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Customer engagement could revive GCC’s telecom profits

Middle East: Wednesday, October 02 - 2013 @ 00:00

Telecommunications firms in the Gulf region must rebalance their approach towards customer experience to stay profitable in a rapidly changing business environment, according to a paper by Kinetic BPO.

The outsourcing and offshoring specialist believes that telecom companies are failing to ‘align with customer expectations’, which includes troubleshooting within 24 hours, creating a personalised service and making customers feel valued.

The misalignment between expectations and services largely exist due to companies implementing incorrect metrics to measure ‘customer satisfaction’, such as KPIs at contact centres measuring how fast calls are answered, as opposed to how well issues are resolved, poorly trained frontline staff and an over-reliance on retail outlets for customer service.

“The telecommunications sector is the backbone of most economies in the region and it is critical for sustained economic growth,” says Joe Tawfik, CEO of Kinetic BPO.

“The key to successfully navigating the many challenges facing this region’s telecom groups lies with the customers. A number of studies show a direct correlation between enhanced customer experience and profitability. Those who fail to invest in ‘customer experience’ and align their services with customer expectations will lose market share and reduce profitability.”

In the UAE, telecom companies saw their profit levels dwindle after the government set new royalty rates in 2012 for operators, under their licence agreements, forcing them to pay higher tax bills. Currently, Etisalat pays 15 percent on revenues and 35 percent on profits for the 2012 to 2015 period.

Du Telecom, meanwhile, was required to pay five per cent on revenues and 17.5 per cent on profits in 2012, but its revenue and profit royalties will rise incrementally on an annual basis, reaching 15 percent and 30 percent by 2016.

“While telecom groups are working towards streamlining their domestic operations to address the new market realities and to better prepare themselves for sustained growth, the success will ultimately depend on the adoption of customer-centric strategies to elevate customer experience. It is not sustainable to compete on price and many of the operators currently have few loyal customers,” adds Tawfik.

“This makes these customers likely to leave if a better offer comes along. We provide a roadmap to develop how customers feel about a brand. We believe there is a significant opportunity to convert neutral customers into brand advocates. By changing how telecom companies serve their customers, they can ultimately increase customer loyalty, making a traditional cost item into a revenue-generating centre.”

Recent research from Gartner, reveals that Middle East spending on consumer-based technology and on subscription-based services for mobile voice and data is higher than the global average.

“There is a real appetite for the latest smartphones, the newest apps and innovative content from Middle East customers. This creates real opportunities for operators in the region and also dictates that speed is critical to capitalise on the opportunities,” Tawfik concludes.

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Wednesday, October 2- 2013 @ 0:00 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.

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