Swedish Startup Is Helping Telia Automate Device Care for Customers

Sweden's Telia is rolling out a new software application that predicts when a smartphone is about to malfunction and advises the customer to take remedial action.

Developed by a Swedish software startup called eBuilder, in which Telia has taken an undisclosed stake, the technology uses machine learning to identify problems at an early stage. Based on analysis of customer data and preferences, it can also make tailored recommendations to customers about device upgrades.

Telia reckons the technology has the potential to improve customer loyalty and lower operating expenses by reducing the number of calls made to its customer service centers, each of which costs between €5 ($6) and €10 ($12), says Gustav Berghog, the product and commercial director of Telia's Swedish business.

It could even lead to new revenue opportunities for Telia in a highly fragmented device repair market potentially worth about 2 billion Swedish kronor ($250 million) a year, says Berghog.

In a related move, Telia has already bought a device-repair specialist called LanMaster focused on Apple devices and is partnering with another company that services Android devices.

Under its own branding, Telia has been offering the eBuilder app to customers only since the beginning of this year and has so far seen about 100,000 app downloads.

Although that represents only a tiny fraction of its overall customer base -- with Telia serving more than 6 million mobile customers in Sweden in 2016 -- there are already some positive indicators, says Berghog.

While Telia's net promoter score (NPS) averages 1, for example, it is up at 29 among users who have downloaded the app, on a scale where 100 means outstanding and -100 is appalling.

According to data that Telia and eBuilder have released today, app user "engagement," measured as the percentage of push notifications to which customers respond, is about three times the industry average at a "click through rate" of 67%.

What is also striking is that customers of other Swedish operators are thought to account for about 10,000 of the app downloads so far. Berghog sees an opportunity for Telia to play the device-repair role for those customers, but the app could also help the operator to lure subscribers from other networks.

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Like various other telcos, Telia is under some pressure to slash operating costs at its customer service division through the automation of processes. In the first half of 2017, its Swedish operation cited pressure on earnings, with net sales falling 2%, to about SEK9.1 billion ($1.15 billion), and operating income down 7.1%, to around SEK2 billion ($250 million), compared with the year-earlier period.

eBuilder's technology could make a difference if it can drive enough subscribers toward "self-care" solutions instead of traditional customer-service channels.

"It's too early to say we've seen clear proof of decreased costs," says Berghog when quizzed about the cost-saving benefits. "But when this is industrialized and within our automated marketing systems I see possibilities -- we need to scale it more before we see more."

According to Morgan Curby, eBuilder's chief commercial officer, data suggests that about 60% of Swedish customers would rather try to fix problems themselves than rely on external support.

Even so, Telia's ambitions in the device-repair market could force it to maintain some kind of bricks-and-mortar presence throughout Sweden.

By contrast, some operators in other parts of the world have been trying to close stores as their customers increasingly turn to Internet sales and customer-service facilities.

One such player is Russian mobile giant MTS, which has been in discussions about using eBuilder's technology.

eBuilder is also exploring arrangements with Telia in other Nordic markets, including Finland and Norway.

It will not pursue deals with other operators in Sweden, says CEO Leif Bohlin. "Exclusivity right now is more about the Telia investment and that was always part of the strategy," says eBuilder CEO Leif Bohlin. "We needed an anchor customer to start with and in that case we didn't see any problems because the operator market is global and there are enough [potential customers] out there."

Now several years old, Stockholm-based eBuilder currently employs about 150 people, says Bohlin.

One potential opportunity in future is to provide support for other types of device, such as smart TVs, he says.

— Iain Morris, News Editor, Light Reading

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