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How To Make Happier Wireless Customers For Increased Profitability

I had the opportunity to moderate a panel discussion with the leaders of SkyPeak Technologies on April 6th where the topic was:

“No One Cares About Your Network Speeds (and Other Industry Myths)."

We covered a lot of ground and learned some interesting perspectives on what wireless and MVNO customers might really want. A transcript of that interview is further down below but you can also watch the interview embedded below or here.

JON: Good morning, everybody. Welcome, thank you for joining us today. I am Jon Horovitz, the founder and lead consultant for Atrium Unlimited Consulting. We are a consulting firm that focuses on wireless business, mobile technology, and MVNOs. Thanks for joining us today.

We're here with the team from SkyPeak Technologies. SkyPeak was founded in 2020 with a mission to decrease data consumption and costs for mobile operators and enterprise consumers of satellite data through the progressive idea of on-device smart content shaping. Their flagship product, CORA Mobile Edge on-device technology right sizes data-intensive content for smaller mobile devices and effortlessly saves data bandwidth and energy while delivering up to ten times more streaming video content.

Joining me today are Cat Coughran-McIntosh, CEO and Co-founder of Sky Peak Technologies, Don McIntosh CTO and Co-founder, and Michael Baldwin, Head of Global Sales. So today we're going to be myth-busting. I've asked the SkyTech team to share with us the top industry myths that they've observed in the three years that they've been working closely with MVNOs and regional operators. So, can each of you share one big myth you've learned about the industry? Cat, why don't you kick us off?

CAT: Absolutely, Jon. Thank you. My biggest myth that I've learned is networks are all talking about speed, but subscribers don't care. They want phones that work, streaming video, and good battery life. But operators are marketing network speeds, and customers just have different priorities.

JON: Interesting. Don, do you want to add to that?

DON: The myth that video streams are hurting your business. Subscribers want more streaming content, and operators need to learn how to use that to their benefit. And there are right ways to go about that for delivering more of that content with less impact on your data. Bandwidth and network traffic allows you to keep the current subscriber base and actually grow it, which is a very attractive thing to operators.

MICHAEL: I think the myth I've seen out there is that rate reductions are the only way to make subscribers happy. Happier subscribers and increased profitability are not mutually exclusive, even though they seem to be general thought in the industry.

JON: Wow, those are some great myths. So let me ask, Cat, why do customers leave a carrier?

CAT: Well, the number one reason, according to the surveys that we've been able to pull together, the top reason is price. They're looking for cheaper plans, but also coverage. And then the data that they get for that price is very important as well. And then there's a handful of smaller things in there. Price wars, however, are a slippery slope right down to the commoditization level which is not good for the industry, and quite frankly, it's not good for the subscribers as well.

The other way to look at this, however, Jon, is how do you keep customers? Operators spend a lot of time worrying about the at-risk subs. But even satisfied subs leave. Some studies show that up to 61% of subscribers say that they're satisfied, but still churn anyway. So, yes, price coverage plans should be buttoned up, but owning the hearts and minds of your customers is the way to keep them from switching over in a commodity like fashion.

JON: It's always been said that it's expensive to attract a customer, but even more expensive to retain them. So, Michael, what does subscriber retention really do to a carrier or MVNO's profitability?

MICHAEL: Well, it's no secret. Rates have been driven down because of competition, therefore driving down profitability. The lower rates contribute to churn as subscribers shop the market. It's a vicious cycle. Mobile providers need to have value-added features that will differentiate their service and they need new revenue streams to replace the revenue loss from lower rates. Adding value decreases the churn and therefore increases profitability. And the more personalized service that an operator can offer their subscribers, the less likely they are to leave for another provider. According to Harvard's Business Review, a 5% increase in retention can really move the needle.

JON: Interesting. Don, is there a magic bullet, as they say, to deliver what subscribers want? And if there is, what is it?

