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How can operators regain trust?

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Operators provide such a great connection between people and each other and people and the world –yet they are awful at communicating themselves. John Strand explains how this is causing them huge problems in the age of net neutrality and general distrust of “the man”

it’s an irony that the world’s operators, which provide communication services, should frequently do such a poor job at communicating. There are few services in the world more demanded than mobility and connectivity and yet operators who provide these essential capabilities are maligned.

Given that people love to communicate, they should love their mobile operator, the same way they love their phones, cars and other personal devices. So what of these challenges operators face and how they could address them?

Operators have lost customers’ trust because of the proliferation of misguided regulation that drives a wedge between operators and their customers and because of a lack of leadership in the policy dialogue. 

There is no doubt that misguided regulation distorts reality and creates perverse incentives for operators.

Around the world, Strand Consult sees a number of countries where only few network operators can get a business case. Most lack the right strategy. When a market is driven primarily by price, there is a race to the bottom.

For example, regulation on the wholesale wireless market may encourage service-based competition at the expense of operators that build networks. Large players may use wholesale regulation to support service-based competitors, making it more difficult for fledging network operators to get a business case.

When operators compete on price, this tends to strengthen the position of the incumbent or the player that with the largest network, the opposite outcome of what regulators intend.

Adding insult to injury, a number of regulators, goaded by so-called consumer advocacy groups, restrict the ways operators can compete by prohibiting creative marketing and partnerships, particularly zero rated programs.

Again, this move tends to strengthen the position of the large and incumbent players at the expense of upstarts, because it’s generally smaller providers that need creative marketing in order to appeal to an audience.

Defenders declare zero rated programs as discriminatory, but on the other hand, consumers love lower prices and expect zero rating across a range of products and service they consume, whether it’s buy-one-get-one free offers, rebates, free trials, discounts, early-bird specials, free Fridays, and the like. Indeed advertising in Google enables the zero rating of search.

Premium SMS was such a model that allowed content providers to earn billions of euros by partnering with operators. Moreover operator partnerships with application and service providers are key to help startups make their innovation known.

Operators can help startups improve distribution, lower marketing costs, eliminate billing costs, and increase acquisition.

Consider the case of Spotify. By partnering with an operator, it can save on expensive marketing and advertising costs. Spotify need not maintain an expensive and cumbersome billing system, which the operator can provide instead.

Spotify’s conversion rate is higher when users automatically pay through their mobile bill. Because the operator does the heavy lifting, Spotify can concentrate on providing a cool service and conserving cash to pay artists.

Few things are more powerful than communication, and in this regard, anti-telco and anti-corporate advocacy organizations create marketing and storytelling that appeal to people’s fears and emotions.

These highly organized, well-funded, and networked organizations have succeeded create a potent but false picture of operators on a number of issues. Storytelling can endure even in the face of contrary fact and evidence.

Though a year long EU investigation of the internet content and transit market yielded no evidence of abuse, many still believe that net neutrality violations are rampant and that strict controls on needed on operators. 

It’s too bad that operators didn’t coin the term “Open Internet” themselves.

It a key failing of the various trade associations and PR organizations that have not been able to communicate the value operators provide to society with an accessible turn of phrase. The fact of the matter is that operators enable the open internet every day and increasingly so.

The growth of net neutrality as a global policy issue and the ability of groups to create international campaigns against operators reflects that there is increasing connectivity, not the opposite.

A case in point is the Council of Europe, the body charging with enforcing human rights for the EU. In 2008 it noted, “ISPs in providing the basic infrastructure and basic services that allow users access and use the Internet and thereby exercise their rights to benefit from the information society, deliver services with a significant public service value to society”. But just a few years later, the organization became is a key actor to punish telcos through net neutrality rulemaking.

Operators have failed to frame the issues, and as such, are in a defensive position when it comes to debate. This makes them increasingly risk-averse and unwilling to engage in meaningful dialogue, a vicious cycle of lack of leadership and lack of decision making.

Four ways operators can get the trust back
There are many strategies operators can take to communicate, however some may require specialized skills. A number of operators are reluctant to engage with customers, politicians, and regulators because they fear conflict and controversy. However these things can be managed constructively, and controversy, as a foundation of innovation, propels society forward.

1. Operator-led Dialogue
In Denmark, the operators association took the proactive step to start their own dialogue on net neutrality, inviting the regulator, content providers and consumer groups to the table. This approach has kept rulemaking at bay, and no net neutrality violations are on record since the process started four years ago. Denmark had been spared the debate that has consumed other countries, and energies can be directed instead to a conversation about broadband enabling health, education, employment and other desirable goals.

2. SMS Voting

There has been media buzz about the 4 million responses submitted to the FCC on net neutrality rulemaking. However few have been critical of the content or quality of the responses, perhaps three-quarters of which are from letters and petitions curated by advocacy groups. Many comments are obscene or unrelated. At best there are a few hundred substantive responses. 

Rather than leave important discussions to self-interested advocacy and lobby groups, operators should engage directly with their customers. Operators can gather votes and feedback from their customers via SMS. Questions might include: Would you approve of a price increase across the board so that providers such as Netflix can get free transit? Should pricing be dependent on usage, for example should grandmothers and gamers pay the same even if they consume different amounts of data? Should the FCC regulate the internet? Should VOIP providers be required to support 911 emergency calling? Should internet platforms such as Google and Facebook maintain the same standards for data protection and privacy as telecom operators?

3. Transparency Reports

NSA and surveillance has created global controversy. However many governments, while overtly condemning the activities of the NSA, may explore their own means to monitor citizens and networks. Long term this is a dangerous development for operators. They do not want to become the pawns of government nor to act in ways that run counter to the interests of their customers and shareholders. Operators are in a difficult position because on the one hand, their rights to operate are granted by the state, and on the other hand, consumers may hold operators responsible for governments’ activities, however unfair.

A number of operators now produce transparency reports, disclosing the information that governments’ demand. This provides a valuable way for an operator to demonstrate its stewardship for consumers and society.

4. Community-based frameworks for mobile infrastructure

Given the importance of telecom infrastructure in society, it would seem that governments and regulators would take proactive steps to facilitate operators’ deployment of networks. The reality is the opposite. In fact it has become increasingly difficult, expensive, and time-consuming. To erect a single mobile mast can take 12-18 months and cost operators more than €200,000.

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