www.pipelinepub.com Volume 11, Issue 5

COMET News: November 2014By Jesse Cryderman

Customers Yearn to Churn

Global telecom operators need to shape up theirmobile broadband capabilities, or they risk losingcustomers en masse. That's the gist of a newreport from Ovum, which cautions that up to halfo f global mobile customers are poised to churn.The warning is based on Ovum's global survey,2014 Telecoms Customer Insights. According tothe survey, about a quarter of global mobilecustomers definitely plan to change providers inthe next 12 months, and another quarter say they might.

“The research provides one of the largest and most unique global data sets thatilluminates the significant differences in users’ churn patterns in incredible detail,” saidAngel Dobardziev, practice leader at Ovum. For instance, twice as many customersof Airtel India or LG U+ in Korea plan to churn more than the global average of 23%,according to the survey, which polled more than 15,000 consumers in 15 globalmarkets. In contrast, customers of Vodafone Germany or NTT DoCoMo in Japan aremuch more loyal, with only about 1 in 10 indicating they plan to switch operators.

A key takeaway from the survey: mobile broadband quality of experience is the chiefdriver for churn. Slow connection speeds have irked customers, and 37 percentindicate that this is a churn-worthy offense. This is particularly painful for customerstoday because the importance of being online is acknowledged worldwide.

“Being online is by far the most important thing in consumers’ digital media lives,”says Dobardziev. “When we asked consumers to rate a range of activities on a scalefrom ‘essential’ to ‘unimportant’, browsing the Web came top, with nearly 6 out of 10consumers rating it as essential. By comparison, an old favorite such as watching TVwas rated by only 3 out 10 consumers as essential, scoring as less important thanreading the news (50% of consumers), reading a book (45%) and listening to music(42%).”

While much has been written about the cool-factor of the Apple iPhone, the surveyalso reveals an interesting phenomenon related to the trendy device. iPhone users aremuch more likely to churn than users of other devices, and the main reason is to getfaster data speeds.

As CSPs expand their borders and become global digital lifestyle providers, they mustdeepen their understanding of consumers’ propensity to switch providers, and not justat home. “This must be combined with an evaluation of drivers for customer churnacross different segments, markets and providers, with a view to gaining insight onthe best, and worst, practices – despite differences in local market contexts andlevels of competition,” said Dobardziev.

FTC says AT&T's Unlimited Data is deceptive, misleads customers

On October 28, the Federal Trade Commission filed a federal court complaint againstAT&T Mobility, LLC, charging that the company has misled millions of its smartphonecustomers by charging them for “unlimited” data plans while reducing their dataspeeds, in some cases by nearly 90 percent.

The FTC’s complaint alleges that AT&T failed to adequately disclose to its customerson unlimited data plans that, if they reach a certain amount of data use in a givenbilling cycle, AT&T reduces – or “throttles” – their data speeds to the point that manycommon mobile phone applications – like web browsing, GPS navigation and watchingstreaming video – become difficult or nearly impossible to use.

“AT&T promised its customers ‘unlimited’ data, and in many instances, it has failed todeliver on that promise,” said FTC Chairwoman Edith Ramirez. “The issue here issimple: ‘unlimited’ means 'unlimited'.”

According to the FTC’s complaint, AT&T’s marketing materials emphasized the“unlimited” amount of data that would be available to consumers who signed up for itsunlimited plans. The complaint alleges that, even as unlimited plan consumersrenewed their contracts, the company still failed to inform them of the throttling

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program. When customers canceled their contracts after being throttled, AT&Tcharged those customers early termination fees, which typically amount to hundredsof dollars.

The FTC alleges that AT&T, despite its unequivocal promises of unlimited data,began throttling data speeds in 2011 for its unlimited data plan customers after theyused as little as 2 gigabytes of data in a billing period. According to the complaint, thethrottling program has been severe, often resulting in speed reductions of 80 to 90percent for affected users. Thus far, according to the FTC, AT&T has throttled atleast 3.5 million unique customers a total of more than 25 million times.

According to the FTC’s complaint, consumers in AT&T focus groups strongly objectedto the idea of a throttling program and felt “unlimited should mean unlimited.” AT&Tdocuments also showed that the company received thousands of complaints aboutthe slow data speeds under the throttling program. Some consumers quoted thedefinition of the word “unlimited,” while others called AT&T’s throttling program a “baitand switch". Many consumers also complained about the effect the throttling programhad on their ability to use GPS navigation, watch streaming videos, listen tostreaming music and browse the web.

The complaint charges that AT&T violated the FTC Act by changing the terms ofcustomers’ unlimited data plans while those customers were still under contract, andby failing to adequately disclose the nature of the throttling program to consumers whorenewed their unlimited data plans.

FTC staff worked closely on this matter with the staff of the Federal CommunicationsCommission. The Commission vote authorizing the staff to file the complaint was 5-0.

AT&T was quick to respond, calling the allegations "baseless".