DON: Well, from a delivery perspective, it's video content. Video content is king. Much like the transformation that the music industry saw when the iPod was introduced, the consumption point of streaming video is becoming more and more personal. Video is moving. It's mobile now. It's not just on the big screen TV. So there's a significant transition there. This video is taking up space on the cellular networks. Total global mobile traffic will quadruple in the next five years. According to Ericsson’s Mobility Report, this is absolutely driven by data intensive streaming video content.

CAT: I think a really interesting quote that I just came across, Jon, was from Meta, Facebook, and Instagram's parent company. They have gone so far as to say, and I quote “Investment in content literally drives revenue and business for the telecom operators,” which is completely different than what the telecom operators, how they feel, the MVNOs, and even the regional carriers. We all know that the over delivery of data intensive content is creating a burden for operators. And that is where the dilemma lies. Delivering the data intensive content that your subscribers want, while minimizing the impact of this content on your operations and your costs, and your performance. This can be done, however, by right sizing data-intensive content for the mobile device form factor.

JON: So, it sounds like you're saying that if operators can find a way to deliver the streaming content their subscribers want, they'll be on their way to a happier subscriber and increased profitability. How can they make that happen?

DON: In our experience, innovation is the key to this. You can't do things the same old way and expect different results. Right? Subscribers want innovation from their operator. They want their hearts and their minds won. And they want this through enhanced innovation from their operators. Be bold and implement innovations that are out there today, forward thinking, and ask for innovations that will help you deliver what your subscribers want tomorrow. One of the biggest innovations we're pioneering on device is smart content shaping. Imagine being able to offer the subscribers up to ten times more streaming content by simply downloading the operator's app. No ads to watch, no surveys to take. Just more streaming video content for the same or less data than before.

CAT: Yes. And on-device, smart content shaping also conserves bandwidth and energy, too. Being innovative in both technology and marketing increases the average profit per user. APPU, as I like to call it, is really where the focus for the operator should be. The more profitable an operation is, the more resilient it is to competition and uncontrollable market forces.

JON: All right, so now we have APPU, a new acronym to go with ARPU. Thank you for Cat for doing that. So let me get this straight. Are you suggesting that innovation can facilitate retention and therefore lead to profitability?

MICHAEL: Absolutely. Subscribers want to feel valued, heard, and they matter to their mobile operator. And being able to deliver what they want through technology and marketing. Innovation creates loyalty, which is much stickier than satisfaction. Loyal subscribers stick around for generations.

JON: Well, from what I'm hearing, then, happier subscribers and increased profitability are possible.

CAT: Yeah, definitely. And thank you, Michael, for that line. That just gives me goosebumps when I think about how generational subscribers can stay. And that's what we all want, right? Is that increased loyalty? And you can get that if you ask your subscribers what they want, listen, and then use innovation to deliver. You can give them what they want. Increase your operations, APPU at the same time, and everybody wins.

JON: Wow, that's incredible. Well, thank you for that. That was a lot of information in a very short ten-minute time. We have the opportunity now for some of our folks that are out there listening to ask questions of the SkyPeak team. We're going to open it up for Q and A.

JON: Well, here's a question that just came in. Is streaming content really that bad? With an emphasis on that. Can I rely on my carrier's TTMS to save data for me?

DON: How many subscribers know what a TTM is to begin with? So, video is 80% of the traffic that mobile operators see on their networks nowadays, which has been a significant sort of explosion in where bandwidth is allocated. And it's a growing number. I think it's already somewhere around 80% of the data footprint that users consume on a monthly basis. And that amount is supposed to quadruple, I think, by 2027 in the year that we saw in Ericsson’s Mobility report. So it's a new phenomenon. You think about streaming video over your large-screen TV, normal stuff. This is a relatively new thing, and it's becoming more and more not just popular, but demanded by subscribers. So, yeah, it's putting a lot of pressure on the operators to allocate more bandwidth to video and find more spectrum resources, energy, so on and so forth, to increase that traffic on their network and service it.

