Telefónica taps Nokia for customer-focused shake up – ousting Ericsson?

Nokia has racked up another win for its operator-focused software and services portfolio, with Telefónica choosing it to provide the evolved Service Operation Center (eSOC) platform to Telefónica UK. The goal is to proactively monitor and enhance individual customer experiences, in as close to real time as possible, so that Telefónica can better serve its customers.

But most importantly, Nokia is providing the tools that should keep Telefonica’s network up and running. This is quite prescient, as Telefonica’s UK brand, O2, suffered a rather embarrassing network outage in December, which was later found to be the cause of an expired certificate. To this end, and we have not been able to confirm this yet, it looks like Telefónica has shown Ericsson the door and gone with its chief rival.

Telefónica says that it needs eSOC in order to differentiate itself in highly competitive mobile markets, such as the UK. Nokia, meanwhile, is looking to grow its software and service offerings, due to the increased competition it faces in its core mobile infrastructure markets – although Huawei’s recent troubles may alter that operating principle.

The gist of Telefónica’s strategic shift is that it no longer wants to focus primarily on its network performance, and all the metrics that come with it, because its customers could still be having a poor experience on a well-performing network – and Telefónica would not have the metrics to see that its customers are getting annoyed enough to churn away from its services.

Instead, Telefónica wants to essentially monitor how its customers are experiencing the network, so that it can intervene if something is amiss. It’s akin to a bottom-up rather than top-down shift, but one that is only really possible using modern technologies. This sort of monitoring was not really feasible, even just a few years ago.

This is because Telefónica has 32 million customers in the UK, and crunching each individual’s interactions with its network and systems was not something that would have been particularly cost-effective. Telefónica would not have enjoyed a return on the investment.

Juan Manuel Caro, Telefónica’s director of network and IT operations at global CTIO said, “Telefónica has always aimed to offer the best possible experience to our customers which a reactive network monitoring approach to operations could never guarantee. With SOC we have already transformed this in three of our markets reaching the next level in automated customer experience management, granting us flexibility and adaptability that serves as a key differentiator. Nokia’s solutions and services will allow us to achieve this goal in a competitive market like the UK.”

Unsurprisingly, analytics are at the heart of this offering. Nokia argues that its Cognitive Analytics Suite allows its CSP customers to keep up with the vast amount of data they manage, providing a major differentiator. In addition, the Autonomous Customer Care offering is centered around self-care portals and chatbots, which should alleviate some of the workload of customer support staff – with Nokia’s platform automating as many of the customer interactions functions as possible.

The end-goal of this sort of digital transformation is to free up regular workers, removing the burden of tedious or repetitive works, so that they can be better allocated to more important tasks.

For CSPs like Telefónica, its customer support staff could either be shed, to improve margins, or put to work on functions that improve customer happiness. Clearing backlogs of weird support tickets is one such option, but so are things like offering better package deals or upselling where needed – which are especially important as CSPs try to improve ARPU by signing up their customers to more services.

To that end, it’s much harder to make a sale if your customer is harboring resentment at the quality of service they are receiving. If it took them an hour to rectify a billing mistake, they become much more likely to cut contract – and potentially take friends and family with them. Being able to see how a customer has been interacting with the network should allow such upsellers to make better pitches.

The eSOC offering promises to deliver ‘closed-loop automation that enables service providers to quickly detect, diagnose, and recover from service-impacting issues, without human intervention.’ Nokia claims that it proactively detects over 90% of service problems, resulting in 50% fewer service-related complaints. It adds that service is restored 50% quicker, and that it results in 20% fewer site visits – a pretty large cost saving. However, Nokia has just announced that it is cutting 350 jobs in Finland.