Beating the downturn -– back to basics

MELBOURNE, AUSTRALIA: Ovum, the global analyst and consulting company, advices on how mobile network operators can beat the downturn.

The Ovum report: 'Mobile operators in a recession: lessons and coping strategies' presents strategies that mobile operators around the world should adopt to beat the economic crisis.

Although the picture for the Asian mobile services industry is one of resilience, it would be a mistake to conclude mobile network operators are having it easy. Operators are suffering from reduced roaming revenue, declines in usage and spending, and currency fluctuations. So what can be done to thrive in this environment?

“The downturn intensifies the imperative for operators to get the basics right -- plan ahead, evaluate risks, and cut costs -– while treating the customer as king” said Nathan Burley, Ovum Analyst.

The economic downturn means those carefully prepared three-year-old plans are probably outdated. Now is the time for mobile network operators to reassess their core strategy. MNOs should ask themselves: Who are our customers and how much longer will they sustain their telecoms spending? Should we dispose our non-core assets? How will we adapt to new competitive threats?

This is the time to plan for the unexpected. How much operations can be sustain with reduced capital expenditure? What will happen to your profits if governments impose new taxes? What about increasing unemployment?

Slashing discretionary spending, trimming jobs, sharing networks, outsourcing network operations, streamlining supply chains and renegotiating dealer contracts.

“Although, while the temptation is there to cut marketing costs, this is no time to abruptly slash the marketing budget,” advised Burley. Customers need to know about all the good things MNOs are doing. “The recession may also open cheaper marketing opportunities, such as lower media costs, and MNOs should exploit those.”

Additionally, although this has always important, customer facing units must place a renewed focus on meeting and exceeding their customer needs. In an industry where churn is accepted as normal, now is the time to focus on holding on to customers. Good customer relations are a priority and this is the time to understand customers better — their wants, preferences, and spending habits.

During this downturn, MNOs need to empower their customers by offering them value-based products and services. “Low-cost providers in Asia have already mentioned the ‘positive’ impact of the downturn”, concluded Nathan Burley.