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IBM’s 2014 Global Telecom Consumer SurveyKen KralickIBM’s Telecom Global Solution ExecutiveCustomer Experience

COMPETE IN AN

ERA OF SMARTENGAGE. INNOVATE. TRANSFORM.

IBM’s 2014 GLOBAL TELECOM CONSUMER SURVEY

SURVEY RESULTS

More spending on mobile usage

The mobile is the device

App use continues to grow

More self-service options

Willingness to collaborate

Moderate trust with personal information

IBM’S 2014 GLOBAL TELECOM CONSUMER SURVEY

THE RESULTS

Closely followed by the laptop/netbook

The mobile phone is most valuable device to access the Internet

Mobile Phone

Desktop PC

Internet Enabled TV

Game Console with Internet Connection

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

83%

72%

51%

46%

18%

17%

14%

13%

11%

13%

15%

13%

15%

10%

12%

14%

6%

15%

33%

41%

67%

73%

74%

73%

Very Valuable Moderately Valuable Little Value/Not Applicable

OF RESPONDENTS IDENTIFIES THE MOBILE PHONE AS THE MOST VALUABLE DEVICE

Source: 2014 IBM Global Telecom Customer ViewQuestion: How valuable are the following devices for you to access the internet?

83%

Consumer sentiment in Australia is positiveAlso for spending on telecommunications comparable to the global average

Gre

ece

Spain

Nether

lands

Italy

Irela

nd

Belgiu

m

Poland

Finla

nd

France

Ger

man

y

Japan

UAE

Norway UK

Canad

aUS

Swed

en

Mal

aysi

a

Philippin

es

Denm

ark

Austra

lia

New Z

eala

nd

Thaila

nd

Saudi A

rabia

South A

frica

Brazi

l

Russia

Indones

ia

Egypt

Mex

icio

Turkey

China

India

Kenya

Niger

ia

-60%

-40%

-20%

0%

20%

40%

60%

80%

-39%

-18% -18% -16% -16% -14%-10% -9% -7% -6% -3% -2% -1%

2% 4% 4% 5% 5% 7% 8% 10% 10% 11% 13%17% 18% 18% 19% 22% 22% 23%

37% 39%

59% 60%

Source: 2014 IBM Global Telecom Customer ViewQuestion: Compared to previous years, are you likely to spend less, the same or more on mobile phone usage (Voice calls, SMS, MMS) in the next 2-3 years?

Net Increase/Decrease Consumers spending Mobile phone usage (voice calls, SMS, etc.) 2014 - 2016

This is also true for increasing spending on mobile broadband usagei.e. accessing the Internet using a mobile broadband subscription

Gre

ece

Irela

ndIta

ly

Nether

lands

Belgiu

mSpai

n

Poland

Philippin

es

Japan

UAE

France

Ger

man

yUK US

Swed

en

Finla

nd

Canad

a

Mal

aysi

a

Norway

Austra

lia

Mex

ico

Russia

Denm

ark

New Z

eala

nd

Saudi A

rabi

Brazi

l

South A

frica

Egypt

Turkey

Indones

ia

Thaila

ndIn

dia

China

Niger

ia

Kenya

-60%

-40%

-20%

0%

20%

40%

60%

-37%

-16% -15% -15%-10% -8% -8%

5%

-4% -4% -2%

0%3% 5% 5% 5% 6% 8% 10% 12%

1%

13% 13%

3%

19%

0%

20% 22% 22%

2%

36%40%

50%53%

Source: 2014 IBM Global Telecom Customer ViewQuestion: Compared to previous years, are you likely to spend less, the same or more on mobile phone usage (Voice calls, SMS, MMS) in the next 2-3 years?

