Increasing the precision of network CAPEX
Telenor in Denmark has a particularly strong position on the business market, largely due to its highly reliable network. While consumers in Denmark are particularly price-centric, Telenor isn’t the cheapest provider on the market. In spite of this, the operator’s consumer sub-brand “CBB” enjoys the highest Net Promoter Score (NPS) – an important measure of customer satisfaction – in Denmark.
Telenor stands out from competitors by providing high level of customer service, direct sales (especially relevant for business clients) and high network reliability. Although TDC/YouSee claims it provides highest mobile speeds, Telenor believes this is not the whole story when it comes to consumer satisfaction.
Although the growth of data usage is already today significant in Denmark, Telenor’s expectation is that usage could grow even faster. 70 to 80% of customers have smartphones which is nearing saturation but the app usage will continue to grow and, with ever increasing screen sizes, high quality video streaming is better supported. Telenor plans to improve its insight into what apps are being used and how, to foresee how data usage will grow in future.
Data allowances are generally very high in Denmark but many users are not yet fully utilizing it – most of the video consumption takes place over Wi-Fi at home. Meanwhile many of the consumers are often unaware of when they are using apps and services over the mobile network and when over the Wi-Fi – they consume data as if it was unlimited. Telenor’s recent launch of Wi-Fi Calling blurs these boundaries between mobile and Wi-Fi further.
Although the data traffic growth has been substantial, it has not had any effect on Telenor’s organizational size nor on costs – both are smaller today than before. By managing the network efficiently Telenor Denmark has managed to keep costs in control while scaling up capacity to satisfy customer demand.
Telenor has placed particular emphasis and effort into understanding what is needed to keep customers happy. This boils down to an overall NPS target that also breaks down into key customer segments and sub-brands. By focusing on the customer-driven NPS target, Telenor is also able to avoid over-investing in the network.
In 2013, Telenor decided to radically transform its business in Denmark. As part of this transformation, Telenor would – with the help of partners – redesign and replace all business support systems in order to dispose of legacy systems and simplify the setup. “But more importantly, a significant reason for this transformation was Telenor’s goal to be loved by the customer”, explains Flemming Pedersen, Senior Network Strategist at Telenor Denmark. Telenor did some internal soul searching and evaluated how they should be interacting and doing business with the customers. Telenor’s customer-centricity transformation is now close to three years old.
Another key element in the transformation was the integration of the entire radio network (2G, 3G, 4G) with Telia Denmark’s – creating one common, shared, radio network. “On the investment side, we realized that we will never be TDC (the incumbent operator) and the solution was to build a shared radio network with Telia. It took a lot of CAPEX out and solved a big problem on coverage so that Telenor could instead focus on capacity and services”, continues Flemming. Telenor and Telia also decommissioned redundant sites thus not only saving on CAPEX but also on OPEX. Yet, through the network sharing, the number of accessible sites has roughly doubled for Telenor’s customers.
Internally in Telenor, the state prior to the realisation of the necessary transformation was referred to as the “burning platform”. “Actually I think the burning platform two-three years ago was a blessing in disguise. While working towards the one common network, we found out we could do more – and more efficiently – while also adding quality and preparing for the future”, says Michael Jul Jensen, Senior Manager, Insights and Quality at Telenor Denmark.
Michael gives another example on how following NPS has also helped Telenor prioritise network investments correctly. “Had we followed our old, inside-out thinking to our upcoming rollout in 2017, we would have ended up with a far more distributed rollout than what is actually needed. Instead we focused on investments into areas where customer feedback (and NPS) was negative. We build the network for customers – not for the grid.”
A further example of how NPS provides better accuracy in network operations comes from recent “red flags” in customer feedback about a year ago. “Telenor’s NPS map over Denmark was quite red even though the technical KPIs were quite OK. There were many small problems. We drew our attention to the NPS and went through every detail to understand what were the root causes of dissatisfaction among customers. We were not happy until we found all those small issues that would have been disguised by the network KPIs. There was no big obvious smoking gun, more like several Chinese crackers. But we fixed them all and are now back to green flags all over. NPS really helped us stay sharp, identify the real problems and fix them”, describes Flemming.
“We are far smarter today. We concentrate on what is of value for the customer and understand what level of quality is needed to satisfy customer demand. We now also know our customers in all key segments. But we are far from being done”, explains Michael.
Also, the company culture in Telenor is now customer centric, right down to working processes. Collecting data for NPS has been automated and fully implemented; 6000 SMS messages are sent daily to selected customers in order to collect NPS data. Moreover, Telenor Denmark makes sure to contact each possible customer annually to hear their feedback. Telenor is correlating this NPS input with the technical KPIs measured in the network and can thus – at any given time or location – calculate a probable NPS value based on the technical KPIs.
To complement the NPS data, Telenor has implemented the so called Closed Feedback Loop (CFL); the operator’s network engineers call customers who responded to NPS surveys. “We ask customers further questions and advice on how we could improve our services. But we also speak with happy customers to understand clearly what aspects they most appreciate. We take our customers seriously, listen to them and this has had a very positive impact on churn levels”, highlights Michael. The entire network organization participates in the collection of CFL data. Michael calls this an “educational exercise” – really getting under the skin of the customers.
To proactively call customers has meant that the networks organization now takes the heat off customer service on network-related issues. Ever since the change, Telenor has experienced a reduced call rate to customer service on network-related issues.
According to Telenor, the drawback in using crowdsourced network performance data from apps (such as e.g. Ookla or OpenSignal) is that they often do not correlate with the measured stats derived from customer satisfaction. Michael Jul Jensen gives an example of a customer who always leaves his phone on the first floor at home – since he knows that coverage on the ground floor isn’t sufficient. Having done that, the crowdsourced data collected signals good quality – whereas in reality the customer isn’t happy and was forced to adjust his behaviour.
Michael does not see the point in obsessing about throughput in network tests and marketing the findings: “Few customers think deliberately about writing ‘speed’ in their comments to us, like: ‘Oh, I have too low speed when using my smartphone’. They talk about quality and about availability. And, most importantly, they talk about the quality of voice services and indoor coverage.”
With a shared radio network, Telenor has aimed to differentiate its offering with Voice over LTE (VoLTE) and Wi-Fi Calling – both delivered through the capabilities in Telenor’s core network.
VoLTE usage is increasing and Telenor has been able to “refarm” spectrum from 2G/3G to 4G for greater efficiency. Moreover, VoLTE technology is also needed to handover to and from Wi-Fi for the newly launched Wi-Fi Calling service. Wi-Fi Calling is particularly important for Telenor due to its high market share in the B2B market and in order to overcome the difficulties in providing deep indoor coverage in office buildings.
Small cells are also on Telenor’s agenda – at minimum to satisfy indoor coverage in offices. Wi-Fi Calling is likely not to be sufficient for all applications – such as call centres – since the spectrum is shared.
Telenor’s NPS focus – alongside the action taken based on it – has had a positive effect on churn. In addition, customers that are being called in Telenor’s CFL show clearly their appreciation. It too has a positive effect on churn – 50% of called customers increased their NPS score next time they were asked. Telenor has quantified the exact link between NPS and technical KPIs, and is now working on quantifying the link between NPS and churn. Early learnings show a clear correlation between NPS and churn – a customer scoring an NPS of 10, stays with Telenor three to four times longer, than a customer scoring an NPS of 0.
Michael says: “We are far from being done. But it is truly possible – not only to set technical KPI targets – but also to set NPS and churn targets for your network. And we encourage you to do so. It makes a huge difference!”
This interview was independently conducted by tefficient.