Bandwidth crunch, net neutrality, differentiated QoS, quality of experience, bandwidth boosts, smart insights… Where do we start? QoS is hot, it’s evolving and, goodness, it’s even controversial! by Teresa Cottam

What is the bandwidth crunch?

One of the very hot topics in telecoms circles today is the bandwidth crunch: never has so much bandwidth been consumed by so many using so (comparatively) few applications apparently – or at least by that merry band of so-called “bandwidth hogs” streaming their YouTube vids.

When you look at the figures they are simply staggering. Not so very long ago a Gigabyte was a lot of data. (To those of you under 25 I know I sound very, very old.) I remember the amusement when we moved to Terabytes and thinking that was an awful lot. But both rapidly and fairly seamlessly we slid into Petabytes.

It’s funny how a Petabyte doesn’t intimidate us – after all, it’s just a number. But to give some idea of the scale  of traffic we’re talking about and the exponential growth:

• in 1993 it was estimated that total global annual internet traffic was approximately 100Tb.
• in 2000 global internet traffic was estimated to be 95Pb per month.
• in 2010 AT&T carries approximately 19Pb of data through their networks each day. While Google processes 24Pb of data per day. Famously, the film Avatar is said to require 1Pb of storage. Internet traffic is now around 21Eb per month and rising rapidly. NB: 1Eb is an equivalent amount of data to running 50,000 years of DVD quality video.

Less than three years ago, I remember reading that internet “brownouts” (as Americans like to call power cuts) were predicted for 2010. At the time a lot of people scoffed at the idea. Yet here we are and we’ve had to ‘fess up to the fact that bandwidth demand is degrading service quality. I bet Carmi Levy is slightly regretful of the postulation that the industry would be able to solve the problem. Of course we can, in theory, the trouble is at what cost? Even the NEPs are now saying that just “chucking” bandwidth at the problem won’t solve it; and certainly won’t solve it in a commercial fashion.

Cisco is now forecasting that in four years global traffic will be 767Eb per year, and even stranger words are entering our vocabulary in the form of zettabytes and yottabytes. So new are these that my spell checker doesn’t recognise them as real words.

Cisco kindly supplied a translation of these mind-boggling amounts into concepts we can understand – 1Yb is equivablent to 250 trillion DVDs or else a holographic snapshot of the entire surface of the planet. Shockingly, Cisco says it would take 72 million years to watch the amount of video that will cross global IP networks in 2014.

Why QoS is becoming meaningless

Maintaining quality of service while the network is being challenged with increasing amounts of traffic – including time-sensitive traffic – has transformed a mild headache into a full-blown migraine for many CSPs. The conundrum is that while QoS has never been so important it is also increasingly meaningless.

What do I mean by that? Well QoS is a network-centric measure of how the network is performing. It’s obviously still very important that the network is functioning, but nowadays service complexity, the behaviour and needs of individual customers, as well as the commercial imperatives of service providers mean that QoS itself doesn’t tell us everything we need to know.

Although the network may appear to be performing perfectly well, individual customers may be receiving a very poor quality of service which impacts on their customer experience. This personalised quality of service is increasingly being referred to as the ‘quality of experience’ (QoE).

Measuring, managing and assuring the QoE is complex and challenging, but can deliver enormous benefits to both CSPs and their customers. To understand the quality of experience received by individual customers, however, requires access to a wide range of data, which then needs to be analysed to deliver a customer-centric and business-centric view of what is actually happening to an individual customer or group of customers.

Understanding the cause of a poor quality of experience means that service providers can deliver a relevant reactive response to complaints; done well and in realtime it means that they can deliver a proactive response before a complaint is received. This helps reduce customer support costs and also keeps customers satisfied and loyal, reducing churn.

Monetising QoE is desirable and potentially lucrative,  but sometimes controversial

A central tenant of QoE is that not all customers or services are equal. Differentiated quality of service means that service providers are able to offer tiered service levels and monetise these (in other words, charge extra for increased bandwidth, priority, enhanced SLAs and so on). A key technology in monetising differentiated QoE is policy control, which helps CSPs make policy-based decisions (in other words, business decisions) regarding traffic, services and customers. When policy control and realtime charging are combined, CSPs can offer new services such as “bandwidth boosts”, which enable customers to opt for temporary increases in the bandwidth they receive or the priority given to their traffic.

Although there is great demand for this from business customers – particularly SMEs – and from  certain consumers (such as gamers, for example), differentiated QoE is not without controversy. In the US the debate over net neutrality rages on, with some proponents arguing that all customers, all services, all packets must be treated equally (as well as less drastic versions of that theme). Over here in Europe, however, the concept of differentiated service quality is far less controversial. We’re far more concerned with whether we’re receiving the service we paid for, than arguing about equality. Ask a European about service quality and they’re more likely to complain that they’re paying for 20Mbit/s broadband and receiving 2Mbit/s. They’re fast learning that they’re only ever going to receive 20Mbit/s at 3am on the third Tuesday of a month with a ‘m’ in it – if they buy a house next to the exchange.

Clarity and choice are what’s important to customers

The ‘net neutrality’ debate in the States seems fairly alien to the average European. The EU and most European governments have generally taken the stance of transparency and customer choice. That is, when a customer opts for a particular service they understand what service level they will receive, and that remedies are in place if this is not provided. The other key consideration is that competition is fair, and companies are not permitted to unfairly compete using their market dominance (eg by degrading the service of competitors).

While on the demand side we might want choice, even in Europe there are already one or two “flies in the ointment”, such as VoIP being banned in Germany. It’s hard to escape the conclusion that this is due to it competing with the dominant telecoms providers rather than because there’s a real QoS impact. This goes against the principles of free trade that the EU is supposedly built upon.

The heart of the debate is how to maintain QoS in the Zettabyte age without the burden being unfairly placed on consumers or telecoms firms – enabling content and search firms to make billions without contributing to the infrastructure they use. Since content providers have no incentive to optimise their content to make it have less impact on networks, under the current system CSPs have to carry the burden of someone else’s laziness.

In this sense, transport of digital goods is like post & package. When you order a product on Amazon you’re given various delivery options from free in three to four days (best efforts) to premium next day delivery. Likewise you’re told what the cost of delivery will be before you order. There is thus inherent cost transparency which is still somewhat lacking  in the digital goods market.

At the moment we’re on “all you can eat” data, although subtly and quietly caps have begun to appear. This means that if you get into overusage you face blockage or extra charges. If content is ‘bloated’ then you’re going to hit your cap and overusage charges that much sooner.