Net Increase/Decrease Consumers spending MOBILE BROADBAND usage (Internet from Mobile) 2014 - 2016

Customers prefer to help themselves

46% 54%

48% 52%

58% 42%

61% 39%

65% 35%

67% 33%

72% 28%

72% 28%

77% 23%

81% 19%

81% 19%

81% 19%

83% 17%

83% 17%

86% 14%

87% 13%Pay bills & recharge accounts

Track usage & get detailed bills

Set alerts & limits

Know outstanding bills/amounts

Contact history

Status checks

Information on buy products

Change administrative information

Dealer/retail store location enquiries

Know current plan / change it

Info on comms products/services

Start/stop subscription services

Get offers customised for you

Registration

Best plan based on your usage pattern

Raise service issues & track them

Self Service Human interaction (live agent)

Source: 2014 IBM Global Telecom Consumer SurveyPlease indicate your preference for either self service or human interference (live agent)?

A good move for both customers and the service provider as this can lower support costs while improving customer satisfaction

PREFER TO BE SELF SERVICE

46-87%

Consumers like to interact with their provider using a wide range of channels Although the phone still is prominent in case of complaints

Product

/Ser

vice I

nform

atio

n

Perso

nal In

fo/S

ervic

e Chan

ges

Complai

nts/P

roblem

Solu

tion

Special

Offe

rs/L

oyalty

Pro

gram

s

Feedbac

k on ex

perien

ces

0

10

20

30

40

50

60

Phone call with Call Centre

In-Person (Face-to-Face)

Email

SMS

Online via CSP website

Mobile APP

Social Network

OF RESPONDENTS PREFER TO CALL THE CALL CENTRE TO DISCUSS COMPLAINTS AND PROBLEM RESOLUTION

Source: 2014 IBM Global Telecom Customer ViewQuestion: What is your preferred channel of interacting with your telecom provider

54%

Seven out of ten consumers said they are willing to provide feedback or engage with them to help them to improveEspecially related to existing products and services

Improvement Existing Product/Service

Improvement Customer Care

Development New Product/Service

Feedback on Communication to Market

Feedback on Overall Strategy

Improvement of Existing Campaign

Development of New Campaign

Other

0% 10% 20% 30% 40% 50% 60%

Topics customers are prepared to communicate on with their provider

OF RESPONDENTS LIKE TO INTERACT WITH THEIR PROVIDER ON IMPROVING AN EXISTING PRODUCT/SERVICE

Source: 2014 IBM Global Telecom Customer ViewQuestion: On which topics do you want to communicate with your Telecom Provider to help the organisation to improve?

48%

This raises a few questions

Would consumers appreciate proactive help managing their devices?

Who’s going to capture that additional spend?

How can revenue grow with App usage?

Which self-service option is the best investment?

What’s the most natural way to initiate collaboration?

Could efforts to build more trust actually backfire?

HOW COMPREHENSIVE IS THIS SURVEY?

IBM SurveyIn Q4’13 / Q1’14, close to 22,000 consumers took part in the survey in 35 countries - in both mature and emerging marketsThese countries account for 67% of the worlds population and 84% of global GDP

China (1265)

Australia (652)

Canada (594)

Belgium (323)

Brazil (671)

Denmark (319)

Egypt (343)

India (1038)

Finland (309)

Greece (738)

France (1343)

Germany (831)

Indonesia (735)

Ireland (351)

Mexico (658)

Italy (560)

Malaysia (506)

Japan (964)

Kenya (322)

Netherlands (548)

New Zealand

(464)

Russia (1003)

Nigeria (550)

Poland (328)

Norway (303)

Philippines (877)

Saudi Arabia (306)

South Africa (649)

UAE (320)

Spain (809)

Turkey (533)

Sweden (354)

Thailand (616)

UK (657)

US (1083)

2013/2014 CONSUMER SURVEY

IBM survey- Australia

−652 respondents

−3% of total sample

Australia

− Mobile/Wireless Broadband− Pay TV (Cable, Satellite, IPTV)− Internet Telephony

− Fixed telephony (landline)− Mobile Telephony− Fixed Broadband (Cable, DSL, FTTx)

