“Improving the Customer Experience”

This week, I participated in the VentureBeat Mobile Summit. The tagline for the event was “30 hours. 180 executives. 5 key issues in mobile.” The concept was to bring together the most influential people from across the mobile ecosystem to wrestle with some specific issues that will need to be resolved for all of us to enjoy the full potential growth of the associated opportunities. A worthy goal and an interesting approach. VentureBeat plans on publishing a manifesto at their MobileBeat event in July to capture the outcome of these discussions and debates.

In between working sessions on the topics, VB’s Matt Marshall played MC and moderator for a collection of short keynotes and fireside chats. Although counter to the event concept of working alongside others from the ecosystem, it provided a more comfortable format for large incumbents who are more adept at talking at the ecosystem than talking with the ecosystem. Verizon Wireless and AT&T each had one of these fireside chats with Matt.

Matt kicked off the event acknowledging that we’re in the midst of a revolution and referred to the event participants as the revolutionaries who are reinventing how the world works. Based on the comments from Verizon and AT&T, I’m not sure these companies are all that interested in revolutions that challenge the status quo. Of course, they’re perfectly happy with evolutionary steps that increase their power over the ecosystem.

On Monday evening, Nicola Palmer, VP of Network Operations for Verizon, spoke mostly about Verizon’s impressive nationwide launch of LTE last fall and their continuing work to strengthen and expand that network.

She talked about the massive data growth that is happening and predicted that video would drive 68% of mobile traffic by 2014. (I’m not sure if these are Verizon numbers, or from Cisco’s model, or another source – there was no credit given on the slide she used.) She mentioned that when advanced smartphones moved onto the networks, all carriers saw big jumps in data traffic. For Verizon, that was Android, while for AT&T, it was the iPhone. And now that “everyone” has “everything” (referencing Android and the iPhone), we’ll continue to see this growth in data traffic. (Apparently, in Verizon’s eyes, the U.S. market has already shrunk to the two carriers that carry the iPhone.)

Matt asked her if openness is a differentiator for Verizon. Nicola said that the differentiator for Verizon is network reliability, but said that the fact she’s speaking at this event is an indicator that Verizon sees value in enabling the ecosystem. “We wouldn’t have bothered coming to an event like this two years ago.”

Someone asked her about Verizon’s use of femtocells. She said that Verizon’s use of femtocells is focused on the home and that they are using other technologies and approaches to manage data growth, including data optimization and data management in the network. “When we move to metered billing – I think everyone recognizes that the era of unlimited data is over – users will welcome data management. Metered billing will turn everything on its head. Users will need to think differently. App developers will need to develop differently.” So, in other words, Verizon subscribers will welcome data management with open arms because it will improve their customer experience (I assume by hopefully reducing the incidents of huge data overage bills).

I know from her comments that Verizon doesn’t see Sprint as worthy of notice, but if she would care to listen, we actually don’t think the unlimited era is over. We’re going to do everything we

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can to be able to profitably offer unlimited data plans for our smartphone customers. We believe that “unlimited” is the experience customers really want.

It’s just a hypothesis, but my guess is that Verizon (and AT&T, who is actually leading this charge) see metered billing as a lever to return to the Big Bell Dogma heyday when carriers kept a stranglehold on innovation in the mobile ecosystem. Metered billing is a barrier to folks using mobility for everything. It forces people to stop and ask “Should I do that now, on my mobile device, or should I wait until I get home or to the office where I can use my (monopoly profit for the Bells) wireline service?” It puts the carriers in the strong negotiating position with app developers and service providers. If providers want to stand out by making it easy and affordable for mobile users to use their apps and services, they’ll need to come to the carriers for help. The euphoria that permeates events like this Mobile Summit because of the unfettered growth in the mobile ecosystem, and the opportunity to earn attractive returns across the ecosystem, may be threatened as the Big Bells try to roll back the clock to the pre-iPhone era. This should be interesting to watch.

On Day 2, AT&T had their fireside moment, with John Donovan, the carrier’s CTO, jokingly wary of Matt Marshall’s questions. Donovan focused his prepared remarks on the very remarkable progress that AT&T has made in opening up to developers. But Matt quickly turned the focus of his questions to AT&T’s planned acquisition of T-Mobile.

Again, the answer to all questions is “improving the customer experience.” John said that the merger will “improve the customer experience” by addressing AT&T’s network quality issues, extending the network, increasing grid density and network capacity. When Matt asked him about whether the deal would stifle innovation, John said “the deal won’t stifle innovation, in fact innovation benefits will expand, not contract.” I’m still trying to figure out the logic behind that claim.

An audience member asked about AT&T’s strategy for mobile payments. Donovan confirmed that Isis is AT&T’s primary strategy for mobile payments. Of course, Isis is the perfect example of how the Big Bells want to put a stranglehold on innovation and return to the good old pre-iPhone days. In fact, in a separate discussion, a different AT&T participant refuted someone’s expectation that dozens of mobile wallets would start appearing on smartphones, by saying “We won’t allow that. We learned our lesson from the iPhone, which opened it up way too much. It was good for the users. It was good for the ecosystem. It was good for Apple. But it was bad for the carrier. We left a lot of money on the table, and we won’t let that happen again.”

So much for “improving the customer experience”…

4 Responses to ““Improving the Customer Experience””

  1. PaulH says:

    Hey Russ,

    I thought you were slowing down on the blog? This is your third or fourth post in about a week. I’m not complainin’! =)

    -Paul

  2. Joshua Rodd says:

    Since AT&T went to metered U-Verse, I now have a 250GB cap (forced on me on May 1, 2011) and my DSL performance is 6.0/1.5 at the $39/mo tier that I pay. I regularly experience speeds less than what I’m supposed to be getting.

    I have a second residence where I have Verizon DSL (now Frontier). I get the joy of 3.0/768 for $35/mo, and am currently threatened with a 5GB/month (yes, 5GB) cap.

    My Sprint 4G WiMax performance is 6.0/1.5, is not capped, and I spend $60/mo for Sprint 3G+4G.

    Just calling out how I see my “customer experience” being “improved” as a customer. I’m sure the infrastructure costs of WiMax are much higher than DSL over legacy copper, so AT&T and Verizon can’t be complaining about capital outlays.

    [*]All prices above exclude any contract discounts or discounts not available to the general public or taxes but include any mandatory fees.

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