From the CSP’s point of view charging according to usage makes absolute business sense – we have to align cost with demand to prevent waste and to cut out unfair subsidies. Under the current model the low-use silver surfer who does a bit of emailing and skype is subsidising the 24×7 high use demands of a small business or digital native online gamer. Great for those who are using more than they pay for, but it means grannie is paying more than she should. This is a fact that isn’t often aired – that what benefits one set of customers is often to the detriment of others in the form of higher costs or lower QoS.

How this debate turns out is still uncertain. But I don’t think it should be about what’s best for Google, for content providers, or for high-use digital natives. It shouldn’t even be about what’s best for CSPs. We need to ensure that we provide a mechanism that supports continued development of the digital marketplace (which means it has to be commercially viable for all those involved), and that provides clarity, choice, fairness and guarantees for customers. It’s really important that governments stop listening to big corporations and start thinking about what’s going to deliver the best customer and national outcomes. After all, he who has the “best” answer to this question will ultimately have the best networks and business process for a flourishing digital economy.

In the next post in this series we’ll look at how the service assurance market is evolving and being reinvigorated and challenged by personalised quality of experience. To find out what’s happening and which vendors to watch don’t miss ‘Service assurance: the next generation’. (Out soon on a blog site near you!)

It’s one of those things that rarely gets aired in the press – the nitty gritty of software licensing. It’s not rocket science, it’s not particularly exciting, but failing to manage your software licensing proactively means you’re exposing yourself to unnecessary costs.
by Teresa Cottam

Talk to any group of CSPs and they’ll tell you that “running leaner” is important to them. No-one wants to pay more than they have to. Everyone is short of money to invest on all the things they’d like to do. One of the reasons that saving money is no longer the top priority for CSPs is that it’s now a given – just something you have to do.

So why is it that in this cost-conscious environment, you still hear horror stories – and I’m talking screaming-until-your-eyes-pop, can’t-get-to-sleep nightmares – about software licensing? Obviously it’s important that vendors make a return on their investment, and if the margin is too tight then you won’t get the product development and support you desire, but it’s also important for them to play fair with CSPs.

CSPs are reviewing software licensing

No-one should be under any illusions: this issue isn’t going to go away. The only question is how long it’s going to take to fully resolve and whether vendors terminally damage their relationships with CSPs in the process.

CSPs need to “run leaner” – this is a given for doing business in today’s competitive mature markets, as well as in fast-growing markets where market growth will be restricted by operational efficiency (ie addressing the lowest ARPU customers profitably is a factor of how operationally efficient you can be).

We all know this. But this need to “run leaner” means that CSPs are now willing to completely re-evaluate the “norms” of the software business. What evidence do we have for this? Well examples include:

• a BSS study we conducted in which 42% of CSPs we spoke to said they were currently reviewing their software licensing – it was the third most popular cost-reduction strategy. In the same study we found CSPs who were looking into software with a lower TCO, consolidating software, utilising SaaS and employing commercial open source technology (COSS) – all to lower the cost of supporting software.
• research we conducted into COSS software where we found that CSPs were more likely to have adopted it (34%), than the average across  highly transactive industries (18%). Likewise they were more likely to be considering adopting it (20%) than the average across highly transactive industries (9%). Licensing costs were cited as a major contributor to CSPs’ interest in COSS.

CSPs are being over-charged on licensing

Obviously not all vendors are the same, have the same business model, or behave in the same way. But we all know there are some problems with the traditional licence model. One is that licences for some technology have been too expensive for mid-sized and smaller CSPs – preventing them from adopting and benefitting in certain key areas. The cost of a lot of our software has been designed for Tier 0 and Tier 1 operators, not Tier 3s.

We also know that most, if not all, CSPs are being overcharged on licensing – this is true of all large enterprises and so is not just an indictment of BSSOSS providers. But here is an area where the CSP can easily trim cost without affecting operational efficiency.

There are a number of reasons why a vendor might be overcharging on licences, such as:

• ignorance – you have agreed certain licensing terms. You are not optimising use of your licences (eg because you haven’t scaled up yet, have downsized or have shelved use of the software due to consolidation) and the vendor simply doesn’t know
• incompetence – eg by not applying discounts that the CSP is entitled to
• malign – the vendor knows they are overcharging but haven’t actively brought it to the CSP’s attention. After all, it’s the customer’s responsibility, not theirs…

However, vendors should also be aware that the commercial environment coupled with the advent of SaaS, Cloud technology and COSS, means that far more scrutiny is being paid to licensing. Failure to be fair could have long-lasting negative repercussions for the entire relationship.

If you want to use licensed software, [Uncle] SAM can help

Software asset management (SAM) can help CSPs optimise their licence spending. Just think about the mess we used to have (and some still have) when it comes to network equipment. We literally didn’t know what we had and the information was spread across a dirty mixture of heads, spreadsheets, bits of paper and home-spun databases. The inventory management market arose out of the realisation that simply by getting better control of our existing network equipment, and our spending on network equipment, we could significantly increase operational efficiency and optimise our CAPEX and OPEX.

The same situation now exists in the software realm. For many large or established CSPs that have a complex BSS and OSS infrastructure, possibly with lots of M&A thrown in to make things even more complex, and a combination of on-premises products, bespoke technology, outsourced, SaaS, even Cloud-based applications, it is highly unlikely they have a tight grip on exactly what they have and whether they’re being overcharged. (Of course, the flip side is that there may be unlicensed use of software within the organisation, which has compliance and risk implications.)

Managing software licensing more tightly might be just the answer you’re after if you’re looking to free up OPEX for innovation.

I recently spoke to Matt Fisher of SAM vendor FrontRange, who says that on average across all the industries his company works in, it’s usually possible to save up to 20% off your current licensing costs. Matt says that desktop vendors such as Microsoft are leading the way in improving licence transparency and making the whole thing more customer-centric. These vendors know that if you overcharge your customers they’re going to be unhappy right?

Matt commented: “most companies are overspending on licences because they leave unused software dormant without reharvesting the licences, estimate their volume licence requirements rather than base them on current audit information, fail to clamp down on ‘maverick’ software purchases, and fail to buy software through the most cost-effective means.”

Matt reports that one of the key ways CSPs can save money on software is by gaining full visibility into the total number of applications they have installed and whether these are being used. “Even aside from managing the cost of individual software purchases,” says Matt “SAM initiatives help organizations understand their true IT needs, putting them in a better position to negotiate favorable licensing agreements.”

