MWC 2011: Survey Says Smartphone Profits in Peril

Poor customer support produces surge of helpdesk calls and no-fault returns, limits consumer use of advanced features

February 14, 2011

2 Min Read
MWC 2011: Survey Says Smartphone Profits in Peril

Phones may be getting smarter but the customer service for the smartphone market is not keeping pace, and that reality could mean the smartphone boom becomes a financial bust for wireless service providers, according to a new survey conducted by Heavy Reading for Amdocs Ltd. (NYSE: DOX). (See HR Survey Backs Better Smartphone Support.)

The survey of 55 wireless network operators shows that more complex smartphones generate more consumer calls to customer support, and those calls last longer and are more often escalated to higher-level -- and more costly -- support personnel, says Ari Banerjee, senior analyst with Heavy Reading. The survey also showed almost one-third of respondents reported that between 10 percent and 25 percent of their customers return smartphones, and a substantial number of these are no-fault returns (where nothing is actually wrong with the device).

Wireless network operators want consumers to be able to make full use of their advanced phone features, he adds, to increase data usage and generate more revenue for them. But the survey showed two-thirds of consumers are not using advanced features because they aren't aware of them or can't figure out how to use them.

The combination of higher support costs, lower-than-expected revenues from advanced services and device subsidies could make the smartphone boom a financial bust for operators, Banerjee warns.

"Service providers need to own the problem and decide what they want to do," he says.

One option -- outsourcing support to smartphone makers -- has some support within wireless network operators because it helps control costs, but it is also controversial, since the wireless network operator is surrendering control of the customer experience and may come to regret that decision, Banerjee says.

Amdocs, which sponsored the survey and is releasing it today at Mobile World Congress in Barcelona, believes network operators need to control the customer experience, and manage it across the different channels, which include retail stores as well as online and customer call centers.

"Service providers have to spend more time training their agents," says Scott Kolman, director of product marketing for Amdocs. "They need to offer a higher level of support at every channel."

Amdocs' challenge is to convince service providers that offering a consistently high-quality customer experience will also require back-office systems that present the CSPs with a complete picture of the customer, whether that individual is standing in a retail store or calling into customer support, so that customer relationship management (CRM) can be more effectively provided.

"They need to understand who the customer is, their relationship with you, the operator," Kolman says. "Understanding past history is really critical; it's not a nice-to-have, it's a must-have."

— Carol Wilson, Chief Editor, Events, Light Reading

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