*SERVICES ARE

50% 30%

13% 6%

652 respondents were drawn from across Australia and subscribe to at least one service from a range of CSPs

IBM Survey

Series1

0%

20%

40%

60%

80%

100%

17% 17%28%

5%

22%35%

36%

24%

20%

19%

26%

24%

41%29%

10%

48%

50 and above

35-49

25-34

Below 25

Age distribution across Australia CSPs

CSP analyses have been restricted to those for which results can be considered to be statistically relevant (confidence level 95% or higher)

In our sample, Vodafone had the highest proportion of BELOW 35s iinet had the highest 35+ proportion

SO WHAT ARE THE KEY “AREAS FOR IMPROVEMENT”?

Areas to improve – worth investigating

OTT usage up; SMS and traditional mobile voice down

Poor social media presence

Traditional channels not being used

Unreported negative experiences get shared

Why bother calling them – it won’t help

Customer advocacy is very low

LET’S LOOK AT SOME MORE OF THE ACTUAL SURVEY RESULTS

4% 16%

7% 27%

9% 31%

10% 31%

21% 46%My Telecom Provider allows me MULTIPLE WAYSto interact and communicate with them

My Telecom provider LISTENS TO ME and collectsthe right amount of information to meet my

communication needs

My Telecom Provider USES THE INFORMATION italready has about me rather than asking me to

provide it repeatedly

My Telecom Provider enables me to provideFEEDBACK or to provide input to develop new

communication products and services

My Telecom Provider uses SOCIAL MEDIA in aneffective way to engage with me

Strongly agree

Moderately agree

Telecom providers don’t yet get socialOnly one out of five consumers feel their provider uses social media effectively to engage with themHow good is your primary telecom provider in interacting with you?

of respondents agree that CSPs use Social Media in an effective way to engage with them

20%

Source: 2014 IBM Global Telecom Consumer SurveyIndicate to which agree/disagree with the following statements on your Primary Telecom provider?

Only

Would TELL OTHERS about the bad experienceSTART considering COMPETITIVE services from other

providersWould COMPLAIN to my telecom provider

Would DISCOURAGE OTHERS to use this providerWould use the services of my provider LESS

FREQUENTLYWould STOP making PURCHASING from my provider

Would post a NEGATIVE REVIEW or comment ONLINE

Would COMPLAIN on SOCIAL MEDIA

Would NEVER USE my telecom provider again

NO CHANGE in behavior

50%

49%

46%

36%

29%

28%

17%

15%

10%

7%

47%

45%

49%

53%

60%

58%

45%

40%

68%

53%

4%

6%

5%

11%

11%

13%

38%

45%

23%

40%

Always/Often Regularly/Possibly/Sometimes Never

Response to negative experience

of respondents will tell others – always or often – about NEGATIVE experiences

50% Responses in case of negative experiences

After a negative experience, consumers are likely to tell others, discourage them to use the provider, but do not complain to their provider

Source: 2014 IBM Global Telecom Consumer SurveyIndicate to which agree/disagree with the following statements on your Primary Telecom provider?

IBM’s ‘Advocacy Index’ measures the level of advocacy by analysing responsesSpecifically related to recommendation, purchase intent and staying intent

LIKELIHOOD TO

RECOMMEND

Willingness to recommend one’s primary provider to friends and family

PURCHASE INTENT

A willingness to increase one’s purchases if one’s primary provider expanded its assortment and offered products currently found only at the other providers

STAY RATE

A willingness to stay with one’s primary provider, even if other provider begin offering competitive producers or services

Advocates and AntagonistsUnderstanding who is an Advocate and who an Antagonist, and why, is important for driving growth and improving customer retention

Advocates

Apathetics

Antagonists

Higher Shareholder Value

Lower Shareholder Value

Advocates have a higher wallet share and are highly complimentary of the provider capability

Apathetics are generally passive participants susceptible to competitor offerings

Antagonists have low wallet share and high support costs and are prone to bad-mouth the provider