Many CSPs are investigating alternatives to traditional licensing…

There are several alternatives to traditional software licensing that CSPs are also using or actively investigating:

• using commercial open source software – because you don’t pay for a licence
• adopting cloud-based SaaS – because it “flexes” more accurately to what you need (you only pay for what you use). This would typically suit smaller CSPs or growing CSPs. It’s also highly suitable for trials
• alternative business models – such as risk-sharing or results-oriented payment, where vendors get paid on the results they deliver to the CSP. This is particularly common in BSSOSS sectors such as revenue assurance, but  is also used by newer vendors such as marketing software firm Pontis, which operates a value-based business model

Licences shouldn’t be leashes (or leeches)

There has to be a synergy between software provider and customer. Software licensing should be delivering value for money, and CSPs should be optimising their spend. However, we also need to ensure that vendors get a fair return on investment. Software should be right-sized to the business to enable both vendors and CSPs to do better business. It should not be tying up all the CSP’s OPEX in an unaffordable cost structure; nor should it be holding back innovation because they’re overpaying.

Another of those uncomfortable truths about telecoms BSSOSS is that the cost of running it for many, many CSPs is still far too high. Wise CIOs will be scrutinising this issue far more in future because they simply will not be able to maintain an artificially inflated software cost structure. I’ve heard enough horror stories about licensing – isn’t it time for a fairy tale where everyone finds a way of living happily ever after?

Teresa Cottam looks at Redknee’s acquisition of Nimbus, and talks to Humera Malik about the likely benefits Redknee will derive.

There’s lots of different sorts of M&A and some of it is quite forlorn. In contrast, Redknee’s acquisition of Spanish vendor Nimbus seems at least from the outside a much more positive affair. Commentators have greeted the news positively. Redknee itself has taken great pains to welcome the 100+ Nimbus employees and has emphasised how much it values their skills.

This latter point is an important one. Many an M&A that looks good on paper turns sour because the cultures are so different, or because the acquired company’s staff have an unfortunate experience of acquisition. The outcome is that the M&A leaches value as key staff leave for pastures new. Wise acquirers pay attention to the staff issues.

So what else will Redknee gain from Nimbus?

Redknee is already active in EMEA but it will gain around 10 new customers post-acquisition, including European group operators such as Telia Sonera and Telefonica. Acquiring a European firm will strengthen its offering in the region and bolster its ability to support its own European customers.

There are some technology gains to extend Redknee’s capabilities too, including what Lucas Skoczkowski, Redknee’s CEO, has termed “robust” IVR capabilities, analytics and capabilities in post-paid billing, billing tools and customer experience management.

Nimbus also brings a strong relationship with IBM, which is in addition to Redknee’s existing relationship with Microsoft. And Redknee, like many other telecoms software firms, is now starting to look beyond telco into the opportunities in other verticals. While Redknee is happy to admit to aggressive growth plans, it is a little more tight lipped about its expansion plans – as is to be expected. However, it promises further announcements over the coming months.

Telesperience’s view

Redknee is exhibiting some great signs at the moment – confidence, a sense of direction, ambition, and a positive, young culture. You will note that they have bought well in the past – gaining partner and interconnect billing (InBill) from Argent Networks for very little (approximately USD800k) back in 2008. Like other commentators we’re positive on this acquisition generally; financially, the price appears robust for a 100-person firm in this market, but not spectacular. However, Nimbus’s founders will join the Redknee senior management team and the deal is partly in Redknee shares, giving them a stake in the company’s future success.

As regards Redknee’s expansion plans, if you read between the lines you’ll notice that two of Nimbus’s existing customers are Santander and First Data. It would seem logical that this is a sector likely to be targetted. Utilities would seem logical too – particularly given the new metering and application of mobile tech that is going into that sector. Another would be retail.

Santander, in particular, is a strategic gain. It has a reputation for using IT for business advantage, and its Partenon platform has proved to be a powerful weapon in delivering value from acquisitions. You may like to note that the story I wrote on Partenon back in 2008 has been read thousands of times and is still one of our most popular pieces even 18 months later. (see Banking on IT: the lessons we can learn from Partenon) Both within banking and elsewhere, Santander is a bellwether.

Meanwhile the Spanish- and Portuguese-speaking staff Redknee has acquired will certainly aid its CALA ambitions.

Further resources

Wikisperience: Redknee profile

Interview with Humera Malik commenting on the acquisition.

Teresa Cottam looks at the telecoms revolution, the role of the iPhone, and the tectonic changes that are revolutionising the way we live, love and do business.

Revolution is one of the most over-used words in the English language. Most things that are hailed as revolutionary fail to live up to the promise. Too often revolution is a synonym for hype or hope.

For what seems like a geological age, but is in fact less than three years, we’ve been told that the iPhone is revolutionising both telecoms and the way we live our lives. The centre of this carefully spun campaign, meticulous in every detail, is the US. Here the iPhone probably did seem like the future distilled into an object when it was unveiled. The US trailed Asia and Europe in the sophistication of its mobile devices, and I recall American friends being blown away when they saw Europeans taking really good photos with our telco-subsidised smartphones way back in 2005 or 2006.

The iPhone changed that. Here was an all-American device that did just about everything – or so goes the spin. Europeans and Asians seemed churlish when they pointed out its technological failings or lack of robustness.

Reflecting on those failings in the early iPhone, as well as the more recent Antenna-Gate, I’m reminded of some sage words from Charles F Kettering, a US inventor who was head of R&D for General Motors. Kettering once commented: “We have a lot of people revolutionizing the world because they’ve never had to present a working model”. It’s uncanny how this thought still holds true today, not just for the iPhone but for our approach to technological ‘revolution’ in general.

But this post isn’t about whether we like or dislike the iPhone. It’s about whether it really has revolutionised telecoms as its fans and maker claim. It’s about what the telecoms revolution – indeed what revolution itself – really looks like.

The American philosopher Eric Hoffer once said: “We used to think that revolutions are the cause of change. Actually it is the other way around: change prepares the ground for revolution.” This is profound stuff and certainly applies to technological revolution.

To understand what’s going on let’s consider the industrial revolution, since we have more perspective on this than on the mobile revolution. At school, children learn about the engines of change. Long-forgotten revolutionary technology like the Watt steam engine or the Spinning Jenny. With historical perspective, however, we can see that technology is revolutionary in the same way that the May Fly has life: years of development result in a brief flight of success before it is superseded by the next generation.

In fact even advanced technology will not deliver on its potential if the environment is not right. A recent example of this is the dot com crash. Lots of great ideas, new ways of doing business, new technology – all wrapped in revolutionary battledress and capped off with a huge dose of hype.

