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What does the Future Hold for the Mobile Operators?

It is 44 years since the world’s first mobile phone call was made on April 3, 1973, when Martin Cooper, a senior engineer at Motorola, called a rival telecommunications company and informed them he was speaking via a mobile phone. It was another 34 years before the first iPhone arrived and transformed the way we use our phones today.

As the technology has improved, both in terms of devices and the networks (in some places) our usage patterns have changed. Are the providers keeping up with this in terms of the packages being offered and are they in fact under threat if they do not?

A variety of recent reports have reflected these changes. A 2016 report said that 31% of smartphone users make no traditional voice calls in a given week. This reflects the growth of consumer apps such as Facetime and Whatsapp, which reflected growth in interest of video calls, and a desire to avoid roaming charges.

Similarly, in the business sector the growth of VoIP and phone system apps allowing people to have their office landline number on their mobile has seen traffic move away from the mobile networks.

There has been a long-standing battle over whether it is better to have a mobile or landline number if you want to choose just one number to promote. It would appear the landline is winning.

The first text was sent on December 3, 1992, when British engineer Neil Papworth, 22, used his computer to send the message ‘Merry Christmas’ to a mobile phone. The number of texts sent in Britain peaked at in 2011.  Since then it has fallen by almost half and has been over-taken by instant messaging applications.

WhatsApp passed a billion active users and research found that the main reason 42% of Brits used a mobile phone was to access messaging apps. Other apps such as Snapchat have appealed to younger age groups who see SMS as old and unfashionable.

The implication for the mobile networks is that of lost revenue as SMS was always a key part of their income stream. So, with SMS declining, the loss of roaming charges in the EU, and potential that, as we negotiate trade deals elsewhere in the world post-Brexit, other regions may also drop roaming charges – the mobile networks could see their profits dropping and their future looking a little less rosy than it has been.

So, is the hope for the future of the mobile networks a growth in data usage as a result of the Internet of Things and increasing use of data-based apps? Whilst there are people with high usage due to video and music streaming, the average usage per device is still quite low. Research by Cisco showed that average monthly smartphone data traffic in the UK during 2015 was 1.2 GB.

There are over 50 million 4G connections in the UK, but the lack of coverage (the UK ranks 54th in the world) means that the applications and technologies that would drive data usage struggle to work all the time. That is where 5G, whenever we finally get it, may help the networks as it is likely to prompt surge in data usage. However, the networks face a new challenge in the growth of wifi hotspots – consumers now expect that almost every coffee shop and bar offers free wifi. It is also becoming the norm on many train and coach services. Smart users who consistently connect to wifi wherever available can, on average, reduce data usage by a third.

This creates a challenge as the mobile operators need to make a profit to fund investment – especially in the next generation of 5G networks. The UK’s mobile and data telecoms plans are already five years behind countries such as Japan and South Korea. But if users continue to communicate via apps (both messaging and voice) and use wifi wherever it is available then that can only lead to standard package prices going up to generate the revenues the operators need. Either that or the Government is going to have to fund more of the infrastructure – something that is already happening in many countries.

What does the future hold for the mobile operators? These are the challenges we believe they face, so we wait to see what happens.

Are you prepared for MiFID II?

The implementation of MiFID II is approaching quickly, so it’s important that you know who is affected and how to make sure your business is compliant.

The Markets in Financial Instruments Directive (MiFID) regulates firms who provide services linked to ‘financial instruments’. This includes IFAs, mortgage brokers, credit institutions, corporate finance companies, investment firms and brokers/dealers.

MiFID has been applicable in the UK since 2007, but is now being revised to strengthen investor protection. The 3rd January 2018 will see MiFID II set in. The following must be recorded by financial service companies if they relate to an actual or possible transaction:

  • Telephone calls
  • Electronic communications
  • Face-to-face meetings

Records for these must be kept for 5 years (in some cases 7 years) or for the duration of the client relationship.

Commodities companies that were originally left outside the first MiFID will now be covered. This also applies to insurance brokers who take cover products with an ‘investment element’.

Customers who are affected by MiFID II may need to upgrade their telecoms systems to support recording of fixed and mobile calls. Affected firms have a number of options, depending on their existing set-up:

Landlines/SIP

Landlines – no system

You can now record phone calls via cloud-based providers. If firms choose this option, they may need to consider switching to an FCA-compliant VoIP provider, as it is the most cost-effective choice.

