Not only is it demonstrating how seriously a problem like this can damage an operator’s business, it is also making it painfully clear how important it is for an operator to be proactive and communicate effectively with all of its customers in a situation like this. Although O2’s attempt to use Twitter and its website to provide updates on the problem went some way to keeping customers informed, it was not proactive enough to avoid giving customers a poor perception of its service.
To make matters worse, the outage does not only affect O2’s customers, it also has an impact on other people that use services that rely on O2’s connectivity, such as Transport for London’s cycle-hire scheme. So the impact goes far beyond the 24 million O2 subscriptions.
Providing a reliable network is not only an operator’s core business, it is a key differentiator in the UK’s highly competitive market so an outage could cause significant damage to an operator’s reputation. However, telecoms is a complex and dynamic business and O2 has not been the first operator to face challenges in the UK: Orange also had issues with its 3G network in March this year. Of course, operators need to make the right investment to try and avoid any service availability problem, but, if it does happen, transparency and honesty with customers can make all the difference. Although O2 was responsive on Twitter and included updates of the status of the solution to the problem on its homepage, it was not enough to deal with the bad experiences and frustration its customers were experiencing.
This outage could be also a further embarrassment to O2 as the Olympic Games take place in London later this month, and it raises questions about how the operator will cope with the strain that the influx of tourists will put on its mobile network.
Although O2 has dealt better with this problem than other operators in previous cases, it should still be far more proactive in engaging with its customers when problems happen – it should communicate with the customers as soon as a problem occurs, essentially before the customer experiences the problem.
In the long term, however, the outage will have a less of an impact as consumers will always have a financial and psychological resistance to changing their current provider. Furthermore, there is a lack of options and alternatives in the UK’s mobile market as consumers do not see a significant difference in terms of service quality between the operators.
Informa Telecoms & Media conducted a survey in May this year with smartphone users in the UK, and 77% of the respondents stated that a lack of network coverage would be a reason to change their current operator. It was the third-highest reason, after “best value for money” (92%) and “attracted by a better service plan” (88%). However, 47% of the respondents had been with the same provider for more than four years. Although a long relationship could be a sign of loyalty, the main reasons for customers staying for such a long time is more likely to be the lack of any alternatives that are significantly different.