The retrenchment that followed was curious. Commentators who had previously expounded how wonderful it all was were now saying that online retailing wouldn’t work; sceptics seemed smug in their prophecy of failure. But it failed because some of the fundamental conditions weren’t right; weren’t ready for this revolution to take flight. Yet here we might recall a comment by Alvin Toffler which always makes me smile: “To think that the new economy is over is like somebody in London in 1830 saying the entire industrial revolution is over because some textile manufacturers in Manchester went broke.”

It took another five, six, even seven years for the “right” conditions to come about for the communications revolution to really gather ground – better bandwidth (broadband), good QoS, ubiquitous access to PCs and mobile devices, more powerful handsets, innovation and so on. The most important condition was a change in people’s behaviour. Today, all of this technology is now embedded in how we work, how we live and how we love. The revolution has succeeded because the most important elements are no longer perceived as revolutionary but as everyday.

Saying the iPhone has revolutionised telecoms is like saying you have invented the best knife in the world. You may have indeed invented a very good knife. But to eat in a civilised fashion you need knife, fork, spoon, plate and, of course, some food. You need to be seated in comfort and accompanied by good friends. Having the best knife in the world is not the same as having the best dinner party. It’s also no good having the best knife is you now can’t afford to eat.

And revolution also has a lot to do with perspective. Often it is a collection of seemingly unimportant or minor things that have the most profound and long-lasting effects. This is why we need perspective to truly assess what was really important from what seemed important.

A question that history often throws up is: is a revolution that changes the lives of only a small number of elite people as important as a great social change that affects millions or even billions? Again, this depends on your viewpoint. But it is why for me, the things that have really revolutionised telecoms are better batteries, more networks, more bandwidth, accessible tariffs, penetration of phones at affordable prices, and good-enough QoS.

I think it’s nice that the elite can afford to use ‘the best knife in the world’; but the real change comes from the majority of the population having access to a pretty good knife. Changing the thinking of the elite may enable  change in society (think: William Wilberforce), but it can also happen the other way (think: French Revolution) when the elite become out of step with the majority. When I think of iPhones I can’t help but think of Faberge eggs.

When we look back on the mobility revolution of the early 21st century, we may very well regard the iPhone as the Spinning Jenny of its day. It will adorn the cases of museums and we will laugh at how we all used to carry such devices, as we update our friends using whatever wonderful communications technology we will then have access to. Touchphones will be as passe as steam. But I also believe other perhaps less publicised or showy technologies or issues will, with the perspective of time, be viewed as having had significant importance in the mobility revolution and will assume their rightful place in the limelight.

Beyond the PR, Teresa Cottam looks at what’s really happening with Google Wave.

The press has been pumped full of reports and responses to the somewhat coy announcement by Google that it was abandoning Wave. Reports seem to waver between regret and “I told you so“. But what is the real story behind the announcement?

As an analyst I’m used to reading the lines, and between them. With this story it smells not so much like Teen Spirit, as like Salad Cream. Despite it being a US firm, I guess many of my American pals may not even have heard of Heinz Salad Cream, which appears to be a peculiarly British product. It’s mayonnaise guys, but not as you know it. Stronger taste; beloved of Brits since the 20s. Fantastic in eg tuna sandwiches. But hey I digress.

Heinz ran one of the better marketing campaigns of the last 10 years when they suddenly announced they were going to cease production because the market was swinging to mayonnaise. We were all fooled. We were simply stunned. What would we do without salad cream? There was panic buying as people went out and bought cases of the stuff. The publicity was priceless, with consumers advocating on every medium available to them that Heinz salad cream held a special place in their hearts. And due to public pressure Heinz kindly agreed to continue making it…

So what has this to do with Wave? Look at the headlines – everyone is talking about it. Priceless publicity. As with salad cream we have to ask though: is Wave really dead?

Firstly do you recall the Google Me rumour? Some, including former Facebook CTO Adam D’Angelo, say it’s more than a rumour. Now add in Google’s recent investments – eg Slide and Zynga. Now season that with recent announcements of developments for Wave such as integration with Salesforce and Oracle. Now re-read what was actually said: “We don’t plan to continue developing Wave as a standalone product, but we will maintain the site at least through the end of the year and extend the technology for use in other Google projects.”

What’s really gone on is that Wave was used to test certain features and protocols and they will be reused and recycled as Google pulls together its various products into Me. In that sense you can see Wave as Me One and thus Me is really Me Two. And the obituaries for Wave are the birth announcements for Google Me Two.

Teresa Cottam takes a look at mobile peripherals that enhance the Telesperience and asks for suggestions…

So we’re in the middle of what the mainstream press call “the silly season”. That time of year where just about everyone’s going on holiday, already on holiday, or coming back from holiday, and everyone who isn’t is finding it hard to be quite so serious about data, billing systems or (heaven forbid!) OSS.

For a little light-hearted diversion I thought we’d take a look at peripherals and gadgets that actually enhance the telesperience. The surprising thing is that while there are stacks of gadgets out there most of them leave me with a distinct feeling of “so what”. But here’s a few of my favourites and maybe you can let us know of others that you’ve tried and liked! (Vendors: hint, hint these make great corporate gifts!)

1. What we need is more power!

I remember when mobile phones had a talk time of less than a short conversation with my mother (okay she can go on a bit). The only solution was to carry precharged replacement batteries (at vast expense) in your pocket, or spend your life searching for plugs where you could blag (ie steal) some electricity and hope you didn’t get sent to jail.

Batteries are now hugely more powerful, but as fast as they pack more punch into them the applications seem to get more power hungry. And if you’re like me, you probably forget to charge before you go and spend half your life fretting as the blobs on your battery icon hover around zero.

What we need is more power, and nowadays there are some pretty clever peripherals that deliver just that. I’ve been using a classic Powermonkey for a few years now and that’s pretty handy. You charge it up; it comes with multiple adapters (thereby getting round the problem of having to swap the device every time you change phone); and it’ll give you two or three full charges before running out.

I am so bad…sorry I mean busy…that I even forget to charge the Powermonkey. But Powertraveller have come up with a solution to this (okay, they actually designed this for people who go places, but what the heck) in the form of the PowerMonkeyeXplorer, which features a solar charger. I know I don’t really need one, but I want one okay?

The PowerMonkeys also have a “big brother” in the form of the Gorilla which is designed for eg laptops.

PowerMonkey eXplorer – price £65 inc VAT.

PowerMonkey Classic – price £35 inc VAT.

