Every mobile provider needs contact center support – either provided internally, or from a third-party provider. As Latin America’s appetite for mobile services increases, so does the pressure on incumbent and emerging mobile players to deliver the best service possible.
“We are definitely seeing more demand,” says Ricardo Duran, founder and president of Outsourcing S.A., a contact center provider in Bogotá , Colombia. “Coming in to 4G we will see more coverage in Colombia, and with that we expect contact center demand to rise.”
The reasons are simple enough. 4G, also called LTE for “Long Term Evolution,” is data intensive and will result in higher-value customers driving more media across their mobile devices. This in turn should lead to more support requirements for technical issues as well as billing queries for enhanced data plans.
“In Colombia, we will also see smaller operators like Virgin and Uff Móvil moving into the market, though 4G will be dominated by the big players,” says Duran. “The government is getting involved, too, and mandating service levels, which means the telcos will be upping their investments in support services.”
This is not only happening in Colombia. Throughout Latin America, governments are making sure mobile companies are fulfilling obligations for spectrum coverage and quality of service. And, as in any market, these issues quickly translate into queries to call centers.
“The quality of mobile communication service is an issue across the world, and Latin America is no exception,” says Guillermo Hurtado, a research analyst with Pyramid Research in Boston, MA. “In markets such as Colombia, Peru and Brazil, regulators have established quality metrics, and will continue to challenge the operators to improve their service levels.”
As 4G rolls out, and as newer small players enter markets in the region, fresh customers will come on board. This is because there are still rural areas in Latin America where coverage is poor and where additional users can be found.
“In Colombia, for example, the government is insisting that coverage increase to rural areas,” says Duran. “With new coverage comes new customers – and they will all need call center support.”
The 4G Difference
The growth in call center support for mobile providers in Latin America is also about value. New customers in rural regions will likely fulfil lower value contact center needs, and be easily handled. With 4G/LTE, however, the customers will be urban data hogs; top-level contact center support will be a must to retain these valued consumers.
“Initially mobile operators will focus on deploying LTE infrastructure where the return on investment is likely to be the highest, that is, densely populated areas within major cities,” says Hurtado from Pyramid. “Operators will initially target high-value, affluent subscribers that can afford high-tier data plans and high-end smartphones/tablets.”
Consequently, Hurtado expects the LTE segment to become more competitive than current 2G and 3G segments, at least in the first few years, because there will be fewer customers.
“We estimate there will be 1.9m LTE subscriptions in Latin America before the end of the year 2013,” he says. “As more 4G auctions take place in the coming years (Brazil, Chile and Peru have all announced new 4G spectrum auctions), LTE adoption will take off in the region.”
There should be ample time for contact center providers in Latin America to position themselves. With regard to 4G/LTE, Latin America is still lagging behind developed regions and even other developing regions, with several operators seeking to maximize the potential of their recently deployed 3G infrastructure.
“We expect strong momentum to hit in 2015,” says Hurtado. “Brazil will drive the momentum of LTE in the region due to its size and aggressive LTE coverage requirements, which will be met by mobile operators before the World Cup kick-off in 2014.”
Regulators Help Drive Growth
From a regulatory perspective, Brazil is taking the lead. The Latin American giant has PROCON, a powerful government agency that protects consumer rights. PROCON has proven itself to be highly proactive in ensuring that mobile customers get the services they pay for.
“PROCON will fine companies who are not delivering the service they promise,” says Ignacio Perrone, Senior Consultant, Frost & Sullivan, in Buenos Aires, Argentina. “These regulations are pushing telecom players to provide better services; they won’t invest in that unless they have to.”
That’s good news for contact center providers because it forces mobile companies to drive more resources into customer support – not always top of mind for a telco.
“Depending on the market, we estimate up to 45% of demand for outsourcing providers can be from the telecom segment,” says Juan Manuel González, a Research Manager with Frost & Sullivan, also in Buenos Aires. “Still, they need regulatory pressure to deliver better service.”
Given that a higher value customer, combined with regulatory pressure, will likely result in operators investing more in contact center support, the pressure then falls on contact center providers to up their game. With 4G, more and more demand will be coming from demanding customers who expect the best.
“I can foresee that the calls in contact centers are going to have longer average handling times,” says Duran, adding that those contact centers with expertise in taking more complex calls, such as in Internet support, will be well positioned to benefit from the kinds of challenges that 4G will present.
As a result, in the short term, operators will be providing premium call center support services to high-value consumer and business segments. This might include dedicated portals, and will then be useful as a means to differentiate and generate loyalty.