barriers are the following:

• Lack of enough digital infrastructure: In Asia no more than 20% of population has internet access. Without citizen access to internet is not possible create real time sharing of information and boost this ecosystem of applications and services.
• Complex regulatory requirements increase the administrative burdens. Actually, less efficient administrative systems can cost as much as 7%of GDP in some economies. A 25% reduction in administrative costs – e.g., time spent filling out forms – could yield savings of up to 1.5 percent of GDP.
• Lack of long term planning and also difficulties to bring all ecosystem stakeholders together.