UK operators need to brace themselves for a 20% increase in smartphone customer care costs over the next five years, while service providers in Germany and the US face increases of 17% and 13% respectively over the same timeframe.
The finding comes from new research carried out by AetherPal, a small company based in New Jersey with technology that is aimed at lessening the customer-care burden for operator clients.
Table 1: Company Snapshot: AetherPal
||Enabling customer service through smart care
||Raised $6 million in Series A funding from investors New Venture Partners and Point Judith Capital in November 2013
|Headline customers/key accounts
||AT&T, EE, Vodacom
|Favorite movie (of Paul Gracie, vice president of EMEA)
||Master and Commander
AetherPal reckons costs are spiraling as devices become more complicated and smartphone adoption proliferates. Only yesterday, UK mobile giant EE , which already makes use of AetherPal's services, revealed that more than 40% of its 22.36 million mobile customers are now using high-end 4G handsets. (See EE Flags Worst Postpaid Growth in 2 Years.)
The fragmentation of the Android operating system is a further customer-care headache for service providers, according to AetherPal.
If the company's prognosis is correct, operators in the UK market (currently four) will have to spend an additional £60 million ($91 million) between them on addressing subscriber needs between now and 2020.
In Germany, meanwhile, operators will need to find another €85 million ($93 million) for customer care over the next five years, while US service providers face a collective increase of $200 million in expenses.
AetherPal arrived at its numbers by running forecasts on data that operators have been willing to share. According to its research, the average cost of a customer care call currently works out to about $7 across the three markets of the UK, Germany and the US.
The company simply multiplied this figure by the number of calls that operators are receiving annually to generate estimates of today's costs.
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AetherPal already provides a remote-control service allowing customer care agents to take charge of a customer's device so they can identify and potentially fix a problem. But it is set to launch a new self-care application on May 6 it believes could mitigate the entirety of the cost increases it is forecasting.
The technology has been designed to integrate seamlessly with operators' own "My Account" apps and should help customers diagnose technical problems without recourse to a customer care advisor.
If, for instance, a smartphone user were unable to obtain a 4G signal because of a local network problem, AetherPal's technology could notify the customer through the operator's "My Account" app, obviating the need for a phone call to rule out a device issue.
The company says the new service has attracted interest from existing customers -- which include AT&T Inc. (NYSE: T) and South Africa's Vodacom Pty. Ltd. , besides EE -- and that it is also in discussions with most Tier 1 operators in Europe.
"We're looking to enlarge our market [with the self-care service]," says Paul Gracie, vice president of AetherPal's EMEA division.
Acknowledging the market for these services is growing increasingly busy, Gracie thinks the combination of self-care with AetherPal's existing remote-control service will give the company a unique offering.
"We can provide a beginning, a middle and an end," he says. "We'll be able to offer the self-care app, tutorials, event logging, big data capabilities and integration with customer-care center tools."
Indeed, a major attraction of AetherPal's technology could be its use of big data analytics to provide insight to operators on customer-service issues.
Repeated notifications about the lack of a signal in a particular area might alert an operator to a network outage, for example. In some cases, the operator could take remedial action even before being contacted by disgruntled customers.
Moreover, because AetherPal's technology is integrated with "My Account" apps, it could help operators to promote their own services.
With various operators still trying to develop their own self-care tools, AetherPal's real challenge may lie in overcoming resistance among service providers to the use of third parties, but Gracie is optimistic the tide is turning.
"Sometimes when it's not your core business you should concentrate on what you do best," he says. "More operators are coming to the conclusion they'd be better off working with us."
— Iain Morris, , News Editor, Light Reading