The global marketplace for broadband services is dynamic and growing
At the end of 2011, approximately 660 million households subscribed to an Internet service, and about 580 million, 32% of all global households, received broadband service. The populous countries in Western Europe have high broadband penetration – but predictably, they are showing signs of slowing growth.
- Germany is Western Europe’s largest broadband market with over 26 million homes subscribing to broadband services.
- France has over 22 million broadband subscribers. The growth of broadband in France can be credited to a greater demand for high-bandwidth applications, the growth of fiber-based services, and governmental actions to promote broadband growth.
- Broadband penetration among U.K. homes was 74% at the end of 2011.
- The global recession and Italy’s lagging economy have had a significant and negative effect on Italy’s telecom sector. By 2011, approximately one-half of Italian homes subscribed to broadband service.
- Broadband penetration in Spain grew to 65% of households by the end of 2011.
In many Western European countries, operators feel the squeeze of market saturation as household penetration rates for broadband approach or exceed 75%. In these markets, where most new additions are at the expense of other broadband providers, operators focus on retention strategies that incorporate benefits beyond mere price reductions.
These providers have initiated bundling to lure and keep customers, focusing on deploying services with an eye towards capturing customers and maximizing the ARPU that broadband services offer.
Trends Impacting Global Broadband Markets
- Saturation & shrinking of DSL services in mature markets
- Impact of PC adoption on broadband growth in emerging markets
- Growth of usage-based business models
- Growth of wireless broadband
- Emergence of cloud-based services
The Shrinking of DSL in Mature Markets
DSLbased services are often the quickest to reach consumers since they rely on copper phone lines that are already installed in many homes. However, the growth of DOCSIS 3.0-based cable services and fiber-based services in mature markets is leading to a rapid transition of power among operators. Incumbents that have held power for years are finding a dwindling DSL subscriber base. This loss of subscribers is forcing many to invest in FTTx services in order to compete with cable operators.
The Critical Importance of PC Adoption
Emerging countries considering technology or broadband growth initiatives should include programs for computer adoption as a facet of their future growth plans in order to quickly move their population forward.
The Platform Effect
There is no disputing recently that Over The Top (OTT) approaches to cloud content and smart devices (connected TVs, mobile phones and tablets) have had a huge influence on the media and payTV industry.
Just as new market entrants scrambled to sign content deals and offered a compelling OTT offering, the payTV market leaders also pushed to deliver their valued content to these new screens. They needed to do this to keep up with the innovation curve and meet consumer desires to leverage their new devices.
Many had predicted the demise of traditional media stalwarts and the set-top box (STB) but the industry enjoyed continued growth. However, it is important to recognize that the OTT experiment is in its infancy and innovative internet services and device companies will continue to evolve and learn from their early missteps. This paper discusses why OTT has yet to succeed with consumers and how their relationship is evolving with this new way of watching TV. It will also examine what PayTV operators can learn through this experience in order to continue to enrich their content, differentiate services and get closer to customers to maintain their lead and fulfil growth plans.
While the critical component lacking in most of the OTT offerings is clearly traditional live TV content, trials such as the Hill Holiday OTT user study ‘An Experiment in Cutting the Cord’ have proven that this is not the most frustrating factor for consumers using OTT.
The common thread across all the tested platforms has been that users were fundamentally uncertain of how to watch TV that was not their familiar linear style network feed. OTT’s new “search only” approach violated the common principals of channels, Electronic Programme Guides (EPGs) and TV networks, which to the PayTV operator’s benefit is the comfort zone of the consumer. Consumers simply do not have the time to be engaged in managing their entertainment ecosystem and making decisions. Users consistently commented that they prefer a “lean back and forget” experience where users appreciate the network’s next show. Simply put, they did not know what to watch next.
This presents an interesting challenge to PayTV operators who themselves are starting to offer more cloud-based DVR and web content and Video on Demand (VoD) libraries that may complicate the linear experience. However, it’s also a huge opportunity to take what is known about the consumer’s personal choices, viewing habits and social media interactions (on an opt-in basis) to take the linear experience to a completely new level. It’s an opportunity to create the first “personal linear network” that is customised for each user, blending the best traditional PayTV content with other smart content offering opportunities.
When next generation IP services first debuted years ago they unleashed tremendous excitement – right up to the point where cable service providers and other service providers had to figure out how to bill for them. At the time, because legacy systems weren’t built to handle connectionless services, providers were forced to bill for IP services at flat rates.
Today, following the development of the Internet Protocol Detail Record (IPDR) standard and its incorporation into DOCSIS, the door has opened to usage-based billing for next generation services. In large part, the rapid advance toward IP profits has been led by the evolution of mediation systems with the capability to leverage the IPDR standard and retrieve data from large IP environments. In this new world, mediation is the strategic enabler for data integration between the network and OSS/BSS systems – and the tap that can open the floodgates on IP service profitability.
