1. services »» Keeping up with the smartphones
Why superior network
performance matters
Dissatisfaction among smartphone users has led to rapidly increasing demand for better network quality.
This makes superior network performance a key differentiator for operators who want to attract new
users – and turn existing ones into loyal brand promoters.
▶ Close to 90 percent of smartphone users respond well with users’ desire to be con-
experience problems when using their de- stantly connected and have a high-quality
vices, according to research by Ericsson Con- experience while using smartphones. Poor
sumerLab. Overall, half of the users surveyed speed and coverage were perceived as main
said they encountered quality issues on a contributors to the problems, and together
weekly basis. Although most of the problems form the most important drivers behind
are considered minor, they are occurring far greater mobile-broadband use among both
too often and users perceive them as irritat- casual and frequent users.
ing or even frustrating. Ericsson ConsumerLab has also found that
The most frustrating problems by far are only about 51 percent of smartphone users
internet-connection issues, app crashes and are highly satisfied with their networks,
slow speeds; these results cor- meaning that the experience of the other half
can definitely be improved. Keeping all this
in mind, how can operators develop high-
quality networks that are smart-
phone- and tablet-ready
– and that
52 • EBR #3 2012

2. Keeping up with the smartphones «« services
Do you experience issues with your smartphone?
Telstra in Australia
Customer
satisfaction increase
▶ Having a high- quality and
No Yes superior network can definitely
13% 87% pay off – Telstra – Australia’s
largest operator, has found. Not
only was Telstra ranked highest in
overall network quality according
to the J.D. Power and Associates
2012 Australian Wireless Network
Quality Study [2], it also consist­
Source: Ericsson
ently delivered the country’s top
mobile-network speeds [3].
Telstra’s superior-performance
can meet the challenges posed by users’ new mobile-broadband ecosystem is the oper- network has resulted in business
demands? ator’s network-infrastructure strategy, results well ahead of the com­
which needs to be complemented with a petition. For the financial year
Managing user perceptions device strategy. High-end devices drive ending June 30, 2012 for mobile
Near-ubiquitous coverage and a fast and re- network capability, while low-end ones subscriptions, the operator
liable connection are the most important drive capacity. enjoyed strong year-on-year
revenue growth (8.5 percent),
drivers of smartphone user satis­ action. In
f Network design – The worldwide surge
33 market-leading profitability (36
fact, in a separate qualitative study carried in smartphones and smart mobile devic- percent EBITDA), growing market
out in ­Indonesia, Ericsson ConsumerLab has es has placed new and ever-changing de- share (signing up 1.6 million new
found that mobile-broadband users are will- mands on mobile networks and systems. customers), and increased
ing to pay 25 percent more for a doubling of To deliver true in-service performance, customer satisfaction (customer
their network speed. operators should see network design as a complaints reduced by 26 per­
cent) – all achieved in a highly
Other factors, such as price plans and de- constantly evolving process.
mature market with over 130
vice choice, are considered less important 33 implementation – Rapid implemen-
Swift
percent mobile-subscription
among users. Taking steps to move users tation through automation is fueled by the penetration.