JON: How do I know to personalize my promotions without compromising my subscribers privacy?

CAT: Yeah, absolutely. That is one of the top things. So the best way to do that is through using anonymized behavior intelligence understanding what groups of users are looking for instead of individuals, instead of drilling into exactly what one person wants. Look at people in a group. Look at people from a perspective of are they discount minded? Are they always looking for the cheapest plan? Are they heavy streamers? Do they love to watch Netflix? And you can learn all that through on-device content shaping, because it's going to feed you back the information in an anonymized way. It's going to be the overall group of, let's say, the discount plan seekers, and you can use that to tailor what they're looking for. How much time do they spend streaming content? Are they heavy streamers, light streamers? Are they on Amazon, Netflix, YouTube? You can gather all this information in a way that is focused on the group and not on the individual, and therefore, privacy is not compromised. But you still have a level of intelligence based on other behaviors that you know from your relationship with those subscribers.

JON: Here's one that I think that everybody faces in this day and age, my team is already stretched thin. How can I utilize what you've shared with us today without burning out my team even more?

CAT: Well, you need extra hands, right? And you need it in a way that doesn't cost a ton of money. Right? So I know that bringing in consultants and advertising agencies and all of that it's expensive. So that if you it's kind of like the same way we save energy and bandwidth. We distribute it out there. So what if you were able to bring in a resource that brings you marketing playbooks, brings you the communication channels that you need with your subscribers and the technology to go along with it to right size this data intensive content to fit the phone and then get it out there quickly and easily through the app system. Put an SDK attached to your mobile app, send it out. It can be that easy. Push of a couple of buttons and then your subscribers are on their way to saving data when they stream videos, and they're happier and you're more profitable.

JON: So invest in bringing in additional people and at the same time, use technology to make things simple for them to execute. Very good. You said content is king. All I hear about is 5G driving the telecom industry. Isn't 5G the king?

DON: I'll do my best to fill that one. So, 5G certainly occupies the press. I think there are mixed results in terms of what 5G is actually delivering, other than just more bandwidth and consuming more energy to deliver the same content and encouraging people to consume more data. Even though that's in the press, the thing that's in the minds of subscribers is content. And again, 80% of that is streaming video. And it's mobile now. It's not just stationary on the big flat screen like it used to be. It depends on who you talk to, whether it's the press and the talking heads or the subscribers that make the financial decisions for your services.

CAT: I was going to add to that one thing. The streaming content industry is huge, right? It's like $120 billion. I don't have the stat right in front of me right now, but it's growing. And that's being driven by two things. The content providers themselves that are making all this amazing content and the subscribers demand for it. The thing that's really killing the operators is the network. It is the 5G that's being able to deliver 4K video to a five-and-a-half-inch screen, which is completely a waste of resources and choking the operators out there. So I think the thing to really look at is this isn't going away. There's a huge industry around it. There's a demand for it from the subscribers. We as operators need to figure out how to manage it to our advantage and step into this stream of this supply chain and own our piece of it, instead of just being victims of it.

JON: How do MVNOs make the best use of new technologies?

MICHAEL: Well, I think the key there is when you do find that innovative product that you can bring in to help retain and attract customers is make sure that vendor that you're dealing with is willing to partner with you. No one knows that product better than they do, and they should be willing to learn your business so they can see how to integrate that in.

JON: Okay. You talked briefly about differentiation, Cat, and that's what I talk about all the time, and you said, you've got to be different. Why would I leave my current provider to go to your MVNO? What's different about you that I'm going to make that change and make that commitment.

Okay, so I think that's all the questions that are out there. I just want to thank everybody here, Cat, Don, Michael and everybody at SkyPeak for joining us today and giving some insight. Really important to dispel some of those myths out there and look at the new technology that can make the MVNOs and the carriers profitable, while giving their customers what they want and making them happy.

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