Amdocs Survey: Wireless Service Providers Say The "Capacity Crunch" Impacts Brand Perception
75 percent of wireless service providers cite end-to-end quality of service design as a top challenge; Network expansion underway.
- (1888PressRelease) November 13, 2010 - ST. LOUIS - Amdocs (NYSE: DOX), the leading provider of customer experience systems, today released the results of a survey that outlines the scale and significance of the data capacity crunch for mobile network service providers and their customers. The survey examined wireless service providers' strategies for coping with the increasing demand for data on their networks while maintaining acceptable service quality. Key findings include:
• Mobile networks are struggling to cope: More than 60 percent of wireless service providers interviewed are experiencing data congestion, with 20 percent registering severe overload at specific times. Service providers in the Middle East and Africa report that this overload poses serious consequences for their brand reputation and has led to an increase in customer complaints around service quality; Asian and American operators say it is contributing to churn.
• Data demand is driven by smartphones and laptops with mobile broadband: In the Americas and Europe smartphones are driving data demand, accounting for more than 40 percent of total data consumption. In Asia, the Middle East and Africa, laptops with mobile broadband is the key driver. A further factor fuelling demand is flat-rate data tariffs where "bandwidth hogs," although comprising only an estimated 2-3 percent of the customer base, are consuming approximately 30 percent of the network's capacity, contributing to further service degradation for the overall user base.
• Quality of service design is a major challenge: 75 percent of wireless service providers surveyed view end-to-end quality of service (QOS) design - which ensures a satisfactory customer experience during a voice call or data transfer - as having the greatest impact on their bottom line through increased customer support costs and customer churn. Respondents stated that specialist planning, design and capacity management tools are required to prevent issues such as loss of signal, cross-talk and slow service response time.
• Heavy network expansion is underway; Ethernet is a priority: Wireless service providers see building out additional network capacity as essential, with 97 percent of those surveyed stating they intended to roll out Ethernet to alleviate congestion. Respondents said that the gap between the growth in demand for capacity as compared to revenues received for data services was a matter of concern when considering extra investment.
"Wireless service providers want to provide a good quality of service for customers, but the challenge they face is that they have been caught in a 'perfect storm' with data demand doubling year on year, yet revenues are static due to flat-rate pricing," said Teresa Cottam, research director of Telesperience, the firm that conducted the research. "By blindly throwing capacity at the problem, it becomes harder for operators to cope with data growth. A smarter approach to capacity management and network planning is needed for future success, with quality of service providing the competitive differentiator."
"The capacity crunch is not just a network problem, it's a widespread commercial and brand issue that wireless service providers need to address in the short and long term," said Rebecca Prudhomme, vice president of product and solutions marketing at Amdocs. "While service providers are adding extra capacity to their networks in the short term, they need to explore policy management solutions to enforce traffic flows and enable premium rate charging. But policy management on its own will not solve the problem. It's about combining policy with charging capabilities and network knowledge. Rigorous engineering of network capacity is critical to ensure customer experience is not compromised and that brand equity is protected."
The survey took place last month and is based on 30 interviews with senior executives and network planners from 30 wireless service providers worldwide. The survey was conducted by Telesperience, a UK-based telecoms analyst firm focused on how technology impacts the operational and commercial performance of telecom service providers and the customer experience they deliver.
• Download the survey results and view the strategies for solving the capacity crunch
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Amdocs is the market leader in customer experience systems innovation. The company combines business and operational support systems, service delivery platforms, proven services, and deep industry expertise to enable service providers and their customers to do more in the connected world. Amdocs' offerings help service providers explore new business models, differentiate through personalized customer experiences, and streamline operations. A global company with revenue of $3.0 billion in fiscal 2010, Amdocs has over 19,000 employees and serves customers in more than 60 countries worldwide. For more information, visit Amdocs at www.amdocs.com
Amdocs' Forward-Looking Statement
This press release includes information that constitutes forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995, including statements about Amdocs' growth and business results in future quarters. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be obtained or that any deviations will not be material. Such statements involve risks and uncertainties that may cause future results to differ from those anticipated. These risks include, but are not limited to, the effects of general economic conditions, Amdocs' ability to grow in the business segments it serves, adverse effects of market competition, rapid technological shifts that may render the Company's products and services obsolete, potential loss of a major customer, our ability to develop long-term relationships with our customers, and risks associated with operating businesses in the international market. Amdocs may elect to update these forward-looking statements at some point in the future, however the Company specifically disclaims any obligation to do so. These and other risks are discussed at greater length in the Company's filings with the Securities and Exchange Commission, including in our Annual Report on Form 20-F for the fiscal year ended September 30, 2009, filed on December 7, 2009 and in our quarterly 6-K forms furnished on February 8, May 13 and August 9, 2010.
Weber Shandwick for Amdocs
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