The Top Five Impacts of Mexico’s Telecom Deregulation on Customer Experience

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New telecommunications laws recently passed by Congress in Mexico open up competition among carriers and are expected to offer multiple benefits to consumers. Within 60 days of the new laws taking effect, consumers will be able to transfer their existing phone numbers to a new carrier should they switch. Meanwhile, effective January 1, 2015, subscribers will no longer have to pay additional costs for domestic long distance service. This change is expected to save Mexican subscribers more than 22 million pesos (roughly $1.7 million USD) per year.

The massive disruptions that are occurring will also fundamentally change the customer experience between Mexican telecom carriers and consumers. Here, we detail the five greatest impacts that the new laws will have on customer experience:

  1. Customer profitability is under pressure. Currently, the Mexican telecommunications market is dominated by a couple of companies. However, deregulation will pave the way for new entrants offering customer-friendly plans intended to wrest existing customers from the top players. As a result, it will be imperative for all telecom carriers to utilize customer and prospect data to cater to the needs of individual customers in order to acquire and retain subscribers.
  2. Emerging new players and new regulations will make it easy for customers to switch. I’ve had conversations with executives at a few of the major carriers and they are already seeing a lot of churn. At the moment, larger carriers are able to charge less than smaller carriers for their services. However, this will change as future pricing becomes level across the industry. In order to retain customers, carriers will need to use customer data, including customer sentiment shared in contact center interactions and in social media channels to identify, analyze, and act on the potential triggers for churn
  3. Customer trust and customer satisfaction are low and driving customers away. To date, major carriers have been charging customers by each minute of usage, not for the full service that’s offered. This often results in customers paying more for their service since each call ending even a couple of seconds past the next minute is rounded up. This has resulted in customer angst and frustration. To regain and strengthen customer trust and satisfaction, telecom executives should focus on understanding customer needs. This can be accomplished through the use of surveys, as well as  through gathering and analyzing data regarding customer needs. Such information is typically shared through contact center and other interactions between carriers and subscribers. Telecom leaders can then use this data to segment customers along with their value and needs to offer one-to-one value propositions to customers. 
  4. Customer loyalty is under attack. As new market entrants emerge, it will become increasingly difficult for all carriers to hold onto their customers. Knowing who your customers and prospects are and the services that interest them most is a great step toward achieving loyalty. One startup carrier in Mexico is targeting prospects ages 16-to-22 and offering them a variety of options that interest them. These include a range of smartphone apps, flexible pricing plans, as well as monthly service plans instead of charging by the minute. 
  5. Multiple channels, product silos, and multiple touchpoints are creating disjointed customer experiences. Customers expect seamless support regardless of the channel or channels they’re using. Unfortunately, the product and channel silos that exist within many telecom companies make it difficult for contact center associates to quickly and intelligently support customer inquiries. A cloud contact center platform can unify customer-facing applications, making it easy for associates to find and share the information that customers are looking for. This also enables associates and support leaders to better understand each customer based on the fact that their full range of interactions that can be used to deliver more personalized and relevant experiences. 

Over the next six months, 30 percent of Mexico’s telecom customers may be switching providers, and experts predict that in 2015, 50 million customers may also switch. It’s imperative for telecom companies to respond quickly to these market pressures.

In Mexico’s deregulated telecommunications market, price and product will no longer be the differentiator in how companies win customers’ business. Customer experience will win out as the critical lever to gain market share and profitability. 

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