However, not all mediation systems are the same. Many in the industry believe that mediation does not always live up to the expectations set by the framers of IPDR. Too often, for example, the job of mediation for IPDR is parsed between different software solutions. Other times, a cable service provider may find itself managing multiple mediation solutions for IP and traditional services. Both scenarios lead to needless complexity, greater inefficiency, higher operating costs and lost profit opportunities. Cable service providers need a standard means of gathering data tied to consumer and commercial bandwidth consumption to support new Internet billing models and to eventually monetize their networks based on type and amount of traffic carried. They should demand a better approach to IPDR mediation that optimizes their investment in next generation networks and services. The hallmarks of such a solution
- Scalability to handle a greater volume of records as data grows exponentially.
- Flexibility to support billing and all other BSS functions, and to integrate with other vital disciplines such as business intelligence/predictive analytics, operations management and marketing.
- Real-time actionable intelligence providing the ability to see into the network, optimize bandwidth management, and monetize every opportunity to drive new revenue streams from convergent IP services.
How Convergys and DigitalRoute are helping cable service providers to manage and monetize bandwidth
Cable service providers need a more advanced approach to BSS that improves bandwidth management and monetization. Together with partners DigitalRoute, Convergys is intensely focused on helping cable service providers leverage advanced BSS to meet these core business objectives and pursue new revenue opportunities.
Jan Karlsson, CEO at DigitalRoute, comments on the rapidly expanding uses for mediation:
“In addition to its familiar role of integrating data across multiple platforms to ensure timely, accurate billing, mediation plays an important part in ensuring efficient bandwidth management. Convergys Active Mediation powered by DigitalRoute, for example, keeps track of bandwidth and how it is used in a specific time period, essentially connecting bandwidth with a specific product and determining the financial value contributed.”
Cable customers for life: The smart approach to winning loyalty
In today’s race to win customers, cable companies are trapped in a contest where conventional approaches to resolving churn only put them farther behind the pack. What if it were possible to pull ahead of the competition and stay ahead, building an insurmountable lead in customer loyalty that leaves competitors in the dust?
The shift in how today’s cable market leaders treat customers is marked by a combination of personalization and service – a familiar goal much like the intimacy gained in a door-to-door salesperson’s face-to-face meeting with a customer. But there all similarity ends.
Now the “handshake” that seals the success of customer interactions is largely technology-based. Instead of ‘on the world’s doorsteps’, today’s competitive gateway is the intelligent backoffice, a sophisticated IT infrastructure that masterminds the realtime integration of billing data, business intelligence, predictive analytics and CRM to create an in-the-moment portrait of the customer: a concise view of his or her buying power, history, usage, personal preferences and likelihood to move up the value chain with future purchases.
This infrastructure, commonly called “Smart BSS,” empowers cable companies to “know” each customer and deliver a uniquely satisfying experience based on detailed insights into what has passed in the customer’s relationship with the cable company, and what will most likely come. Even more remarkably, because such systems deliver unprecedented scalability, they can perform the same miracle of intimacy across millions of customers and billions of transactions, responding to service needs proactively – even before the customer is aware of an issue – or creating customized service packages loaded with subtle feature variations defined by an individual’s known likes.
Delivering on the Promise of an Any Screen World
A variety of trends are driving service providers to consider advanced content delivery architectures that promise to ease the challenges of reaching new devices, improve system scalability, lower operational costs, and speed the launch of innovative services. The goal is to become more competitive in the video services marketplace; a market which is highly dynamic and features a host of emerging competitors. The consumer driven and technology trends that entice companies to enter the video services market also present opportunities for traditional service providers to increase their revenues and expand their subscriber base.
These trends include:
An Explosion in the Number of Video Capable Devices
Worldwide shipments of internet connected consumer electronics devices, a category including connected TV, video game consoles, Blu-ray players, and IP set-top boxes, will surge to 503.6 million units in 2013, up from 161 million in 2010. With projected shipments of tablet computers reaching 66.9 million units in 2011, an increase of more than 260 percent from the prior year, an unprecedented number of people now can access video services on-the-go. This enables consumers to extend the amount of time they spend watching video programming and provides operators with the opportunity to promote new revenue generating services to consumers.
The Demand for and Availability of Growing VOD Content
With revenue from DVD sales sliding approximately 40 percent from its peak and box office figures down 20 percent in 2011, content studios are looking at alternate ways to boost revenue. Studios have begun to release more content to VOD service providers to off-set declining revenues in other parts of their business. In addition, the success of services like Netflix and Amazon demonstrate that consumers will pay for increased content variety, generating interest in archived content libraries. In sum, storage expansion represents a challenge that will stress legacy VOD server architectures and present opportunities for tiered storage and content delivery networks.
