Customer Migration in Switch Decommissioning Projects
TDM switch migration projects have in the past relied on switch grooming activities: “like-for-like”, TDM-to-TDM migrations that allow low utilization switches to be collapsed and some of the cost savings to be realized. The positive side of this strategy has been its transparent nature to end customers. Circuits get migrated overnight to new switches with no need for new customer equipment or any customer discussions to be held around switching to IP-based services.
However, the downside of this tactic is that TDM revenue continues to decline after the migration (approx. -5% YoY) and eventually the majority of business customers will upgrade to IP-based services, often to competitors who might have approached them in the meantime. Customers that remain on the switch will gradually become more and more unprofitable.
Given the financial trends mentioned above, more and more operators are migrating their customers to IP networks and then decommissioning their legacy TDM networks. This more strategic choice involves TDM-to-IP migrations where operators need to have client-facing communications with their customers informing them that their TDM services are being discontinued and offering them a menu of modern IP-based UC&C services options.
Although most operators realize that this is the correct approach, there is concern that this more complex path could lead to migration churn and revenue loss. Cartesian’s experience has shown that a thoughtful pre-migration preparation combined with proper and timely execution can significantly mitigate this risk and also allow operators to leverage this communication to unlock immediate or near-future upsell opportunities. This can result in stabilization of previously declining TDM revenue and offer an avenue for future growth combined with low churn.
Cartesian’s customer pre-migration activations can be split into three basic stages:
- Data Reconciliation: Allows for reconciliation of billing with network inventory data and development of cleansed, reconciled customer and circuit migration lists. The result is an accurate list of services by customer by switch.
- Product Rationalization: Provides a legacy-to-catch product migration matrix where TDM services are mapped to their IP-based service equivalents. In some cases, emulated TDM circuits can be used as an interim step for specific cases.
- Customer Communication Planning: Allows for preparation of customized customer migration and communication plans taking into consideration end-to-end customer relationship, customer revenue, number of locations, contract duration & terms, and account history.
Customer migration plans need to be carefully designed. They must consider revenue at risk and the difficulty to migrate customers to allow both for customized communication and also prioritization of customers during migration (see figure below).
Careful preparation as outlined above allows account representatives to be prepared to:
- Offer the appropriate catch products, explain thoroughly their benefits and create an urge around migration to IP-based products.
- Notify customers well in advance through a series of carefully crafted communication messages, allowing ample time for customer preparation, planning, and discussions of the available options.
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