Telecom companies are failing on customer experience despite consumer trust

By Rob van den Dam

The primary hurdle telecommunications companies face today is their existing customer experience reputation. No telecom companies were cited as leaders on any customer experience scorecards we consulted — and this reputation has affected customer loyalty.

Seeking answers as to why, IBM conducted a survey in 42 countries, accounting for 73 percent of the world population and 90 percent of global GDP. The survey focused on three aspects:

  • Consumer experiences with the basic (network) services.
  • The extent to which telecom companies’ products and customer services created emotional and meaningful connections.
  • Digital trust, reflecting consumers’ willingness to share personal data enabling telecom companies to reshape the customer experience.

It’s all about video

When buying a new mobile device, we hardly think about the “phone” capabilities. It’s all about data — and in reality, data is all about video. The mobile internet is gradually morphing into a video distribution network for both digital entertainment and social media. The definition of the consumer experience is rapidly changing from what we know today.

Telecom providers are adapting to this new phase and experimenting with a spectrum of new services and business models. However, the survey revealed that these companies are not highly valued for video delivery, as compared to cable companies, video platforms like Netflix and social media sites like YouTube.

Consumers increasingly watch video on their mobile devices, but right now, the experience isn’t great. Sixty-six percent of respondents to our survey said they often experience buffering or stalling problems. There are many reasons why these problems happen; the fault could be with the device, the video server or the app. However, according to the survey, customers are more likely to blame the telecom company. Half of the respondents said they would even switch service providers if the quality were bad enough.

Call center interactions are not enjoyable

The customer experience and loyalty section of the survey reflected that telecom companies generally have negative Net Promoter Scores (NPS), to the point where they’re often near the bottom on lists that rank various industries.

For customers, the ideal experience includes prompt and effective responses to queries, outstanding service and fair resolution of complaints. Yet telecom companies are falling far short of that ideal. They generally rate average to good — but that isn’t good enough. They need to excel at the customer experience if they are going to be competitive.

The fine line of trust in customer relationships

Making sense out of personal data has become the new battleground. The ultimate competitive advantage goes to those companies that can extract actionable insight from personal data and create value for consumers. That requires customers to trust the companies that collect and analyze their data. In that regard, telecom companies actually score on the high end. On our list of different business sectors — including retail stores, social media and others — telecom companies and banks are globally the most trusted.


If telecom providers are going to collect consumer data in the digital ecosystem, trust is imperative. Yet the survey indicated that trust has declined in the last three years for most countries, although it has gone up somewhat in most emerging markets such as Indonesia, Thailand, India, China and the Philippines. The biggest concerns consumers expressed about data collection are companies selling data to third parties and failing to keep it secure. Consumers clearly want more control of their data and knowledge of how and where it is used.

Written By

Rob van den Dam

Global Telecommunications Industry Leader, IBM Institute for Business Value (IBV)

Rob van den Dam is the Global Communications Industry Leader at the IBM Institute for Business Value. He leads strategic thought leadership in telecommunications and media & entertainment, developing future agenda's, industry outlooks and business value realization studies. He…