Phone system with landlines or SIP

  • Firms can add an on-premise call recorder. Some SIP providers offer cloud recording. But, firms would need to make sure that it’s FCA compliant and check storage costs.

VoIP/Skype for business

  • Firms will have to ask their supplier for written confirmation from their legal/operational teams that the call recordings are FCA-compliant.
  • Many VoIP providers only use Wav files and don’t offer FCA-compliant recordings. Firms will need to find out how long calls are stored for and the costs.

Mobiles

Mobiles are slightly more difficult. This is especially the case if the firm’s employees use SMS. There are still a number of options available.

  • Firms can ban mobiles. It’s a simple solution but it reduces productivity.
  • Mobile clients could be added. All recordings would be in one place, but SMS would not be recorded.
  • Firms could switch to recordable sims. This would allow the recording of calls and SMS. However, it would mean being out of contract on their current mobiles.

Financial services firms will have to make sure they assess how they are affected by MiFID II. This will also need to examine how they can comply with new regulations. But, suppliers will have to make sure they are meeting the new needs of affected customers.

 

Reflection on 36 Years in The Telecoms Industry

On October 1st 2015 I completed 36 years in the Telecoms Industry. On that day in 1979 I turned up as a Trainee Accountant to start work with Post Office (Telecommunications). That predates BT, Buzby and Maureen Lipman adverts about ‘ologies.

At that time never mind no email, internet or mobile phones we had no voicemail, PCs or push button phones. Call transfer meant passing over the handset. They were just introducing electronic exchanges but there were still plenty of the old noisy Strowger exchanges housed in multi story buildings. There were thousands of operators manually connecting calls.

In a generation and a bit that has all changed or has it.

Mobile phones started as bricks, got so small you could barely read the screen and now are expanding again to a size they don’t fit in a top pocket. Although the days of your mobile lasting 5 days on a single charge seems to remain a dim and distant memory.

You can now buy phone lines from hundreds of companies but still have to wait for a BT engineer to turn up – maybe.

Fibre broadband is rapidly reducing the costs for businesses connectivity enabling the growth of technologies such as SIP and VoIP. Trouble is the priority areas are residential so people can watch Netflix. Large swathes of central London still only have slow bog standard ADSL.

Some things don’t change – I recall working on a project in the 1980s to use artificial intelligence (then called expert systems) to reduce telecom fraud and although the techniques may have changed it remains an issue of which many companies fall foul.

Sadly also the growth of suppliers and increase in technology complexity has inevitably led to the growth of scams and tricks that less scrupulous companies have used to fleece unsuspecting businesses. Ofcom has now started to levy some fines but still a lot to be done.

With the accelerating rate of change probably what has taken 36 years to occur will probably now be repeated in less than 10. Certainly that is when BT has announced ISDN will have ended and maybe just maybe my phone will last over a day on a single charge. But that might be expecting too much

What Will the Telecoms Market Look Like in 2015

So we are just over one month into 2015 and it is already looking like it will be an interesting year in the telecoms market. Apple have managed to start two more law cases so no change there. They have also announced record profits. The CEO of Blackberry has demanded developers should be made to produce apps for his devices. Bit of a Stalinist approach to the market – you will build them even if no one wants them. This from a company that would never let anyone near their software – chickens coming home to roost.

Then it looks like all change in the UK mobile market with BT buying EE and O2 merging / being bought by 3. So what will this mean to consumers and businesses over the rest of the forthcoming year. It does always assume that Ofcom will allow there to be only three mobile operators in the UK when they have publicly stated they want four. An interesting challenge for the new head to find in her already bulging in-tray. I think she will allow it given the number of MVNOs that now exist who will be classed as quasi operators. After all you can pick up a mobile contract with your weekly shop in Tesco’s who often offer very cheap sim free phones with clubcard points thrown in.

It was all started by BT wanting to join the quad players (phone, broadband, mobile and TV) in the residential market. Following the launch of BT Sport they were just missing the mobile element having got rid of O2 many years ago. Having decided they didn’t want them back and EE were a better bet, they would be in a position to compete with Virgin. Sky have quickly responded with an announcement that it will launch a mobile service next – surprise surprise in conjunction with O2.

