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Why Superior Network Performance Matters

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  • 1. services »» Keeping up with the smartphones Why superior network performance matters Dissatisfaction among smartphone users has led to rapidly increasing demand for better network quality. This makes superior network performance a key differentiator for operators who want to attract new users – and turn existing ones into loyal brand promoters. ▶ Close to 90 percent of smartphone users respond well with users’ desire to be con- experience problems when using their de- stantly connected and have a high-quality vices, according to research by Ericsson Con- experience while using smartphones. Poor sumerLab. Overall, half of the users surveyed speed and coverage were perceived as main said they encountered quality issues on a contributors to the problems, and together weekly basis. Although most of the problems form the most important drivers behind are considered minor, they are occurring far greater mobile-broadband use among both too often and users perceive them as irritat- casual and frequent users. ing or even frustrating. Ericsson ConsumerLab has also found that The most frustrating problems by far are only about 51 percent of smartphone users internet-connection issues, app crashes and are highly satisfied with their networks, slow speeds; these results cor- meaning that the experience of the other half can definitely be improved. Keeping all this in mind, how can operators develop high- quality networks that are smart- phone- and tablet-ready – and that52 • EBR #3 2012
  • 2. Keeping up with the smartphones «« services Do you experience issues with your smartphone? Telstra in Australia Customer satisfaction increase ▶ Having a high- quality and No Yes superior network can definitely 13% 87% pay off – Telstra – Australia’s largest operator, has found. Not only was Telstra ranked highest in overall network quality according to the J.D. Power and Associates 2012 Australian Wireless Network Quality Study [2], it also consist­ Source: Ericsson ently delivered the country’s top mobile-network speeds [3]. Telstra’s superior-performancecan meet the challenges posed by users’ new mobile-broadband ecosystem is the oper- network has resulted in businessdemands? ator’s network-infrastructure strategy, results well ahead of the com­ which needs to be complemented with a petition. For the financial yearManaging user perceptions device strategy. High-end devices drive ending June 30, 2012 for mobileNear-ubiquitous coverage and a fast and re- network capability, while low-end ones subscriptions, the operatorliable connection are the most important drive capacity. enjoyed strong year-on-year revenue growth (8.5 percent),drivers of smartphone user satis­ action. In f Network design – The worldwide surge 33 market-leading profitability (36fact, in a separate qualitative study carried in smartphones and smart mobile devic- percent EBITDA), growing marketout in ­Indonesia, Ericsson ConsumerLab has es has placed new and ever-changing de- share (signing up 1.6 million newfound that mobile-broadband users are will- mands on mobile networks and systems. customers), and increaseding to pay 25 percent more for a doubling of To deliver true in-service performance, customer satisfaction (customertheir network speed. operators should see network design as a complaints reduced by 26 per­ cent) – all achieved in a highly Other factors, such as price plans and de- constantly evolving process. mature market with over 130vice choice, are considered less important 33 implementation – Rapid implemen- Swift percent mobile-subscriptionamong users. Taking steps to move users tation through automation is fueled by the penetration.from a low to a high satisfaction level would need to decrease operational costs by au-dramatically reduce churn. If mobile opera- tomating simple and repetitive tasks, and Vivo in Braziltors are to keep costs under control, it is even by the need to reduce margins of error by Unwavering focusmore critical for them to retain existing us- automating complex tasks. on network qualityers than to acquire new ones. 33n i n g to ma xi m i z e cu r r e nt ass ets – Tu ▶ Vivo, Telefónica’s An operator’s net promoter score (nps), O ­ perators can secure optimal network Brazilian operation, has foror likelihood of brand promotion by users, performance and user experience by con- years focused its strategy on can be calculated by plotting the per- tinuously tuning their networks to ensure network quality and coverage, centage of users who would act as adequate capacity and coverage to meet according to the case study Vivo e ­ ither detractors or promoters of a user needs. The operator can then main- focuses on network coverage and quality to increase customer brand. ConsumerLab has found that tain the resulting competitive advantage retention and loyalty from re­highly satisfied users can increase an oper- by ­ eveloping additional networks using d search firm Informa Telecoms &ator’s nps by at least 40 points. the same product setup, leading to im- Media. This has translated into proved performance with minimum addi- sustainable growth for thefive factors for improved performance tional capex. When tuning networks, op- operator, mainly in the highTo satisfy their users, operators need to de- erators can simplify the required tasks by average revenue per user (ARPU)velop strategies that result in best-in-class focusing on selected relevant kpis, meas- postpaid segment. In the fourth quarter of 2011, Vivo’s share ofnetwork quality, speed and coverage. Erics- uring them, and then converting the meas- Brazil’s postpaid market grew to ason recommends that this work be based on urements into actionable improvements market-leading 33 percent, whilethe following five factors: to be made. its overall ARPU carried a 1033Cutting-edge products – Superior prod- Service assurance – Total service assur- 33 percent premium over that of its ucts with advanced features and algo- ance means more than simply resolving closest competitor. rithms ensuring a high-quality user expe- the problems experienced by users – it also Furthermore, Vivo’s churn rates have remained consistently low rience even in the most extreme situations involves proactively delivering better ser- (around 3 percent), despite the are central to high-performance net- vice quality. Service-quality management fact that it has achieved out­ works. Benchmarking various has traditionally relied on aggregated ser- standing growth in the prepaid n ­ etwork vendors gives a good vice kpis, such as average call-drop rates, segment as well. indication of which prod- but there are tools in the market that en- ucts are the best. At able the drill-down of user experience to the core of the an individual level. This provides greater flexibility and insight for tracking specif- ic problems, and makes it possible to pri- iSt ock ph oritize faults that influence service. oto EBR #3 2012 • 53