What next? Power corrupts; absolute power corrupts absolutely… Okay love my PowerMonkey; desire a PowerMonkey eXplorer; but could be corrupted by a wireless charging device. Cables are so last century aren’t they? Haven’t used one of them yet and there’s still mixed reviews around. If any readers have used one would love to know what you think of them.

2. A little more oomph (and that’s a technical term)

If you’d told me I desired portable speakers even 18 months ago, I would have screwed up my eyes in disbelief. But I would actually quite like a portable, pluggable speaker to give a bit more oomph from my phone when I need it. I did a big of digging and I’ve a few inexpensive suggestions for you here:

Veho 360 – price around £8.

Mini Capsule speaker – price around £9

XMI X-Mini – price £14. Really like the fact you can daisy chain these!

3. Dirty, dirty, dirty

So this has turned into a bit of a confessional piece. But sometimes I feel like the Bernard Black of the mobile world. I don’t keep my mobile in a nerdy little holster; I don’t remember to place it lovingly in its proper wallet. No I sling it in my bag where it has to compete with keys, tissues, a lipstick or two, and anything my kids have stuffed in there without telling me.

I admit I’m a techno scruff okay. But partly that goes with being a woman. Shiny black mobiles with big screens were obviously designed by men for men. Women can’t wear holsters to hold them in for goodness sake – we’re lucky if our kids don’t cook them in the microwave or helpfully tidy them away into the freezer. And if you wear make up, use hand cream, or are in the habit of throwing your mobile into your bag (see above), then you’re going to have that horrible moment of self-loathing at conferences when more organised male counterparts remove their gleaming devices to universal admiration and you have to try and conceal your own grubby phone.

I faced four equally unappealing choices: 1) employ the cleaner 2) only ever use my mobile under the table 3) create a new fashion for wearing white cotton gloves 4) lobby Nokia for a self-cleaning phone. In the end Telcordia saved my bacon by giving me a rather nifty device at Telemanagement Forum Nice. Still not sure whether they were simply being kind or were trying to tell me something my best friend wouldn’t.

Anyhow, thanks to them I’m now a reformed techno slob and my phone gleams with the best of them.

Procare Stylus and Touchscreen Cleaner – about £8 (iPhone not compulsory)

4. Smile please!

A true gadgety gadget from Polaroid, the Pogo Instant printer isn’t going to give you the best photos in the world, but there’s something really cool about instant mobile wireless printing. Your phone needs to have Bluetooth and, of course, it will only work with the special printing paper, but even this is now reasonably priced. If you’re looking for a fun gadget that won’t break the bank for a hard-to-buy-for teen or to give away at a show then this is great.

Polaroid Pogo Instant Photo Printer – around £25, paper varies but 70 sheets around £11.

5. Over to you…

Are there any great mobile peripherals you’d recommend? Would love to hear your suggestions…

“BSSOSS market to grow 200% in next 12 months.” Teresa Cottam looks at market forecasting.

BSSOSS market to grow 200% in next 12 months. Got your attention didn’t I? And you see that’s the problem with forecasts – we all want to see a big number and a graph rising steeply to the right.

I don’t do forecasting, so I’ll confess that before I begin. My market prediction was just designed to get your attention. And that, of course, is the problem.

I do understand the need for forecasts. Before a firm invests in a new opportunity, it’s useful to know if there’s any potential there. They’re needed for business cases, for valuations and so on.

That’s all well and good. But I think sometimes we get carried away with it all, as though the numbers were real rather than indicative, and not just a good (and sometimes not so good) guess about what might happen.

Some forecasts can be so wildly inaccurate that I remember one incident – oh a good 10+ years ago – where the sub-editor had mistakenly written billions rather than millions and no-one questioned the figures – not ever. The mistake was only picked up years later when an update of the report was prepared and it was realised the market potential had been exponentially over-egged. Nowadays, some forecasts are like yo-yos, constantly being revised up and down to the point where you start to feel sea sick.

2 + 2 + 2 does not equal 100 billion

It’s not forecasting itself, per se, that’s the problem though: it’s the way we interpret and use forecasts. It’s also our emotional reaction to them. I’ve often heard vendors tell me that they don’t read the report just the charts. But we have to become more educated about how we view them, and learn to interpret them rather than just mindlessly repeat them. We also have to question them more.

My reason for writing this is that I am seeing some very bullish forecasts for new areas of software tech – Cloud being one of these that springs to mind. I’ve been making the point a lot recently when people talk about “robust growth”, that this is just the opinion of a small team of analysts – usually one or two – who might very well be wrong. I’ve asked where the money is going to come from to build these multi-billion dollar markets, and pointed out that there must be a substitution effect going on because all indicators suggest there’s no new money (at least in telecoms IT). That’s before we get into the nitty gritty of the detail of what’s actually being counted.

We hear a lot of talk about running leaner. About getting our IT costs down. Then we all get so very excited when someone runs out a forecast predicting some software domain is going to grow rapidly. Look at that the other way round: it means somewhere costs are going up. Economics suggests these new costs will have to be paid for.

I can’t see many CFOs opening their purses and throwing money at software like it’s 1999, so if these forecasts are right then we first need to free up some cash from somewhere else. If the budget and market is level or declining overall, then the logical conclusion is that if one sector sees money flowing into it, another will see money flowing out. If you spend on Cloud, then you’re not spending on hardware. If you spend on social CRM then you need to pay for that by spending less on other parts of CRM or by creating efficiencies somewhere else.

This is where one of the big errors creeps in – valuations for vendors are based on their presence in a growing market. Often financial analysts miss the subtle fact they’re also a player in a sector that’s declining or will be substituted. On that point, I sometimes read financial analysts’ interpretation of markets I know well and I simply don’t recognise them. Vendors need forecasts to show a steep gradient to the right, so the problem is no-one’s interested in forecasts that show decline or stagnation – there’s no market for them. I’ve seen the sales figures: bullish forecasts sell. This encourages a lack of honesty, or at the very least a tendency to be particularly optimistic.

Substitution effects can be real uplifts to IT, but are often less than anticipated

Of course there’s real growth. For example, some CSPs are replacing bespoke or home-grown solutions with COTS or SaaS. So the market, depending on how you describe it, may appear to be growing – in fact, there’s a substitution effect going on. Usually there’s also an expectation that money will be saved. The same is true when we “automate” – one key motivation is to reduce people costs, so we’re substituting software spend for wages. However, there’s also an expectation from the business of reducing spending when you do this – I’m yet to see a case where savings from say wages are pumped fully back into IT. The business needs to announce that it’s saved money.