“I have to recommend my provider to several people”

“They have amazing customer service”

“They are more expensive but I hardly get disconnected or have calls dropped”

“I think my telco over-charges me but how can I prove it; my credit runs out too quickly after I top-up”

“The promotions lack any relevance to me”

“I am looking to switch to the new provider offering cheaper rates”

IN GENERAL THE ADVOCATE % IS SHRINKING, IT’S GETTING HARDER TO DEVELOP ADVOCATES

Advocacy in the telecommunications industryAdvocacy level in the telecommunications industry is very low and Australia is no exception

Sou

th A

fric

a

Germ

an

y

Ru

ssia

Den

mark

Eg

yp

t

Ind

ia

Mexic

o

Ph

ilip

pin

es

Tu

rkey

Fin

lan

d

Ind

on

esia

Norw

ay

Pola

nd

Sw

ed

en

Ch

ina

Belg

ium US

Italy

New

Zea..

.

Au

str

ali

a

Fra

nce

Gre

ece

Neth

erl

...

Irela

nd

Bra

zil

UK

Sau

di

Ar.

..

Mala

ysia

Sp

ain

Can

ad

a

Th

ail

an

d

UA

E

0%

20%

40%

60%

80%

100%

36% 37% 40%46%

19%27%

39%

28%34%

40% 40%47% 46%

52%

35%

45%51%

46%52% 56%

44% 44% 48%53% 52% 54%

31%37%

56%63%

44% 47%

36% 35%33%

27%

55%46%

37%

49%43%

39% 39%32% 34%

28%

47%

37%31% 36%

30% 27%

39% 38%35%

31% 32% 31%

55%49%

30%24%

44% 41%

28% 28% 27% 27% 26% 26% 24% 23% 23% 21% 21% 21% 20% 20% 19% 19% 19% 18% 18% 18% 17% 17% 17% 16% 15% 15% 14% 14% 14% 13% 12% 12%

Source: 2014 IBM Global Telecom Consumer SurveyWhich of the following Loyalty statements Recommendation, buying, staying intent about your provider do you agree/disagree with?

ADVOCACY RATE INAUSTRALIA

18%

People like to be in control, and to be informed, about their personal dataHowever, getting higher value products/services for a lower price and getting free/ discounted products are the key stimuli to provide personal information

Demographic Data (age,

ethnic group etc.)

Lifestyle Data (e.g. % or de-vices owned)

Media Usage Habits (e.g. TV

viewing)

Identification Data (name, address etc.)

Location Re-lated (e.g. Where you were/go)

Medical Data Financial Data (e.g. Creditcard

nbr/type)

0

10

20

30

40

50

Willingness to provide information to a provider if it improves the quality of services/recommendations

Strongly Object Serious Concerns Depends on Benefits Some Concerns No Objections

OF RESPONDENTS HAVE STRONG OR SERIOUS COCERNS ON PROVIDING FINACIAL INFORMATION TO THEIR PROVIDER

Source: 2014 IBM Global Telecom Customer ViewQuestion: What is your willingness to provide information for each of the following items to a provider you trust if it improves the quality of service and/or recommendations.

66%

And again, more questions arise

How significant is the shift to data usage; will it require a new business model?

What’s the risk of an increased social media presence?

What channels will deliver the best ROI?

What’s the weight of consumer sentiment gathered from social media?

How is it possible to understand consumer frustrations when they don’t call about it?

What’s the relationship between Customer Advocacy and NPS?

Takeaways

Get social Be transparent about privacy

Work on deeper insights

Experiment with value exchanges

For more information or discussion, please contact:

Ken KralickIBM’s Telecom Global Solution Executive - Customer

Experience

ken.kralick@us.ibm.com+1.703.371.3598 mobilelinkedin.com/in/kralick

twitter.com/KennethCKralick

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ERA OF SMARTENGAGE. INNOVATE. TRANSFORM.

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