In a recent post my colleague Bjorn de Hoorn provided an interesting example of how mobile chat enhances the service experience for your customers. The introduction of higher mobile internet rates recently made me think about the challenges that companies still face in providing customer service via mobile applications.

The rise and rise of mobile internet

The development of mobile apps for chat such as WhatsApp for iPhone and Ping for Blackberry dramatically increased the use of mobile internet. This created the perfect business case for developing mobile service applications: customers have already embraced the platform, it increases the value of the service and it lowers the volume of calls to expensive helpdesks.

The main paradox is that until recently telecom providers considered mobile internet as the necessary evil: a low-margin and costly service, which only cannibalizes profit from standard cell subscriptions.  Customers replaced texting and calling with apps such as Whatsapp and Skype allowing them to chat for free using 3G and wifi. Until recently all mobile subscriptions included unlimited mobile internet for a set fee, so the bulk of the profit for telecoms was coming from calls and texts made beyond the so called subscription “bundles”, which are highly overprized compared to those made within the “bundle”.

However, this is about to change with the introduction of the new mobile internet subscriptions, in which customers pay by MB. In the Netherlands, telecoms realized that mobile data usage is cannibalizing the profitability of call-and text subscriptions, so they changed their business model. From this September Dutch telecoms offer mobile internet subscriptions with a limited number of MB, after which customers are charged 10 cents for each additional MB beyond this limit. Subscriptions for unlimited mobile internet are available, but at a higher price.

Can applications for mobile customer service survive?

The main trouble with this is that instead of promoting mobile internet use and the development of mobile service applications, telecoms inevitably make it an expensive option for subscribers with limited budgets (20-30 euro per month). Subsequently, as the majority of your customers will limit their mobile internet use, the opportunity to serve them with a mobile chat app also becomes smaller. At the end of the day, a cost-effective and efficient channel such as mobile is put at risk, and so is the business case for developing and improving mobile  customer service applications. The paradox is that you want to be where you customers are, but in the end, if 80% of smart phone owners are worried about overriding their data limit, who are you going to serve with a mobile service app? If not widely available for the masses, these apps could become premium service channels for customers with unlimited mobile internet subscriptions of 45+ euros per month.

I am curious to see how the higher mobile internet rates will affect the adoption of mobile customer service apps such as the Proactive Chat. What do you think will happen?