Likewise the money to fund new initiatives is often “trapped” in existing commitments. Releasing this cash takes longer than many analysts seem to understand and is not a trivial undertaking. Many CSPs still have some way to go before they take the title “slimmer of the year” and claim a “cellulite free” back-end.

However, while there’s still scope to drive more cost out of IT in order to finance lower prices while maintaining margins, and to finance new initiatives, there’s a natural software and hardware renewal cycle, and I haven’t yet seen much evidence that CSPs are prematurely chucking away software or hardware to finance the much-desired modern infrastructure. Isn’t the money for renewal still largely locked up in legacy? Isn’t the lifespan of solutions actually expanding rather than contracting? Isn’t the evidence that while you can modernise it’s not easy, and requires investment – ie cash – in order to do so. Aren’t many CSPs actually frustrated by their inability to switch off legacy? Even those that have managed to do this have spent an awful lot of money, time and effort doing so that belies that flick to the right we see in a typical forecast.

These are the reasons why actual adoption patterns often don’t fit the steep curve of the forecast.

I haven’t yet found the money tree

Please let me know if there’s a secret BSSOSS money tree that telecoms CFOs are using to finance some great big software investments. I’m still hearing that budgets are essentially flat and certainly down on what they were at the peak of the market. The credit crunch means finance is still hard to come by.

Constrained IT budgets are nothing new either – all I’ve ever heard in my career is that IT budgets are tight and CSPs need to save money. Living in the UK I’d originally assumed that this was a factor of our incumbent moving from being a public-owned utility to a privately-owned competitive telco, coupled with a regulator who’s driven down prices (and therefore margins). As prices have decreased for basic services, so the need to run leaner has increased. The credit crunch has magnified this effect because prices are now also being constrained by disposable income, which is down.

One of the very real challenges we face is having to do more – help the business reduce costs elsewhere, drive through operational efficiency, innovate and so on – with less (ie without any corresponding increase in IT budget).

I’m not saying that there won’t be growth in some IT areas, I’m just trying to point out that forecasting often produces a distorted picture of the market. The reality is you don’t always need to spend more to achieve your objectives – you can spend smarter. Of course the bad news is that although I keep looking, to date I still haven’t found the secret BSSOSS money tree.

What do you think about bullish forecasts? Do you think we’re going to see budget inflation any time soon? Do you know where the secret BSSOSS money tree is?

Teresa Cottam ponders the future of app stores and the retailing of digital goods.

The download gap

I read an interesting post by Forrester’s Thomas Husson the other day on The Future of Application Stores.  In it he highlighted the gap between people who think being able to download apps is neat (21%) and those that actually do (4%).  Thomas makes a very good point: “The subtle differences between widgets, Web apps, native apps, Java apps, and optimized mobile Web sites don’t make much sense to your end users.”

You see I have a lot of problems with the whole app store concept, with the Apple love-in and with the business models. When I look at those figures what I see is that a whole lot of money is being pumped into what is basically an elite audience – the 4% of mobile phone users who are interested in apps. Husson says the App Store generated $429 million for Apple over two years, or a little over $200 million a year. Apple itself says it is running slightly above break-even (don’t forget it has development costs and then there’s transaction costs in the form of credit card fees), even with a 70:30 split that developers hate. If you do the maths then  I wonder why are we getting quite so excited about a business generating somewhere between $700 million and a $1 billion in revenues. In context a single popular game can sell far more than that – I think Wii Fit is now upwards of $2 billion.

When I look at all of this I see too much concentration on tech geeks, lots of noise but not enough revenue, and basically an inability to sell to the mass market where the big rump of the revenue is to be had. And while the revenue graph is going up, it’s does not appear to be rising so steeply. From January to June 2009 revenues were $228 million; from July to December 2009 revenues were $458 million and for January to June 2010 around $542 million. So growth has dropped from 100% to 18%. Although bear in mind it’s possible there’ll be a big uplift for Christmas.

We know that Apple is something of an exclusivist and aspirational brand – or so it likes to tell us – so we cannot expect it to become the Walmart of the digital commerce world. It aspires to be Waitrose, not Walmart. What it risks from this strategy is being undcut and out-competed when the digital lifestyle goes mass market. There’ll always be a niche, but will the niche be big enough for either it or its ambitions? (Deja vu?)

An example here would be the clothing market. Haute couture still exists but is dwarfed by various iterations of the off-the-peg model.

Do the mass market actually want a “digital lifestyle”?

This is a very interesting question and the answer is not as obvious as it might sound. In the UK we’ve discovered there’s a digital rump of non-believers – consumers who will not adopt mobile, broadband or internet technologies. Many don’t want digital TV; some even refuse to have TV full stop. Even for adopters the adoption curve is long: the mass market took a very long time to get the basic online experience, and not everyone is even fully engaged with that today. I know people who email and trawl the internet, use skype and interact on social media, but still haven’t bought anything online.

Apple is not the corridor to the digital lifestyle for the average consumer. That said, I believe that you can sell the digital lifestyle to the majority of the mass market; but to do so requires a change of business model and strategy. There needs to be a whole lot more education, marketing and retail know-how used to engage with the majority. The entry point will also have to be lower.

Look at it like this: current adopters are the techno-hunters. They go out actively looking for new experiences and they like to be the first to have a cool device, something that no-one else has. They like novelty. So they are ideally suited to apps.

The rest of the market have different motivations, characteristics and disposable income available to them. Many will adopt only when they understand the offering, when it’s made consumable for them, or if it’s useful. Much of this market is either looking for value for money or longevity or other value that doesn’t always fit with the current apps model. To access this market means simplifying the offer and doing a lot of work to support the sale.

One key issue that is applicable to the BSSOSS market is that payment is a critical barrier. Buying things online or on mobile isn’t easy for the average consumer. People are wary of the security. The value offered to them doesn’t yet outbalance the inertia, security concerns and inconvenience. Then there’s lack of attention – many are too busy to investigate the value proposition.

Apple sits in its ivory tower inventing its miraculous engines, and it expects you to come hither and engage with it, on its terms. Clearly this is a marketing strategy. But the mass market won’t come hither: they expect the retailer to reach out and engage them.

To make the digital lifestyle mass market we desperately need the expertise of firms who understand the average Joe, such as mass market retailers like Asda-Walmart, Carrefour and Tescos. Firms that are great at making products relevant, understanding your needs, and helping you part with your money as painlessly as possible.

