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The Evolution of the Telecom Bundle: The New Dou

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Post# of 17653
Posted On: 02/28/2014 8:39:33 AM
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Posted By: Hightech

The Evolution of the Telecom Bundle: The New Double Play?


2/27/14 at 11:50 AM by Bernie Arnason
2


broadband


The success of the triple play bundle is undeniable. Combining voice, video, and broadband onto a single ‘pipe’ into the home and on a single bill created great value to consumers and helped drive ARPU growth for service providers. The telco and cable industries have been happily riding the triple play wave for years. For companies who also can offer wireless, the quad play has seen some interest as well. But what’s next for the bundle? Frost and Sullivan offer some insight into the future of the bundle through recently published research findings.


Their “ Consumer Communication Services Preferences: The New Quad Play is a Dual Play ” research suggests that consumers are adapting and will find less value in a triple or quad play, preferring a double play that consists of home and mobile broadband connections only.


“The implications of these results portend a transformation in consumer perceptions,” said Stratecast | Frost & Sullivan Consumer Communication Services Program Manager Mike Jude, Ph.D. in a press release. “Our findings made it very clear that consumption of the services that ride access channels – voice and video – are in decline. It begs the question: does this mean the two access services, broadband and wireless, are increasing in importance to consumers?  The simple answer is yes.”


Dumb Pipes
Frost & Sullivan surveyed 2,035 consumers from North America for this research and their findings reveal that consumers are increasingly seeing value in apps for services that the triple play historically delivered. Specifically, consumers are migrating towards voice and video apps delivered over wireline and mobile broadband, rather than wanting to pay for those services as a part of a bundle. Some might call it the “dumb pipe” effect, where consumers are saying just give me both a quality wireline and mobile broadband connection, and let me tailor my video and voice experience through the apps that I choose.


“The results indicate the market is evolving toward a new dynamic in which services are simply applications delivered via an Internet Protocol (IP)-based connection, whether wired or wireless,” Frost and Sullivan report. “Services, therefore, may one day look more like applications, easily downloadable via an app store.”


Some relevant key findings from this research:



  • Residential consumers rate Internet service the highest in importance, followed by wireless, subscription video, and then voice.

  • Among consumers who dropped landline telephone service, the primary reason was that they had a cell phone. The second most likely reason was that the price was too high.

  • Combined with time spent on social networking (more than four hours a week), Internet usage is now in excess of conventional television viewing for most consumers with a broadband connection.


The Need to Adapt
These research findings hardly predict a ‘doomsday’ view for traditional service providers. For example, survey findings reveal that “…nearly 79 percent of respondents still maintain a landline telephone service.” But research like this does reveal changing habits and preferences for consumers, which will require service providers to adapt. The triple play bundle will not meet consumer preferences forever.


Smart service providers will adapt accordingly. That means recognizing consumer preferences and tailoring service bundles to meet them. It also means not attempting to be everything to everyone. Trying to transform a service provider into an app developer because consumers look to apps for a growing number of traditional services may not be the smartest adaptation strategy.


That doesn’t mean service providers have to sit on the sideline either. It just means recognizing what you do best and partnering with others who can better deliver the app experience for your consumer and business customers. Facilitating the best app experience should be the goal, and if there is a way to build incremental revenue in the process, all the better.


Finally, the Frost and Sullivan research findings point to mobile broadband as the second portion of this emerging double play standard. Wireline-only carriers are at a disadvantage for meeting what Frost and Sullivan’s research says is the second most important service. Or are they? Maybe, maybe not. Wi-Fi and other emerging unlicensed wireless technologies like TV Whitespaces broadband may offer an option for wireline carriers to attempt to meet that demand. They are certainly worth investigation and some ‘trial and error’ experimenting. That’s what adaptation is all about. Finding new and innovative approaches to meet customer demand and thinking in new and different ways to do so. It won’t just fall in your lap or happen by accident.



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