Eurobites: Telcos Offering Less Than Zero-Touch Service, Says Ericsson Report
News Analysis Paul Rainford, Assistant Editor, Europe 5/14/2018
Also in today's EMEA regional roundup: speculation over possible BT sale prep; VEON, Vodacom report; Virgin and TalkTalk joining forces?
Telcos are dragging their heels when it comes to using new technologies such as AI and analytics to improve the way they interact with their customers, and risk being completely left behind by online giants such as Amazon and Apple. That's the conclusion of a new report from Ericsson AB (Nasdaq: ERIC), The Zero-Touch Customer Experience, which conducted around 7,000 online interviews with users across seven markets in Europe, Asia, South American and the US. Forty-six percent of those surveyed think that their service provider "hides behind 'bad' technology, such as do-not-reply emails, automated replies and time-consuming and impersonal Contact Us forms." To improve matters, and to receive more timely and efficient service, consumers now expect service providers to "move beyond chatbots and into intention detection," perhaps using biometric and voice authentication as part of their armory.
Could the recently announced swathe of redundancies at BT Group plc (NYSE: BT; London: BTA) be part of a plan to sell the company -- possibly to Deutsche Telekom AG (NYSE: DT)? That's the theory being expounded in Business Insider France, which quotes at length an unnamed source who has worked at the operator for more than a decade and is unimpressed with many elements of its back-office infrastructure. Describing the CSS mainframe on which the main company database resides, the source says: "It was old in 1998. You had to log in via a special terminal, via special text. No one has ever tackled it. Somebody new buying the company would just go, 'let's scrap this piece of shit.'"
VEON , the Amsterdam-based but Russia-focused operator, saw full-year revenues slip 1.4% to US$2.25 billion in the first quarter, a fall it attributes mainly to the devaluation of the Uzbek and Pakistani currencies. In "organic" terms, however, revenue grew 3.2%. Likewise, reported EBITDA (earnings before interest, tax, depreciation and amortization) fell 0.8% to $854 million, but rose 6.3% in organic terms, driven by a strong performance in Russia, Pakistan and Ukraine.
Full-year earnings at South Africa's Vodacom Pty. Ltd. saw group revenue grow 6.3% to 86.4 billion South African rand ($7.04 billion), while group EBIT climbed 4.4% to ZAR23.1 billion ($1.88 billion). A net profit increase 18.6% was partly driven by the acquisition of Kenya's Safaricom and the sale of Helios Towers Tanzania. On the strength of these results, Vodacom is reaffirming its three-year targets of mid-single digit service revenue growth, mid-to-high single digit EBIT growth and capital intensity of 12%. (See Eurobites: Vodafone Shifts $2.6B Stake From Safaricom to Vodacom.)
UK cable operator Virgin Media Inc. (Nasdaq: VMED) is discussing a network-sharing arrangement with broadband and TV rival TalkTalk , according to a Telegraph report. TalkTalk has been desperate to lessen its reliance on BT's infrastructure, and in February announced plans to form a £1.5 billion ($2 billion) joint venture with Infracapital to provide fiber connections to more than 3 million homes and businesses in mid-sized towns and cities. (See Eurobites: TalkTalk Forms JV for £1.5B Fiber Foray, Eurobites: Virgin Media Poaches TalkTalk's Fiber Guy and Eurobites: Virgin Cuts Jobs in Wake of Fiber Rollout Ructions.)
— Paul Rainford, Assistant Editor, Europe, Light Reading
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