That leaves a few companies sitting on the edges of the dance floor looking at who’s left to partner up with before the evening is over. Most notably TalkTalk and Vodafone is that the next marriage made in heaven or would it be out of necessity?

That potentially would create four companies targeting the quad play domestic market in what is a price sensitive market and probably in a race to the bottom. The domestic broadband market is evidence of that where prices and one could argue service/product quality has fallen dramatically.

With all this focus on the domestic market both in terms of time and resources will the business consumer suffer. For the suppliers which will be the most lucrative to focus on – that will determine their priorities. For some businesses the potential of a single supplier may be attractive whilst others on principle do not like all their eggs in one basket. It should be noted that integration will take some time and businesses anticipating a single contact point for faults will be disappointed. BT do not offer it yet so expecting them to merge EE’s support into their existing centres quickly is being a tad optimistic.

Also of interest will be how the cultures and approaches of the combined companies in the various merging will work out. For example 3 have been ahead of the market in extending the mobile packages to overseas countries without charge. I am sure some companies with large roaming bills would welcome this change as the business providers continue to make large portions of their profits in this area.

Certainly I think businesses should be wary of making long term commitments until the dust has settled and they know what and more importantly who they are signing up with. The company they sign with may look very different by the end of the year.

SIM only, Sharer or Individual Contracts – Which is Best for your Business Mobile Service?

SIM only, Sharer or Individual Contracts – Which is Best for your Business Mobile Service?
There are now a range of different options for organisations when they source their mobiles. Not all will be advertised as the networks would prefer to get you on two year contracts where if you add a handset at a later date that is on its own two year deal and you end up in a loop.
There are alternatives and this blog discusses the pros and cons of each option and the tricks to watch out for before you sign.

Sim Free
One month rolling sims are now readily available offering flexibility to companies with varying levels of requirements in terms of number of users. Unlimited calls and texts with 2Gb of data are available from c £22 a month. Lower usage packages are available for c £10 a month. The advantages are flexibility and absence of a 2 year commitment. The downside is that there is no hardware fund to buy new phones, but the cost of SIM free handsets has dropped significantly on the web. If you already have unlocked phones it could be ideal. You could also use it if you have some people out of contract as an interim measure to align all the renewal dates

Sharer Contracts
Sharer contracts are ideal if you have a lot of users with variable monthly usage. Nowadays you can share minutes, texts and data across each handset. So if one user is high then it can be offset by someone who is under. It avoids concerns over excess usage charges. It can be cheaper than buying unlimited deals for everyone. It is important to ensure that you get a coterminous contract whereby you can add additional users without extending the original contract date. These deals will come with a hardware fund, always ask for the price the handsets will charged for against the fund and check against online prices. If you can buy the handsets you want cheaper online then ask for the fund in cash. Normally you need at least 6 – 7 handsets to make sharer contracts cost in although it can vary depending on usage.

Individual Contracts
The final option is to have a company account but with an individual contract for each user. This gives the flexibility in terms of start and stop dates and still gives a hardware fund. The collective buying power should mean a better deal. But do not buy the same service for everyone. For example not everyone needs unlimited everything. Some users may be very low usage so buy accordingly. The group account will mean free calls between users if you don’t have unlimited packages. This works well for smaller companies with just a few mobiles who need help with financing new handsets.

In either of the last two options if you take a handset as part of a deal do try and ensure it is unlocked or at the very least get written confirmation it will unlocked for free on the last day of the contract. Also if you take a handset as part of a deal at the end of the two years ensure your payments are reduced then if you do not negotiate a new contract. What the mobile companies find very useful is that when the contract is up the same payment continues after the phone has been paid for. In fact a recent report http://www.telegraph.co.uk/technology/mobile-phones/10827082/Britons-waste-1bn-paying-for-phones-they-already-own.html estimated that in the UK alone that £1 billion was being wasted on payments for phones that had already been “bought”.
If you like any advice on what is the most suitable solution for your business then please contact us at 020 8912 0845 or info@equinox.uat.3mil.co.uk for some free impartial advice.

Should You Pay for Customer Service

Yesterday EE announced that if you want to jump the inevitable queues in their customer service you can do so but it will cost you 50p http://www.bbc.co.uk/news/business-28790807

This to me is wrong on so many levels. Firstly it says they cannot be bothered to just have enough staff to deal with the enquiries they are getting and provide a reasonable level of service to everyone.