The successful future app store doesn’t look like an Apple store it looks like Costco: “try a sample…do you like it? want to buy some on offer?” It looks like Amazon: you like Tom Jones/blues/country music don’t you? We think you’d like the new Tom Jones album.” And like Asda-Walmart: “buy ten tracks from the new Tom Jones album and get two bonus tracks free…” And finally like Tesco: “you have £5 in loyalty vouchers. If you use them the album is yours for £3.” Its revenues and margins look like Walmart’s not like Apple’s

Compare Walmart (revenues of $408 billion) with Apple (revenues of $43 billion). Then look at the margins: $24 billion versus $8 billion. Mainstream retailers don’t support the margins generated by Apple due to competition and fitting the price to the market – in fact, Apple’s pricing more closely resembles a monopoly. So what happens when competition piles in?

Oh and if you’re thinking “Tesco can’t sell digital goods… ” then I have to say that’s exactly what I thought when I first heard they were going into telecoms. Believe me if you think they can’t do it that’s your own intellectual or technical snobbery getting in the way. Whether they want to do it is the question.

Don’t be fooled: digital retailing is still retailing

We seem to think there’s something special about retailing digital goods. This is where I disagree: to me, retailing digital goods like apps or music is still just retailing. Quietly, major retailers are going fully multi-channel including social media, and building up their expertise in retailing non-tangible goods.

As retailers search for new niches to exploit and extend their offering, isn’t the digital marketplace an obvious area for expansion? My view is not just hot air. Having done extensive research into the strategies of European retailers, the message coming back is that they’ve realised that online, mobile, social – it’s all just retail. Many have stated that they’re looking to online expansion to overcome the barriers they face in the physical world.

I think we spend too much time focusing on Apple and on the early adopter market. We need to turn our attention to the mass market and recognise that the approach that will work here is not a copy of the Apple model. At the same time, retailers are hungry for new markets to exploit, and I would like to see them put their considerable know-how of customers, marketing, supply chain and operational efficiency into this market – probably in partnership with a third-party platform provider – because I believe that’s when we’ll see the mass market open up.

Where are the opportunities? Someone will have to provide a platform as retailers don’t see themselves as being in the platform business any more than content firms do. Ease of payment will also be key. A major impediment is the credit card firm: 15% to clear a transaction I ask you! We can do better than that.

My great fear about the apps market is that forecasters are plucking huge numbers out of the air about its viability, without this being rooted in reality. To be viable we need a mass market and we need a profitable business model – just talking the market up is not enough. For those of us old enough to remember, this all sounds horribly familiar – dot com bubble anyone? Let’s hope this doesn’t turn into the mobile mushroom…

Teresa Cottam explains the need for software intermediaries and the emerging role for software aggregation in the telecoms BSSOSS market.

We’ve all heard of the MVNE (mobile virtual network enabler). Basically, an intermediary that provides services to MVNOs (mobile virtual network operators) such as BSS, OSS, admin and marketing services.

What I’ve come to realise is that there’s a role for aggregators throughout the telecoms software world – I’m going to call these firms telecoms software enablers or TSEs (you know how we like our three letter aconyms, aka TLAs!).

To understand why there’s a role for such an entity you really have to understand software strategy, the dynamics of the communications industry and the practicalities that CSPs of all types are faced with.

Software is like glue – it sets around you

Firstly, software is set to deliver huge added value to CSPs in future. Being a CSP is no longer about network expertise, because you can market telecoms services now without having to own or operate networks. If I’d told you even five or six years ago that network operators would be outsourcing the running of their networks to third parties such as Nokia Siemens Networks you’d have probably been skeptical. Nowadays with the need to run leaner, and the refocusing on discovering what our core USPs are, we see more and more network operators outsourcing the running of their networks.

Likewise, we may never have enough bandwidth to satiate unrestrained demand. Quality of service might very well become a vital differentiator (again). But most of what is going to differentiate one telecoms offering from another now lies in the software and data layers. (Even part of the answer to dealing with QoS and demand for bandwidth.) Which software we use, how we use it, how it supports our business models, how we use our data…these are the kinds of things that are going to be increasingly important.

This is the age when software and data are really going to come into their own, but as I survey the real-life problems faced by CSPs it’s never as simple as many vendors or even some other commentators would have you believe. CSPs would obviously love to be benefitting from the operational and commercial agility delivered by modern software solutions, but usually they’re stuck with legacy platforms – like glue these have set and hardened around them and they’re now stuck fast. Their head might have lots of exciting ideas but their feet are embedded in legacy platforms that’s going to take a whole lot of effort to break free from.

We talk a lot about standardisation and new architectures such as SOA to avoid these problems in future. But I’m still not entirely convinced that the average CSP has the time, money or headspace to want to take on all these techie software issues.The CSP universe is far bigger than tier zero’s or tier 1′s and the big five or six software providers. We have to stop talking as though the average CSP were BT, FT, DT or AT&T and start realising that these are the exceptions, not the rule.

No single vendor has an end-to-end solution for BSSOSS: even those with a pretty wide and comprehensive offering still have big gaps. So the reality is that you’re going to have to integrate different solutions for the foreseeable future. In any case, the problem will only get worse, as in future the lifespan of the average solution is likely to get shorter and shorter.

If you were free of any concern – money, time, expertise, legacy etc – you’d like to test drive the latest solution, upgrade to the newest version, mix and match as suits you. But you can’t concentrate on the really important things – modernising your business model and improving your customer experience – because your plans are constrained by legacy and by your CFO.

Cloud and SaaS point the way towards TSEs

The Cloud and software-as-a-service (SaaS) offer some glint of hope. Neither is a panacea. But what they speak of most seductively is the ability to get immediate access to state-of-the-art applications and hardware while not having to worry about some of the mundanity. Plus costs that flex to your need.

The Cloud and SaaS are both in their early days. And they don’t solve one of your most annoying problems – solutions integration. Since there is no all-encompassing BSSOSS solution you are still going to have to pick-and-mix solutions and integrate these. Integrating between on-premises, Cloud and outsourced solutions means the integration headache is not going away any time soon.

Now think forward a few years. Someone offers you a telecoms software platform that takes all the work out of this. The platform plugs in to your data sources and then you use whichever solutions take your fancy because the platform acts as an intermediary, an aggregator of solutions, and insulates you from the effects of change. What if this platform was open and supported the innovative solutions from smaller vendors, who plugged their apps in. By supporting choice of apps it would allow you to differentiate your offering. What if someone had the vision to get out of the closed market apps business and move into the open market apps business? Like Amazon v Amazon marketplace, they take the pragmatic decision that they can make money both from their own apps and from other people’s apps. We see this in the consumer market so why not in the telecoms enterprise software market?

Could this happen?