“The FTC’s allegations are baseless and have nothing to do with the substance of ournetwork management program," said Wayne Watts, Senior Executive Vice Presidentand General Counsel, AT&T. "It’s baffling as to why the FTC would choose to takethis action against a company that, like all major wireless providers, manages itsnetwork resources to provide the best possible service to all customers, and does it ina way that is fully transparent and consistent with the law and our contracts.

“We have been completely transparent with customers since the very beginning. Weinformed all unlimited data-plan customers via bill notices and a national press releasethat resulted in nearly 2,000 news stories, well before the program was implemented.In addition, this program has affected only about 3% of our customers, and before anycustomer is affected, they are also notified by text message.”

Stay tuned to the Pipeline News Center for more on this story as it develops.

Internet of Things (IoT) ramping up

The Internet of Things (IoT), or what Cisco calls the "Internet of Everything," promisesto transform the modern world and the way we interact with it. In October, Telefónicaunveiled one of the first mass-market consumer IoT solutions, Thinking Things, whichcould accelerate the speed of adoption of the technology. The innovative product islike Lego blocks equipped with various sensors and connectivity, making it easy foranyone to create a smart solution - it doesn't require any specialized infrastructure orprogramming knowledge.

Speaking of Cisco, last month the company linked up with Tieto, the largest ITservices company in the Nordic countries, to collaborate on the Internet of Everything.Tieto is the first Nordic company to join the application developer community forCisco's IOx, which provides an application platform for running Linux-based softwaredirectly on Cisco's tested, high-grade IoT network platforms.

"With machines and sensors producing an ever-increasing amount of data, companiesare facing an unprecedented challenge. They need to act in real time with theincoming data and work within the limits of available bandwidth. In order to retain lowlatency and high QoS, data can be processed locally closer to the data source, be it afactory supply chain, traffic system, power distribution system, basically anything thatproduces data," said Kip Compton, Vice President and general manager of the IoTSystems and Software Group at Cisco. "With Tieto, we now have the first relationshipin place in the Nordics to develop fog computing solutions that will alleviate the datatsunami and bring broader Internet of Everything benefits to key industries.

VoLTE: Coming to a phone near you

After many delays and false starts, Voice over LTE (VoLTE) is finally going live inmobile networks. The protracted time frame for VoLTE rollouts has revealed thecomplex challenges that operators face, and the amount of work required to getnetworks up to snuff. Ericsson has helped operators like Telefónica prepare theirnetworks for commercial VoLTE, and Huawei recently worked with KPN and China

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Mobile to demonstrate an international roaming VoLTE call. In Hong Kong, ZTEenabled CSL Mobile Limited to launch its VoLTE service in August.

KDDI's VoLTE service is prepped for a December debut. The service, branded auVoLTE, looks like it will incorporate some features of Rich Communications Suite(RCS), such as Sync Call, a new service that allows callers to share their smartphonescreens, location information, camera images, and more with a recipient during a call,and Voice Party, which allows simultaneous group calls with up to 30 people.

Pipeline's COMET Executive Summit

Top executives from leading service providers and technology innovators met in SanDiego at the beginning of November for the Pipeline COMET Executive Summit. Theevent brought together representatives from BT, Level 3, Verizon, AT&T, Amdocs,Cognizant, Comcast, TIERONE, Nokia Networks, Cisco, Quantellia, Avanade, ICTIntuition, GENBAND, and New Paradigm Research Group to advance thoughtleadership in Communications and Entertainment Technology (COMET).

Leaders from Verizon, AT&T, Comcast, and British Telecom discuss key technical challenges they arefacing during Pipeline's COMET Executive Summit in San Diego

The inaugural event, which took place at the historic U.S. Grant Hotel in sunny SanDiego last week, offered participants ample and exclusive networking opportunities,discussion forums, and thought leadership around the hottest issues in the COMETspace. Topics included customer experience management (CEM), network security,big data, enterprise strategies, elastic and agile service architectures, WebRTC,virtualization, and much more. The unique interactive and in-depth format was a greatsuccess by all accounts.

"I’m glad I had the opportunity to be a part of this event," said Craig Clausen, principalanalyst and executive Vice President, New Paradigm Research Group. His sentimentwas also shared by fellow analyst Nancee Ruzicka of ICT Intuition who told Pipelinethat the COMET Executive was the right group of industry stakeholders. Participantsfrom some of the world's largest service provider and technology developerorganizations also echoing their comments.

When asked about the "deconstructed" format of the event, Dr. Lorien Pratt fromQuantellia simply replied "(Pipeline) nailed it." We could agree more, and look forwardto many more COMET Summit events in the years to come.

NOT FOR DISTRIBUTION OR REPRODUCTION© 2014, All information contained herein is the sole property of Pipeline Publishing, LLC. Pipeline Publishing LLC reserves all rights and privileges regarding theuse of this information. Any unauthorized use, such as distributing, copying, modifying, or reprinting, is not permitted. This document is not intended forreproduction or distribution outside of www.pipelinepub.com. To obtain permission to reproduce or distribute this document contact sales@pipelinepub.com forinformation about Reprint Services.