Starting from the year 2005 Comarch has been delivering software for Field Service Optimization. For a few years now, Cable and Satellite service providers, after their transformation in BSS, are looking more carefully at Field Service trying to improve their performance and build customer experience strategy that involves field staff. Outsourcing field operations allows to make savings in that area but costs are still a problem and quality would need much improvement. Cable operators, while implementing a new strategy for their field force, must consider several aspects of their business and the available technology opportunities.
Is Cable FS unique?
Generally, Cable field services are organized in the same way as many other service providers. Significant differences may be found in details. But those detailed differences should be addressed to preparing proper solution supporting dispatchers and techs in their daily tasks. Below are presented important aspects in building a service strategy for Cable operators:
- Outsourced resources – Installations are executed mainly by fulfillment partners. This means that warranty and agreement execution rules have to be applied
- Signal level – Measurement is the first element of an on-site visit, it determines what is possible on the customer’s site
- Provisioning – pre-activated equipment doesn’t work in real life. After installation the equipment has to be activated before the order is completed
- Damage Claims – one of the most popular registered customer support tickets – better to have tools to deal with this kind of issues
- Service Quality- carrying out audits of outsourced companies or executed work orders is one of the ways of keeping it on the right level
- Spare Parts – The first reason for why work orders are not in accordance to SLA parameters
- Customer Appointments – an element in building a competitive advantage of a Cable service company on a demanding market
Who is right – automate, technician or dispatcher
In the process of implementing field service automation tools, especially when optimization is applied, specific cooperation between techs, dispatchers and automation tool has to be worked out. An optimization tool has to be tuned during the first stage of deployment. But, to do this properly, dispatchers and managers have to wait for the first result of automation usage. It depends on what goals are set in the system, but normally about after 2 weeks of using the automation tool it is required to change the old schemes in the company and see the first results. After that all dispatcher complaints have to be considered in order to tune the system. The same applies to techs. In the pilot stage they have to be very patient and try to apply new process of order fulfillment without trying to improve it on their own. There will be time for that in the next iteration of the system’s configuration. An optimal process of field service delivery and supporting tools is shown below. This process may be automated in some stages – optimization goals are the domain of strategy building and tuning during the pilot stage.
Sustainability and cost cutting goals
Just after customer satisfaction – the main reason why to implement a FFO solution is achieving goals related to savings in the field services area. Savings in mileage or vehicle utilization is also consistent with sustainability goals in the MSO strategy.
Packet Optical Networking
The core of the network is the workhorse that must handle the enormous amounts of data that are consumed by video, cloud computing and other popular bandwidth-intensive Web 2.0 applications. Yet, most core networks are still too inefficient and limited in bandwidth. Network operators need to rapidly adapt and increase network capacity. They also need to reduce their cost of deploying, operating and scaling optical core networks in order to keep margins strong. With the demand to shorten time-to-revenue and reduce operational expenses, increased network flexibility and lower operational complexity have become important areas of focus for cable operators. Next-generation architectures need to be defined which can cope with these challenges.
A new crucial milestone in optical networking has been reached with the evolution of Dense Wavelength Division Multiplexing (DWDM) technology to support a more flexible and dynamic agile optical core network infrastructure. DWDM networks are now evolving from a virtual fiber infrastructure into a true service provisioning solution.
The speed of data transported over a single wavelength has reached 100Gbit/s and will further scale. At the same time, new modulation schemes provide enhanced optical performance and reach. In combination with a new generation of optical components and devices, this technology simplifies network planning and therefore increases operational efficiency.
Next-generation Reconfigurable Add/Drop Multiplexer (ROADM) technology offers more dynamic and flexible options in operating optical networks. With this technology, new services can be provisioned without performing complex network engineering tasks. The additional integration of OTN and packet switching functionality has seen DWDM technology finally evolve into an intelligent and agile transport solution. The integration of packet-based forwarding and Ethernet service capabilities in particular contribute to the agility of optical transport technology, making multi-layer packet optical technology the ideal choice for innovative network infrastructures.
Figure 1 Multi-layer network architecture
Control Plane for Optical Transport Networks
An intelligent control plane starts to play an important role with the evolution of optical networks to a more flexible and dynamic multilayer service provisioning solution. A control plane offers a number of benefits. Control plane enabled agile optical networks support new, dynamic services including bandwidth-on-demand applications and customer-initiated service requests. The control plane also improves network efficiency and resiliency when applied for dynamic service restoration. Finally, the control plane helps to reduce operating expenses by simplifying service turn-up and network maintenance.