Now go back and look at Amdocs’ AIDA and think about what you could do if you could aggregate data and then feed it to any apps that need it in realtime. Of course I’m not suggesting that Amdocs have said they would do this or that they’d open up their platform, so I need you to screw your eyes a little here and use a little imagination. Now think about how Microsoft operates with its partnership programme. Now cast your mind back to how Amazon has moved from selling books, to selling stuff, to enabling selling.

Now go back to the idea that when you take away the biggest telcos, most smaller CSPs want advanced software but they don’t want the headache of buying, integrating and managing it – they just want the capabilities at their fingertips.

Where’s the really big opportunity in telecoms software? It think one of these is in next-generation “mediation”. That is, extracting data, aggregating it, cleaning it, governing it and making it accessible to whichever apps need it. It’s in providing this data to your own apps, but also opening up this platform to partners. After all, we know it’s unlikely that any single firm is going to be able to provide the full gamut of apps we might need or, more importantly, choice of different apps.

How many firms could hope to achieve this? Three? Four? I know who I have my money on. It might not even be traditional software vendors, but also tier zero CSPs who build a great platform to solve their own problems, or else non-traditional business enablers – people who grab, own and expand the Cloud concept rapidly.

I believe that the time will come when running your own software backend for smaller CSPs will become as outdated as trying to generate your own electricity. Such CSPs want software to provide information that helps them run a better business. They want to differentiate their offering through software and data. But is there any business benefit in duplicating effort on things that don’t offer competitive advantage – such as integrating software platforms, evaluating and selecting software and so on?

I think the Cloud will only deliver its full potential when we can access the full gamut of BSSOSS applications, preintegrated, with capabilities served up as services for us to consume. I offer you this straw man to think about and debate. Now tell me who you think has the know-how to create a plug and play apps platform for BSSOSS… Let’s think about where the real value lies – is it running your own software or is it in exploiting software to create commercial advantage?

As Ofcom announces a new Code of Practice in the UK for handling customer complaints, Teresa Cottam considers the likely commercial and strategic impacts.

New Code of Practice for handling customer complaints

Following its review of consumer complaints procedures, the UK regulator, Ofcom, has announced a new Code of Practice for CSPs in the UK. In its review, Ofcom stated that “the current standards of complaints handling in the telecommunications industry are of sufficient concern to justify regulatory intervention”.

That’s a pretty tough statement about an industry that supposed to be focused on the customer experience.

According to Ofcom, although most customers were happy with the service they received, or had had their complaints dealt with promptly, a significant minority failed to resolve their dispute with their service provider – around 30% of disputes or three million customers in 2009.

Ofcom has already approved two resolution services – the Communications and Internet Services Adjudication Scheme (CISAS), and the Office of the Telecommunications Ombudsman (Otelo) – but it seems that awareness of these services remains low. Ofcom stats indicate that 77% of consumers who failed to resolve their complaint after 12 weeks did not know these services existed.

Yet for those who use the services they seem to be effective, with 91% of consumers who took their complaint to a resolution service subsequently resolving the dispute.

To improve matters Ofcom’s Code of Practice will require CSPs to:

• include information of the relevant dispute resolution service on all paper bills
• write to consumers whose complaints remain unresolved within eight weeks to inform them of their rights and where to go next in order to get their complaint resolved (the resolution period has been reduced from 12 to 8 weeks).

Ofcom will also establish a code of practice which specifies minimum standards for how CSPs should handle consumer complaints. Ofcom aims to increase consistency through the industry and also provide a benchmark that enables it to take action against CSPs who don’t treat complainants fairly.

CSPs will be required to handle complaints fairly and in good time, and have procedures in place that are transparent and accessible to consumers.

The Code of Practice will come into force on 22 January 2011. The requirements to improve awareness of dispute resolution services will come into force on 22 July 2011.

Key take-outs

For me, a number of statements and facts stood out in what was a very long Ofcom document:

• satisfaction levels are ‘high’ – Ofcom’s says UK consumer satisfaction with overall telecommunications services are 89% for fixed line services, 92% for mobile services, and 86% for broadband services  (see Consumer Experience Report)

• Ofcom recognises the right to provide a differentiated customer service – “We fully support the ability of CPs to compete on customer service and are wary of prescribing how CPs should interact with their customers”
• Ofcom does not believe competition is providing the desired effect yet: “The evidence suggests that providers’ incentives to compete on the basis of customer service are not proving sufficient to ensure that individuals will receive satisfactory treatment from their provider when they try to pursue a complaint.”
• complainers churn – according to research conducted for Ofcom by Synnovate, 32% of those whose complaint lasted at least 12 weeks had already changed provider, with a further 29% planning to do so as a direct consequence of the complaint
• there’s a lot of dissatisfied customers - Synovate found that 23% of the UK population had made a complaint to a mobile, broadband or landline provider in the preceding year, with 30% of these complaints being unresolved 12 weeks later (compare rates of complaint within other verticals: 4% in post, 12% in energy and 6% in financial services)
• billing disputes are a major cause of unresolved complaints – Ofcom says: “We do however note that the Synovate market research shows that unresolved complaints are often about inaccurate bills, being charged for cancelled services, or being put on the wrong package – all matters that one could reasonably expect to be capable of resolution in negotiations between parties”. The report states that bill disputes are the most common cause of unresolved complaints in both the fixed (26% consumer complaints and 16% of complaints from small businesses) and mobile sector (20% of residential complaints and 17% of small business complaints). NB: in the broadband sector the most common cause of complaint was slow connection speeds.

Telesperience’s view

It is somewhat disheartening that the major cause of customer complaints remain bill disputes. The cost of handling these complaints is considerable and the industry should be putting more effort into simplifying tariffs, educating consumers on likely costs, providing mechanisms to avoid bill shock and on ensuring that bills are accurate.

However, while it is frustrating that billing continues to be such a major cause of complaint, and that so many customers feel the need to complain about their service experience, there is also a great opportunity in this to be one of the customer experience good guys. If Ofcom make good customer experience and dispute resolution more transparent then it means that those that have inadequate performance in this area will be exposed.

Consider the sums: not just the cost of handling disputes, but also the cost of churn. According to Ofcom 23% of the UK adult population has complained and 30% of these complaints were unresolved equating to 6.9% of adult population or over 3 million people. Of these 32% (that is, 2.2% of UK adult population) had churned as a direct result of the complaint – equating to around 1 million people. A further 29% or around 870,000 people were intending to churn. This is a huge opportunity in a saturated market where further subscriber growth comes from poaching customers from another supplier.