Could carriers become the switchboard operators of the M2M
economy? Source: U.S. National Archives
Google’s much-hyped Nexus One struggled through a difficult opening week. Some phones were plagued with touchy touchscreens and inconsistent (or nonexistent) 3G connectivity, and users voiced confusion over upgrade eligibility and dual early-termination fees (ETFs). All those snafus led users to try contacting Google (which, of course, sells the phone) — only to be told that answers to their e-mail queries might take as long as 48 hours. If that’s not good enough, Google reportedly told some customers, try HTC or T-Mobile USA. Very helpful, that.
It didn’t take Nostradamus to forecast customer-service snags as Google moves into the very different — and very complicated — world of handset retailing. But last week’s stumbles illustrate just how crucial customer care is in an age when nearly all of us depend heavily on being connected at any time, any place. And they underscore the huge opportunity that exists for carriers to leverage their experience in dealing directly with consumers.
As the carriers begin to evolve from 3G to 4G, they’re becoming increasingly dependent on providing network access for devices that don’t carry their brands. Machine-to-machine (M2M) services provide an opportunity to drive revenues without creating the kind of network congestion that comes with, say, streaming media. We’ll see a host of new connected devices from new e-readers to digital picture frames to smart insoles (yes, really), many of which won’t be available at retailers; instead, they’ll be packaged with larger goods and services like cars, health care, and residential and commercial energy. A consumer with a heart condition, for instance, could have his heart rate monitored wirelessly, while a connected car could constantly track tire pressure, fluid levels and other information. Such scenarios will require carriers to partner with manufacturers and fellow service providers — and they’ll call for the emergence of new business models that give every player in the value chain a place at the table.
But increased connectivity means increased chances of things going wrong. So while network operators are vulnerable of becoming mere pipes in the world of M2M, they also have an opportunity to bring added value to the table in the form of superior customer care. Elaborate business models and multiple relationships notwithstanding, consumers will need a primary point of contact. That point of contact will vary from scenario to scenario — you aren’t likely to call a network operator if the in-dash computer in your new Mercedes has a glitch, obviously — but carriers have a chance to fill the role where no obvious point of contact exists. While manufacturers of connected devices may try to offer customer support when things go wrong, they can’t offer much help if there are connectivity problems. So carriers are beginning to pursue two-sided business models where the leverage dual roles as both network operator and customer-care provider.
The customer-care business is a dangerous space — doing it well can be expensive due to the high overhead of well-staffed call centers, while doing it poorly can be just plain costly (as Sprint can tell you). But network operators not only have vast experience in the space, they also have the technology to avoid those expensive customer-care calls. Carriers can manage devices over the air, pushing device upgrades and notifying customers of changes in service through the network, and can check the status on gadgets on the network remotely. And (theoretically, at least) that connectivity can enable users to get information like device tutorials and account information without requiring anyone on the other end to pick up the phone.
The days of the network operator serving as a kind of lone-wolf service provider are coming to an end, whether the carriers like it or not. To survive, carriers will need to become a key — but perhaps low-profile — component of complicated new business models. Embracing the role of customer-care provider can help them avoid being relegated to devolving into transport companies that simply move data across the network. So while customer service can be an expensive business, it won’t be as costly as letting manufacturers or application service providers co-opt the role.