With 42 per cent of mobile customers in the GCC using mobile Internet and apps, compared to 36 per cent in the US and 25 per cent in Europe, there is a clear opportunity for regional operators to tap into, according to a new report.
The broad array of customer demands challenges GCC telco operators to make strategic choices, added the report titled “The GCC Telecom Consumer of the Future” recently released by leading management consultants A.T. Kearney.
Globally, today’s mobile users are digitally very active, moving away from classic voice calls toward data and app usage. It is no different in the GCC, except that digital usage in the region is well above the European and US average. The digitally savvy nature of GCC residents means that voice calls only make up a small part (20 per cent) of total smartphone usage.
GCC users opt to use apps for calls more frequently than their counterparts in Europe—76 per cent of the time versus 57 per cent respectively—and nearly double the number using their phones for Internet usage compared to Europe, the report said.
“Interestingly, the profile of mobile users in this region is different than what we see elsewhere. On the one hand, this region has some of the most avid digital users, and yet on the other hand, the users here are less likely than their peers in Europe and the United States to make purchases via their phones,” said Marc Biosca, A.T. Kearney partner and co-author of the report.
This is confirmed by another recently released A.T. Kearney paper estimating the GCC e-commerce growth potential at 30 per cent annually over the next five years.
In addition to the positive impact regional e-commerce will have on the demand for mobile Internet, A.T. Kearney’s research found that, one-third of GCC customers are willing to pay for faster Internet or a more holistic customer service. This dovetails with the significant demand for pay-TV and video-on-demand in the region. Currently less than 16 per cent of consumers have these services, but one-quarter of respondents said they plan to buy them in the future.
Lancelot Sursock, a principal at A.T. Kearney and co-author of the report, said: “In this market of digital-hungry users, it is important for operators to understand the evolving user needs and selection criteria. This opens up new strategic options to drive revenue generation and improve bottom-line results.”
The research identified two main factors influencing GCC users’ choice among mobile providers: network quality (30 per cent) and price (28 per cent). Customer service, security, and sales experience rank far lower. When it comes to in-store customer experience, it is minimal waiting times that attract users. Surprisingly, 20 per cent of respondents said they’d be happy with no customer service at all.
Commenting on what the findings meant for GCC operators, Marc Biosca said: “Operators clearly have a choice to make. Do they ride the digital wave offering a high-speed quality network combined with digital offerings, or do they focus on delivering world-class, low-cost, no-frills connectivity services?”
“They are currently trying to cover all the bases, but becoming a regional cost leader requires up to a 50 per cent reduction in costs and is not compatible with a differentiated, high-quality digital service offering. Telco operators are at a strategic crossroads and choices will need to be made,” Biosca concluded.
Copyright 2019 Al Hilal Publishing and Marketing Group