Customer-centricity in telecoms a necessity to stay ahead - KPMG

Revenue growth from voice-based services is tapering down, with more and more customers demanding data services.

While in most African states voice is, and will continue to be, the dominant business for telecom service providers, average revenue per user (ARPU) is declining because of these challenges and enhanced competition.

KPMG has built a significant practice in the telecoms industry in Africa. Its Africa Telecom Group (ATG) is a joint venture between key KPMG member firms from Africa, Europe, the Middle East and India. Each brings specific knowledge and expertise in the telecommunications industry to the table, creating a centre of excellence that can help clients succeed in Africa.

Focus on customer to sustain business

In response to the sector's challenges, KPMG believes customer focus is essential. "Increasingly, global organisations from services sectors such as telecoms are incorporating customer-centricity in their core business strategy," says Johan Smith, director and head of KPMG ATG. It is imperative for telecom operators in Africa, and elsewhere, to focus on the customer to sustain and grow business. They also need to leverage innovation, and introduce new products and value-added services to manage the ARPU decline and retain a prominent position in the value-chain.

During the 4th Annual Customer Retention and Profitability Summit held during July in Johannesburg, KPMG experts presented their thoughts on customer-centricity, innovation and enhancing profitability. A panel discussion with African telecom service providers agreed that value-added services are now practically part of the core proposition. Further discussion led to an agreement that telecom operators need to collaborate significantly more with ecosystem players over and above usage-based and bolt-on value-added services.

Operators must innovate continuously

The panel also recognised the impact of social media and over-the-top contenders, and the need for telecom operators to innovate continuously to retain value. Innovation needs to be institutionalised in the telecom service provider's DNA, and has to be centred on the customer, taking into account the importance of social media.

Joaquim Ribeiro, senior manager in management consulting at KPMG in Portugal, also presented at the conference. "I think we should discuss the philosophy of improved customer service but not at any cost. Cost to serve has been increasing constantly with no direct link to increasing ARPU."

KPMG has been very active in the operating expense (OPEX) and capital expenditure (CAPEX) optimisation space without losing focus on customer-centricity and core strategy. "Customer-centricity is no longer a mere buzzword in the telecoms industry. It has become a business necessity to stay ahead of competition," Smith concluded.