Analyst Angle: Social network integration and pricing innovation

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Editor’s Note: Welcome to our weekly feature, Analyst Angle. We’ve collected a group of the industry’s leading analysts to give their outlook on the hot topics in the wireless industry.

Even with flattening growth rates and price pressure from increasing competition, voice is still a very important revenue generator for many operators all over the world. Nonetheless, this revenue is threatened in various ways by OTTs offering IP-based communications for free or at a fraction of MNO prices; growing churn rates due to competition; and the implementation of number portability in several markets.

However, despite all these problems, operators have been slow to innovate in this space; their strategies have been mostly based on defensive  moves against OTT offers of VOIP services. In countries such as Brazil, a price war began that drove down prices and gave users incentive to split their traffic among different companies, reducing ARPU and leaving operators to fight for traffic. In many markets, voice has turned into a commodity, and operators only compete on price, mostly disregarding other competitive dimensions.

This situation is familiar to billing platform vendors; these players have being challenged by customers to offer solutions in this new environment, and as a consequence, the billing platform industry is transforming itself. The vendors’ answer to this pressure was to be creative, incorporating new features that are inline with recent market changes. And central to this transformation has been a high integration of billing with social networks, such as Facebook and Twitter, enabling innovative pricing strategies and higher customer satisfaction.

Social Network Integration
Social networks have become the most popular services on the Internet. Facebook has reached 1 billion active users, and it is still growing, adding more services, such as photo sharing and instant messaging. The growing importance of social networks may threaten operator voice and data revenues, but it also presents an opportunity for operators to increase engagement with their customer base and their value to their users.

Some billing platforms are now integrating their systems with social networks, opening up opportunities never seen before. By simply installing a widget on their social network page, users can have online access to their real-time usage, check how much is left on their monthly allowance, recommend a promotion to friends and acquire new services—all this without leaving their social network of choice, and without any contact with the operators’ customer support service.

It is also possible to use this new channel to promote highly customized promotions, combining user data from social and mobile networks to deliver the promotion on the user’s page, much like other advertisements that are displayed on any Web page.

These solutions also enable innovative promotions, such as next-generation “friends and family,” which could allow an operator to design a special tariff for friends in the same social network—and for those friends who are not with the same operator, they could receive a message tailored to encourage them to switch to their friends’ operator and enjoy the promotion.

Social network integration can also bring higher customer satisfaction, offering a new channel for customer care, such as accessing chat via the social network or using self-help portals—all this, while alleviating the flow of contacts to the call center, helping to reduce costs.

All in all, integrating billing to social networks can bring much needed innovation for the traditional voice market, deliver a higher quality customer experience and at the same time, provide operators with alternatives to protect and increase one of their most important revenue streams.

Ari Lopes is the principal analyst for Latin America at Informa Telecoms & Media.

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