BCG - The Boston Consulting Group

Situation

A large mobile phone operator in China was having difficulty growing its international roaming, direct dial, and data services. Revenues from these international services were only three percent of overall revenue, and international benchmarking indicated that for best practice players in Europe the figure was greater than ten percent. BCG was asked to help this client grow its revenues to mirror those of the European companies.

Approach

The BCG team looked at market sizing and competitor benchmarking, and found no sign that the client was lagging behind its competitors in China. Initial investigations failed to uncover other irregularities. The client had good network coverage; its prices were within the norm; and there were few customer complaints around service. Despite a large customer base, the company had few international service subscribers, suggesting poor awareness. However, the company had good marketing programs in place and sufficient points of sale. Ultimately, we found that the problem had to do with the client’s policies. Although customers knew of the service and could sign up at any number of places, doing so was both troublesome and burdensome. Customer interviews showed that this “hassle factor,” including the requirement of a large cash deposit, was the main reason they had not signed up. Having identified the root cause, we undertook a detailed cost/benefit analysis of requirements for international service subscriptions. We helped the client ease its policies—the majority of which we found (from both a practical and an economic viewpoint) unnecessary.

Impact and value created

In addition to helping the client identify why its international subscription services were selling poorly, BCG developed a number of initiatives—including an e-channel—that made it quicker and easier for customers to subscribe. As a result, the client saw a surge in international service subscriptions, and subsequently experienced a dramatic rise in revenue growth from this business.

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