  • 3. services »» Keeping up with the smartphones Priority is based on user impact – tak- http://www.ericsson.com/res/docs/2011/111014_smartphone_ ing into account value metrics derived brochure.pdf Quality in the • Ericsson, 2011, Network 4Profitable Connectivity, eyes of the user from other information systems. http://www.ericsson.com/res/docs/whitepapers/wp-network4.pdf ▶ A good mobile-broadband • Ericsson, 2011, Differentiated Mobile Broadband, users blame the networks http://www.ericsson.com/res/docs/whitepapers/differentiated_ experience includes not only superior speed and coverage, but Users are highly sensitive to the quality of mobile_broadband.pdf also a number of implicit their mobile networks. The good news is that Author qualities, namely: operators can significantly enhance user per- ▶ Andres Torres is ceptions of network quality by addressing the a Strategic Marketing ▶▶ onvenience – Users want to C top three problems experienced with it: in- carry out tasks involving little Manager for Ericsson’s effort or difficulty. Devices and ternet-connection difficulties; app and ser- Region South East Asia and apps play an important part vice crashes; and slow network speeds. Al- Oceania. Based in Australia, he is often presented with here, but so do the network though not all of these issues are under their and its speeds. opportunities to highlight the importance of direct control, mobile-network operators performance in mobile-broadband networks to ▶▶ mmediacy – Latency and slow I need to realize that users often blame the customers. Torres has been working for Ericsson for speeds must be minimized. Some users, when encount­ networks for most of their device problems. well over a decade, and in his previous roles in the As a result, carriers must take the lead and Ericsson Global Services organization, he ering a problem, will either participated in numerous CDMA2000, WCDMA/HSPA wait or try again, but as many engage with other players in the ecosystem and LTE projects in four continents, where he has as 40 percent of them will put – such as device manufacturers, infrastruc- been a first-hand witness of the implementation of their phones away, resulting in reduced usage – and poten­ ture vendors and application developers – to superior performing networks. deliver a truly superior user experience. ● (andres.torres@ericsson.com) tially, over time, a negative feeling about mobile- broadband services. Author References ▶▶ implicity – Operators must S 1. Ericsson, 2012, Traffic and Market Report, http://www.ericsson.com/ ▶ Warren Chaisatien is carefully select the range of res/docs/2012/traffic_and_market_report_june_2012.pdf a Strategic Marketing devices they want to offer. 2. J.D. Power and Associates, The McGraw-Hill Companies. Australian Manager for Ericsson’s Smartphones, tablets and Wireless Network Quality Study, retrieved July 10, 2012, http://www. Region South East Asia and other mobile devices must be jdpower.com/content/press-release/Z6zHvAi/2012-australian- Oceania, currently focusing easy to use. on mobile broadband and wireless-network-quality-study.htm ▶▶ eliability – From the user’s R LTE, business-model innovation, and the telecom 3. Telstra, NextG Mobile Network Works Better in More Places, retrieved perspective, quality is defined cloud opportunity. He has more than 15 years of July 10, 2012, http://www.telstra.com.au/mobile-phones/coverage- international ICT industry experience, with an in- as having access to the net­ networks/network-information/nextg/ work anytime, anywhere; it depth understanding of market dynamics, operator is the service provider who is strategies, technology evolution and business Brochures and white papers implications. Before joining Ericsson in 2010, responsible for delivering • Ericsson, 2012, Profitable Prepaid Smartphones, Chaisatien was a telecom analyst and consultant in this experience. http://www.ericsson.com/res/region_RASO/docs/2012/ericsson_ Canada and Australia. He holds an M.Sc. in prepaid_paper_june.pdf engineering management from the University of • Ericsson, 2011, Why Smartphones Need Smart Networks, Technology, Sydney. (warren.chaisatien@ericsson.com) What is a superior network? turn complex structures into simpler ones. Converged platforms that have simple architecture and few interfaces can be combined with cen- To provide networks that offer high levels of quality, tralization, standardization and automation to keep opex, capex and op- operators should focus on making them truly erational efforts down while enabling innovation. smart, simple and scalable, and they ensure networks ▶ Scalable deliver superior performance. The increased use of mobile broadband is spawning changes in markets, ▶ Smart businesses and technology. With mobile-broadband demand projected Smart networks allow operators to gain a better understanding of users, to grow by 60 percent annually for the next five years [1], operators need their preferences and subscriptions, as well as the devices, apps and con- to create scalable solutions that allow business to grow in line with – or tent being utilized – and to act on this knowledge. They allow operators even ahead of – the demand curve. Four growth dimensions constitute to gain differentiation and grow their business. Smart networks also help network scalability: bandwidth, devices, signaling and analytics. In short, operators reduce costs because they enable optimized use of network operators must be able to ramp up their networks quickly to meet ex- resources. These networks include more than just better network infra- ponential demand without service deterioration. structure; they also encompass support systems that provide the flexibil- ity needed to respond to changing user behaviors and emerging busi- ▶ Superior performance ness models. To achieve this objective, operators need solutions that are Broadband is the highway to the cloud. Its performance determines the smart from end to end; the right partnerships are key in this process. user experience for all things digital and, importantly, it plays a pivotal role in operators’ ability to monetize that experience. User experience can- ▶ Simple not be tested in a lab, since it is the actual, real-life network performance New business opportunities can emerge from almost anywhere, and are in terms of speed, latency, resiliency and capacity that influences user sat- sometimes unpredictable. Operators need to be agile and able to take isfaction. Optimal network design, tuning and assurance are critical advantage of opportunities when they arise, and to do so, they need to to realizing networks that offer superior performance.54 • EBR #3 2012

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