Secondly it suggests that they have many issues with processes, billing, faults etc that they have not fixed that are generating the calls in the first place. Again rather than address the cause they will make customers pay for something that is not their fault.

Finally it is creating a two tier service between those that can pay and those that can’t. Whilst I would want to draw too many parallels with the NHS and private health care as at least in that case people have a choice in how they spend their disposal income. What EE have done is introduce something that was not in their contract at the beginning and until that contract ends they cannot move to another provider that treats all customers equally.

What would happen if everyone in the queue opted to pay the 50p then they would all stay where they are, maybe then they would introduce a super premium service

That is to say I don’t have a problem with companies that often different tier products eg the various coloured American Express cards that come with different costs and different features bit.ly/1sWJXzT

What do other people think – is paying for basic customer acceptable?

The Mobile Industry – who is history and who will be?

 

Seven years ago most people used either a Blackberry or Nokia as their mobile device.  They were the two hottest telecoms companies of the day. Blackberry had a market capitalisation of over $50bn, whilst Nokia as a whole was valued at $150bn. Move forward to today.  Blackberry is almost in freefall with poor takeup of recent product lauches, whilst Nokia was snapped up by Microsoft for $7bn and soon its name will disappear from the mobile marketplace.

The death knell was sounded when the iPhone arrived and Blackberry was too slow to react.  Mike Lazaridis, who was then co-CEO of Research in Motion, was asked in 2007 about the threat from Apple’s phone. “How much presence does Apple have in business? It’s vanishingly small,” was his reaction, and he was dismissive of the idea that anyone would want a phone without a keyboard.   The response from Nokia’s executives was similar.  Only in recent times have they given up on the Symbian software and moved to windows based devices.

So, is anyone ready to predict that in six years Apple and Samsung will have fallen from grace in a similar style? Of the two who has the most to fear? Well Samsung have become the market leader and Apple’s recent releases have not perhaps had the wow factor of a few years ago.   This is highlighted by the fact that for the first time Apple are offering trade-ins to encourage people to upgrade. But Samsung latest release resulted in dismissal of their leading designer.

Since Steve Jobs died there have also been software issues, notably the maps fiasco and reports of blue screening with the IPhone 5S.  The IPhone 6 launch brought forth stories of devices bending in pockets, heavy memory usage and even pulling women’s hair out. Can the price premium be sustained? And, if they are forced to cut prices, will that reduce the resources needed for the vast amount of marketing they undertake to create the brand people desire? It certainly creates for an interesting 2015.

The fastest growth of 2014 was in sales of Windows phones. Microsoft is focusing on the telecoms market with its acquisitions not just Nokia but also Skype. With sales of Lync also expanding – they can make a challenge in both the fixed and mobile space. Samsung also play in that space but it is an area where Apple is weak. As devices become more integrated could that be a chink in the armour.

Will 4G Be Undermined by the Growth of Free Wi-Fi

2014 saw the increasing rollout of 4G, with more and more cities being added. EE have the largest coverage in the UK with the other networks starting to catch up.

This represents a large investment by the companies, which is in addition to the £2.3 billion already paid for the licences.   But I wonder, will it yield the expected benefits for the operators?

Most people will need to upgrade their phones to take advantage of the service, which is not cheap.  EE’s service costs over £40 per month for several GB of data which a couple of hours of video will soon use up.  The different carriers are offering various incentives to sign with them

The challenge for the 4G operators is the fact that free Wi-Fi is becoming ever more available. Even the mobile providers are in on the act as Vodafone and O2 users now get free Wi-Fi on most of the central London Underground.

It is almost impossible to walk into a coffee shop and not get free Wi-Fi.  Many other places are similar and Time Out helpfully provides a guide to hotspots in London http://www.timeout.com/london/things-to-do/where-to-find-free-wi-fi-in-london-9

It is not just in London. I saw a bus in Oxford last week offering free Wi-Fi on board and it is pretty standard too on trains, in first class.

So if there is all this free Wi-Fi about, which from my experience is generally fast enough to watch things such as iPlayer, why would I pay £500 a year on my mobile to get 4G?  I’ll be interested to know what you think. So please do add your comments below.