A Customer-Centric Approach to Addressing the Competitive Forces Shaping Mexican Telecom

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Last September, this blog post outlined how deregulation in Mexico’s telecommunications market would fundamentally change the customer experience. These changes include how the entrance of new market participants and new regulations will make it easier for customers to switch carriers. In addition, heightened price competition will place additional pressure on carrier profitability, prompting service providers to maximize the use of customer and prospect data to cater to the needs of individual customers in order to acquire and retain subscribers.

Since then, we’ve seen carriers such as AT&T and Virgin Mobile enter the Mexican market. These and other changes that have since occurred are prompting all carriers in Mexico to revisit their customer strategies.

In January, AT&T closed its $2.5 billion purchase of Iusacell, adding approximately 9.2 million Mexican subscribers along with a wireless network that covers nearly 70 percent of Mexico’s population. AT&T more recently announced its plans to acquire Nextel Mexico for $1.88 billion, minus the company’s debt.

AT&T’s subscriber acquisition strategy in Mexico is to compete on price, as evidenced in part by its recent plan to offer unlimited calling to Mexico at no additional charge as part of its $5 monthly World Connect Value package.

With more than 30 million Hispanic residents of Mexican origin living in the U.S., many of whom have families in Mexico, AT&T’s aggressive pricing and acquisition strategies could have major repercussions for subscriber growth on both sides of the Rio Grande.

Meanwhile, Virgin Mobile, which launched its MVNO service in Mexico in June 2014, expects to add one to two million mobile subscribers over the medium term.

As price competition continues to intensify between AT&T, Virgin Mobile, and other Mexican carriers such as Telefonica and Telmex, telecommunications companies will increasingly need to distinguish their brands to both B2B and consumer subscribers by focusing on customer segmentation, differentiating their respective services, and by delivering exceptional customer experiences.

Service: The Common Denominator

group of business executives talking on mobile devicesWhile price will play a key role in the decision-making process for B2B prospects, each carrier’s service capabilities, including coverage, call quality, and data download speeds, will carry significant value for both B2B and B2C prospects in Mexico. As it stands, many carriers lack coverage in certain states. While some carriers will invest to expand or acquire additional coverage, it will also be useful for decision-makers to use customer and prospect data and analytics tools to develop a stronger understanding of the service features and characteristics that matter most to key customer segments.

Prospect and customer data can also be applied to analytics to identify the right messaging about the price point to be shared with targeted B2B and B2C prospects. This includes gaining a deeper understanding of the elements of pricing that matter most to customer segments (e.g., interest in specific services as expressed in social media or contact center interactions, likely interest in family pack plans, monthly data usage for customers with similar attributes, amongst others).

Carriers that effectively gather and integrate customer data across different touchpoints and functions (marketing, customer service, sales) can enable employees to deliver personalized and relevant experiences to subscribers that can strengthen trust and loyalty.

For instance, a wireless customer visits a carrier’s website in an attempt to troubleshoot a service issue. If the subscriber decides to call the contact center for additional assistance, an associate who is able to view the customer’s channel interaction history can provide immediate and applicable support without forcing the subscriber to repeat the nature of his service issue.

As Mexico’s telecommunications industry continues to evolve, carriers will need to keep a close eye on customer preferences and behaviors and how these insights can be used to shape customer strategy as competition heats up. 

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