Not too long ago, if we were a Celcom subscriber, we could only send messages via SMS to another Celcom subscriber. SMS reach was only within the same network provider, for example, Maxis to Maxis and Digi to Digi.
Similarly, if we held a Maybank ATM card, we could only transact at a Maybank ATM, or if we were a subscriber to Astro, the contents accessible to us were only those from Astro.
The scenario has changed over time. Later on, subscribers to any telco network were able to send SMS to telephone numbers on different networks. Inter-bank transactions can be done at any ATM with the availability of inter-bank network service gateways such as MEPS and GIRO, while media contents can be delivered directly over the Internet to viewers through OTT (over the top) content providers, such as Netflix and iflix.
What brought about the change? The reason is none other than changing consumer behaviour, from the conventional “one user, one service provider” back in the day to “one user, multiple service providers” today. The ease for consumers to connect and hop between multiple companies becomes possible with ‘interoperability’, which is a key characteristic in meeting consumer preferences for a basket of products that can fulfil their needs seamlessly, effortlessly and quickly.
Interoperability in the telecoms sector, for instance, came about when customers had demanded that they be allowed to send SMS to their families, friends, colleagues and others who are on different networks. The networks then opened up SMS to be interoperable. Later, number portability opened up the ability for users to switch operators without losing their number, which had been a pain point for many years before that. However, for current prepaid users, they can only share airtime and data within their own network.
Interoperability on this issue will open up airtime credit to be traded between mobile network operators, enabling people to transfer airtime to their loved ones who are on a different network. Therefore, in terms of mobile credit, interoperability means that a customer who is on one mobile network can transfer or share airtime credit with another person who is on another mobile network freely, without any restrictions.
Imagine emergency situations, such as floods, where a mother who has depleted her phone credit desperately needs to contact her child for help. With interoperability, the child on a different network can easily transfer credit to his mother. This is also useful if distance is a factor in getting mobile credit, especially in areas where Internet connection is poor. People can easily transfer mobile credit with one another regardless of the network that they are on. If telcos do not attend to this consumer need, it will continue to be a pain point with the consumers. If they come across another option that can cure their ‘pain’, the consumers will definitely say goodbye to service providers that are being insensitive to their exacting needs.
In the case of banking services, consumer demand has a bearing on Bank Negara Malaysia’s recent move to establish the Interoperable Credit Transfer Framework (ICTF). ICTF is a shared payment infrastructure that enables the interoperability of credit transfer services and promotes collaborative competition between banks and non-bank electronic money (e-money) issuers through fair and open access. Credit transfer services are a convenient alternative to cash and cheques with more consumers migrating from conventional payment methods to electronic payment (e-payment) services available on smartphones and various other gadgets.
The pace of digital disruption is even more rapid in the broadcasting industry. It seems only years ago that Astro and Media Prima dominated the local broadcasting industry. In recent years, OTTs such as Facebook and YouTube have become giants with even greater reach than CNN and Fox News, what’s more, the local conventional media houses. They can no longer afford to create content to feed their own egos or to force services onto consumers without taking heed of the increasing consumer purchasing power in making choices and influencing change. OTTs with their online direct streaming media channels disrupt telecommunications, multi-channel and broadcast television platforms that traditionally control or distribute content, making the media houses less relevant. Lest they change and embrace bandwidth and other OTT technologies fast enough, the traditional media may become obsolete.
Financial services can also now be delivered directly to the homes of consumers, making direct banking services through banking premises less preferred than before. Telco services, too, can be offered to customers independent of the telco giants. The time to be ‘egotistical’ in offering services is over. Service companies can no longer afford to operate within their own internal sphere, while not catering to the changing consumer behaviour. If they do, they are only creating their own competitors. Consumer behaviour today dictates a sharing game in business. The operative word is collaborative competition, where interoperability among players creates an almost level playing field for all.
In the future, interoperability will be key, and its extent global. Fast, easy and direct service that caters to the needs of consumers will earn their loyalty, and I would like to equate an inter-service loyalty programme to a “country”. Its loyalty points are its currency. Its subscribers are its citizens. Interoperability allows me, as a “citizen”, to use my “currency” to buy the service of another country. I want to be able to pay using any currency, and convert it to other currencies seamlessly.
With interoperability, consumer behaviour of the future will shift from the current “one user, multiple service providers” to “multiple users, multiple service providers”. The scenario is akin to multiple visitors entering a theme park with multiple facilities. The entrance is the gateway that opens up to a multitude of attractions available at a fee. The fee may even be waived off in the future in order to meet consumer demand.
If companies still ignore the changing trends in consumer behaviour, and are still caught up in their own corporate bureaucracy and tangled in a web of their own egos, they will perish. Today, more than ever, the consumers with their wallets in hand will win. Let’s not underestimate their power.
Datuk Azrin Mohd Noor is the founder of Sedania Group, an innovator, author and IP expert
This article first appeared in Forum, The Edge Malaysia Weekly, on January 28, 2019 - February 03, 2019.