New Verticals, New Value Adds and more Fiber are the pillars for market growth.
This is the first in a series highlighting MSOs industry focus and its impact on the Tier2/3 markets. The information is based upon studies from Heavy/Light Reading, SCTE, Deloitte, Garner and other industry sources. This article covers how the MSOs are targeting value add service and new verticals as the first phase to leverage fiber expansions and ward off competitors. The next articles will cover the MSOs’ 10G and 5G backhaul plans. Hopefully you’ll find this valuable for 2020 and beyond.
They say it’s easier to fight the enemy you know than the one you don’t. With uber competition confronting every industry, companies must invest to fight rivals. It is tough, challenging….yet strangely reassuring to take on familiar opponents. However, focusing on traditional rivals has often blinded companies to the threat from new disruptive competitors. Cable’s investments are focused on changing the battle with current competitors and insuring they are positioned from the threat from new adversaries.
New customers – What’s Bright, Shiny & Not GEM?
Government-Education-Medical (GEM), the original commercial vertical sector mantra for the cable industry, has served them very well over the years. Now cable’s segmentation and targeting are evolving with growth opportunities in some unexpected areas. According to MSO business services executives from Tier 1 and Tier 2 markets, Broadband Success Partners captured quantitative and qualitative answers to the new targets. As the chart details GEM still dominates cable industry’s business services efforts, with hospitality emerging as a close fourth. As the executives noted:
“These verticals frequently utilize cloud-based services that require high speed connectivity and reliability, including SLAs.”
Cable’s legacy GEM focus clearly continues to pay dividends. But other verticals are now popping up too.
Which are the newest verticals with promise?
The array of responses shines a bright light on emerging areas where MSOs seem particularly well suited. For example, agribusiness is hot and getting hotter, especially in rural areas where farmers need access to gigabit speeds that enable them to leverage new technologies. “The early returns are extremely positive,” according to one of the executives.
Consider this agribusiness IoT use case: crop yield improvement with industrial tilling equipment that drops one of three different types of seeds based on real-time soil acidity readings.
Keeping with the IoT thread, energy-utilities and manufacturing are newer verticals for cable to provide services for IoT and telemetry devices. Amenity WiFi and capturing data and using analytics to learn more about their customers behavior is increasing bandwidth demand for all retailers.
US cable operators are making progress in their pursuit of lucrative, enterprise-sized services deals, but their bread and butter continues to center on small and mid-sized companies.[ii] Cable is seeing a 5% rate of revenue growth, much of it from Tier2/3 growth meaning there’s still plenty for cable to pursue. Some such as Comcast has seen an 8.8% commercial business services growth.
Getting More out of Current Customers – The Total Connect Affect
How is Cable Planning on driving increased revenue when bandwidth pricing is falling? “Make new friends but keep the old. One is silver, the other is gold.” Just like this lyric, cable operators are changing to mine current accounts while embracing the new verticals. The cablecos are committed to adding more value for the current services to reduce churn, increase usage, attract new accounts stave off new threats. As evidence of this commitment the MSOs have released new portals for client interaction such as Comcast’s Service Portal, Cox EPMR Portal and Spectrum’s Total Connect[iii].
In January of 2020 Spectrum released Spectrum Total Connect consisting of:
- Custom internet solutions designed for each business, including streamlined billing, 24/7 support and project management – all from one provider;
- A variety of internet plans, including Spectrum Business Internet Gig, with speeds up to 940 Mbps;
- Online management tools to help businesses monitor service requests, service levels and more.
Expanding Fiber Investments and Services
As the MSOs are gearing up for a new decade of jousting with telcos and new rivals they are steadily pumping more fiber into their access networks. There remain many questions about how cablecos intend to take advantage of their increased fiber investments.[iv]
The SCTE Heavy Reading Survey identifies the key focus areas for cable’s heavy investment in fiber builds. They believe they can expand their business market share through increasing fiber deployments for 10GigE services and 5G backhaul deployments. In fact 62% of cable companies expect to upgrade their networks within the next 2 years for 5G backhaul (over 60% of respondents were Tier 2/3 market operators). Regional carriers have several steps they can take now to counter this offensive being launched by your legacy competitor as well protecting you from the new disruptors.
What Can Telcos do now?
As the CableCo’s realize investing in a customer service portal can increase sales, improve loyalty, expedite sales and provide valuable customer usage information all the while reduce operating expenses. Portal views to service delivery is a great way to improve your CEM and over deliver on customer expectations. With OcularIP™, adding a portal view to your network is easy to set-up and intuitive for your customers to use.
A recent Forrester report states that over 80% of business customers prefer to access a web portal for their interaction with a business partner. Marketing, billing and trouble ticket portals provide information, but customers aren’t getting the item they value most – how is the service performing now! That’s where OcularIP comes in.
Using OcularIP you can provide real-time customized end-to-end circuit visibility. And with Performance Connect™ API, you can quickly and easily integrate a service level portal into your web strategy, OSS/BSS, EMS, including systems, platforms and applications.
OcularIP Makes It Easy
OcularIP supports receiving circuit information from over 400 different technologies and dozens of various systems. Many OcularIP clients have turned up the software by themselves in minutes. Request a logon, download the OcularIP vCollector app (26mb) enter a key and let OcularIP learn your circuits, that’s it.
OcularIP is in use with 137 carriers worldwide, over 110 in North America. OcularIP in its 5th generation has many additional capabilities. The only thing that outshines OcularIP’s functionality is the support we are committed to provide you. Look around and feel free to contact us for your own trial.
JEFF BAUMGARTNER, Senior Editor, Light Reading, 12/3/2019
[iii] Charter Launches Spectrum Total Connect Jan 13, 2020
[iv] Cable’s Fiber Outlook Survey SCTE Report Heavy Reading November 2019