from a low to a high satisfaction level would need to decrease operational costs by au-
dramatically reduce churn. If mobile opera- tomating simple and repetitive tasks, and Vivo in Brazil
tors are to keep costs under control, it is even by the need to reduce margins of error by Unwavering focus
more critical for them to retain existing us- automating complex tasks. on network quality
ers than to acquire new ones. 33n i n g to ma xi m i z e cu r r e nt ass ets –
Tu
▶ Vivo, Telefónica’s
An operator’s net promoter score (nps), O
­ perators can secure optimal network Brazilian operation, has for
or likelihood of brand promotion by users, performance and user experience by con- years focused its strategy on
can be calculated by plotting the per- tinuously tuning their networks to ensure network quality and coverage,
centage of users who would act as adequate capacity and coverage to meet according to the case study Vivo
e
­ ither detractors or promoters of a user needs. The operator can then main- focuses on network coverage and
quality to increase customer
brand. ConsumerLab has found that tain the resulting competitive advantage
retention and loyalty from re­
highly satisfied users can increase an oper- by ­ eveloping additional networks using
d search firm Informa Telecoms &
ator’s nps by at least 40 points. the same product setup, leading to im- Media. This has translated into
proved performance with minimum addi- sustainable growth for the
five factors for improved performance tional capex. When tuning networks, op- operator, mainly in the high
To satisfy their users, operators need to de- erators can simplify the required tasks by average revenue per user (ARPU)
velop strategies that result in best-in-class focusing on selected relevant kpis, meas- postpaid segment. In the fourth
quarter of 2011, Vivo’s share of
network quality, speed and coverage. Erics- uring them, and then converting the meas- Brazil’s postpaid market grew to a
son recommends that this work be based on urements into actionable improvements market-leading 33 percent, while
the following five factors: to be made. its overall ARPU carried a 10
33Cutting-edge products – Superior prod- Service assurance – Total service assur-
33 percent premium over that of its
ucts with advanced features and algo- ance means more than simply resolving closest competitor.
rithms ensuring a high-quality user expe- the problems experienced by users – it also Furthermore, Vivo’s churn rates
have remained consistently low
rience even in the most extreme situations involves proactively delivering better ser-
(around 3 percent), despite the
are central to high-performance net- vice quality. Service-quality management fact that it has achieved out­
works. Benchmarking various has traditionally relied on aggregated ser- standing growth in the prepaid
n
­ etwork vendors gives a good vice kpis, such as average call-drop rates, segment as well.
indication of which prod- but there are tools in the market that en-
ucts are the best. At able the drill-down of user experience to
the core of the an individual level. This provides greater
flexibility and insight for tracking specif-
ic problems, and makes it possible to pri-
iSt
ock
ph
oritize faults that influence service.
oto
EBR #3 2012 • 53

3. services »» Keeping up with the smartphones
Priority is based on user impact – tak- http://www.ericsson.com/res/docs/2011/111014_smartphone_
ing into account value metrics derived brochure.pdf
Quality in the • Ericsson, 2011, Network 4Profitable Connectivity,
eyes of the user from other information systems.
http://www.ericsson.com/res/docs/whitepapers/wp-network4.pdf
▶ A good mobile-broadband • Ericsson, 2011, Differentiated Mobile Broadband,
users blame the networks http://www.ericsson.com/res/docs/whitepapers/differentiated_
experience includes not only
superior speed and coverage, but Users are highly sensitive to the quality of mobile_broadband.pdf
also a number of implicit their mobile networks. The good news is that
Author
qualities, namely: operators can significantly enhance user per-
▶ Andres Torres is
ceptions of network quality by addressing the a Strategic Marketing
▶▶ onvenience – Users want to
C top three problems experienced with it: in-
carry out tasks involving little Manager for Ericsson’s
effort or difficulty. Devices and ternet-connection difficulties; app and ser- Region South East Asia and
apps play an important part vice crashes; and slow network speeds. Al- Oceania. Based in Australia,
he is often presented with
here, but so do the network though not all of these issues are under their
and its speeds. opportunities to highlight the importance of
direct control, mobile-network operators performance in mobile-broadband networks to
▶▶ mmediacy – Latency and slow
I need to realize that users often blame the customers. Torres has been working for Ericsson for
speeds must be minimized.
Some users, when encount­ networks for most of their device problems. well over a decade, and in his previous roles in the
As a result, carriers must take the lead and Ericsson Global Services organization, he
ering a problem, will either
participated in numerous CDMA2000, WCDMA/HSPA
wait or try again, but as many engage with other players in the ecosystem and LTE projects in four continents, where he has
as 40 percent of them will put – such as device manufacturers, infrastruc- been a first-hand witness of the implementation of
their phones away, resulting in
reduced usage – and poten­
ture vendors and application developers – to superior performing networks.
deliver a truly superior user experience. ● (andres.torres@ericsson.com)
tially, over time, a negative
feeling about mobile-
broadband services. Author
References
▶▶ implicity – Operators must
S 1. Ericsson, 2012, Traffic and Market Report, http://www.ericsson.com/ ▶ Warren Chaisatien is
carefully select the range of res/docs/2012/traffic_and_market_report_june_2012.pdf a Strategic Marketing
devices they want to offer. 2. J.D. Power and Associates, The McGraw-Hill Companies. Australian Manager for Ericsson’s
Smartphones, tablets and Wireless Network Quality Study, retrieved July 10, 2012, http://www. Region South East Asia and
other mobile devices must be jdpower.com/content/press-release/Z6zHvAi/2012-australian- Oceania, currently focusing
easy to use. on mobile broadband and
wireless-network-quality-study.htm
▶▶ eliability – From the user’s
R LTE, business-model innovation, and the telecom
3. Telstra, NextG Mobile Network Works Better in More Places, retrieved
perspective, quality is defined cloud opportunity. He has more than 15 years of
July 10, 2012, http://www.telstra.com.au/mobile-phones/coverage- international ICT industry experience, with an in-
as having access to the net­ networks/network-information/nextg/
work anytime, anywhere; it depth understanding of market dynamics, operator
is the service provider who is strategies, technology evolution and business
Brochures and white papers implications. Before joining Ericsson in 2010,
responsible for delivering
• Ericsson, 2012, Profitable Prepaid Smartphones, Chaisatien was a telecom analyst and consultant in
this experience.
http://www.ericsson.com/res/region_RASO/docs/2012/ericsson_ Canada and Australia. He holds an M.Sc. in
prepaid_paper_june.pdf engineering management from the University of
• Ericsson, 2011, Why Smartphones Need Smart Networks, Technology, Sydney. (warren.chaisatien@ericsson.com)
What is a superior network? turn complex structures into simpler ones. Converged platforms that
have simple architecture and few interfaces can be combined with cen-
To provide networks that offer high levels of quality, tralization, standardization and automation to keep opex, capex and op-
operators should focus on making them truly erational efforts down while enabling innovation.
smart, simple and scalable, and they ensure networks
▶ Scalable
deliver superior performance.
The increased use of mobile broadband is spawning changes in markets,
▶ Smart
businesses and technology. With mobile-broadband demand projected
Smart networks allow operators to gain a better understanding of users, to grow by 60 percent annually for the next five years [1], operators need
their preferences and subscriptions, as well as the devices, apps and con- to create scalable solutions that allow business to grow in line with – or
tent being utilized – and to act on this knowledge. They allow operators even ahead of – the demand curve. Four growth dimensions constitute
to gain differentiation and grow their business. Smart networks also help network scalability: bandwidth, devices, signaling and analytics. In short,
operators reduce costs because they enable optimized use of network operators must be able to ramp up their networks quickly to meet ex-
resources. These networks include more than just better network infra- ponential demand without service deterioration.
structure; they also encompass support systems that provide the flexibil-
ity needed to respond to changing user behaviors and emerging busi- ▶ Superior performance
ness models. To achieve this objective, operators need solutions that are Broadband is the highway to the cloud. Its performance determines the
smart from end to end; the right partnerships are key in this process. user experience for all things digital and, importantly, it plays a pivotal
role in operators’ ability to monetize that experience. User experience can-
▶ Simple not be tested in a lab, since it is the actual, real-life network performance
New business opportunities can emerge from almost anywhere, and are in terms of speed, latency, resiliency and capacity that influences user sat-
sometimes unpredictable. Operators need to be agile and able to take isfaction. Optimal network design, tuning and assurance are critical
advantage of opportunities when they arise, and to do so, they need to to realizing networks that offer superior performance.
54 • EBR #3 2012