A New Era for the Broadband Industry: 3 Consumer Trends that will Transform the Broadband Marketplace CSG International July 2011

Transcription

1 A New Era for the Broadband Industry: 3 Consumer Trends that will Transform the Broadband Marketplace CSG International July 2011

2 A New Era for the Industry Never has there been a more exciting and tumultuous time for the broadband industry. Consumers can t get enough of high-speed data, voice, and the ever growing inventory of video content available in the marketplace today. Dramatic shifts in the way consumers use voice, video and data services are creating new opportunities for growth. In response, cable operators are launching (or preparing to launch) a myriad of services everything from WiMAX wireless data plans to TV Everywhere leveraging their broadband networks. But at every turn, competitors threaten to erode market share by luring subscribers away with new wireless quadplay offers; Over-the-Top (OTT) content and various other non-traditional service offerings. In light of these shifts, broadband operators are asking themselves some very important questions, including: What new services will continue to add value to subscribers and increase revenue? How do we attract and support new customers who may prefer a la carte purchases or prepaid options over traditional models? How do we deliver a flawless customer experience where services are delivered at the network edge and in the cloud and customer interactions are, too? How does the bundle evolve to differentiate our offering from Over the-top (OTT) content providers? What new enterprise applications will we need to support real-time services? Many factors will usher in a new era for broadband providers in North America. Let s explore how three primary consumer patterns will rapidly transform the way in which the broadband industry offers new services and supports customers and what key applications operators will need within the enterprise to succeed. Consumer Trend #1: Increased Bandwidth Consumption Will Trigger an Evolution to More Sophisticated Offers We are fervent fans of on-the-go; love to participate in social networks via mobile phone; and we want the option of starting a movie at home on the television and finishing it at the airport on our PC. These emerging consumer behaviors brought about by the influx of smartphones, tablet PCs and network based game consoles to name a few have forced network operators to squarely focus on meeting consumer bandwidth and service needs, while also trying to monetize these services. Based on growth projections for bandwidth usage in the United States, operators have a significant opportunity and challenge ahead. Cisco Systems recently estimated that the average user in the U.S. currently consumes about 12GB of bandwidth per month (equal to about DVDs). Cisco expects bandwidth usage to rise over the next few years to 15 Terabits per month the equivalent of 3,750 DVD s per user, per month. This continued increase in bandwidth consumption, coupled with every device being connected, eventually leads to a world where all networks converge over a single IP service delivery system and that shift will dramatically impact how services are ordered, delivered, and billed across all providers, including broadband. In this new era, one-size-fits-all service offerings will be a thing of the past. Consumers will come to expect plans tailored to their specific usage and preferences and pay accordingly. As a result, broadband operators will need to create a whole host of new tiered bandwidth, high speed data and content offerings to accommodate a wide variance in customer usage patterns and preferences. Imagine a world where consumers can split off a portion of their home data usage bundle to their air card. Or subscribers can pay for as little or as much bandwidth as they need or use. 2 P a g e W CSG Systems International, Inc. Confidential and Proprietary

3 In other words, how does an operator support the complexities of enterprise customer needs that want to move to a Cloud model while maintaining a competitive offering to support emerging needs with residential consumers that want video portability? Providers must be able to support new and more complicated ways of packaging, promoting and rating their services in order to deliver ARPU based on usage, bandwidth speeds and quality of service. This will require applications that can monitor, rate and charge for usage and support the consumer all in real-time. Real-time charging and policy management capabilities will play a key role in supporting operators in this new era by monitoring usage as it occurs, and triggering certain actions based on that usage. The differentiator will be how these get packaged and promoted to the end user. Further tying these to the real-time network events that take place will allow active communication to occur and support use cases like event-based promotions and new packages tied to specific usage patterns. Consumers are ready for these services do providers have the right tools to support them? Consumer Trend #2: The Proliferation of Mobile Devices Will Require a Focus on Seamless Delivery and Service Today s consumer expects a seamless experience across all of their technology devices whether they use a PC, TV, or stream content through their Xbox, smartphone or ipad. Industry trends illustrate how the growth of multi-device usage will continue to put pressure on operators to deliver a seamless experience as more consumers go mobile with their content and data plans. According to research group InStat, more than 53 million US broadband households currently view TV programs over the Internet. About 85% of these users already view online TV content on multiple devices including personal computers, TVs and mobile handsets. InStat predicts that by 2014, there will be more than 200 types of web-enabled wire line consumer electronic devices in use in the United States. When PCs and mobile devices are added in, the firm predicts that the average US consumer will own between 5-10 web-enabled devices to choose from for viewing Internet-based digital content. The expectations among consumers won t end with a seamless delivery of content and data across their multiple devices. Subscribers also will naturally expect to converge services across multiple devices as well. What better way for broadband operators to build customer loyalty than by allowing subscribers to: Use a portion of their monthly data plan on their mobile data card Offer prepaid wireless data services to complement their existing subscription Upsell consumers to tiered plans that better suit their usage and preferences Broadband operators clearly have an opportunity to upsell customers with additional services as add-ons to their existing bundle as usage across multiple mobile and broadband technologies continue to rise. The blend of prepaid and postpaid services creates a wide range of new opportunities not widely available in the U.S. market today. For example, a subscriber of wireless data services may wish to apply his daytime usage to an enterprise account, but switch to his prepaid account for personal consumption. Alternatively, a postpaid cable customer might wish to establish a prepaid balance for their kids to watch online video content or movies on-demand. That same postpaid cable customer might wish to leverage a prepaid wireless data card while travelling with his family. The main 3 P a g e W CSG Systems International, Inc. Confidential and Proprietary

4 difference here is that the prepaid balance is not tied with the monthly recurring nature of the subscription account and allows greater flexibility when tied with various service offerings. As consumers increasingly expect seamless service delivery across all of their devices, they will also expect seamless quality of service and customer support. In addition to deploying more sophisticated rating, charging and policy management technologies to support hybrid usage across multiple devices, operators also will need to support completely new forms of payment types, including prepaid. Regardless of customer type whether it be a family plan post-pay consumer or an enterprise customer real time service controls will need to be both individual and service specific. Consumer Trend #3: Consumers Want Personalized Packages and Service Gone are the days of a few packaged choices for broadband consumers. The name of the game is personalization. Customers want to pick and choose their services, bandwidth speeds, quality of service, and even how they all get delivered to their connected devices. Industry trends are forcing a new reality for cable providers: consumers favor power and choice over simplistic, unlimited plans and packages. In their current form, these plans may not be good for the operators bottom lines, either. Future growth will come from increased revenues through value-added services and building customer loyalty by giving subscribers what they want, when they want it. The industry already is seeing the introduction of tiered data plans based on bandwidth speeds, for example, as well as a la carte pricing and other innovative offerings that help combat the growing list of OTT providers. As operators develop more sophisticated plans, the next natural step is to effectively target and market those offerings to the right customer at the right time. As a result, these plans will need to further evolve to better serve the customer on a one-to-one level. Comprehensive product catalog and offer management solutions will be a critical component to directly delivering offers to the customer s end device and helping marketers more precisely identify which tiered service is best for which customer, and to upsell customers appropriately. With highly configurable product catalog and offer management systems in place, consumers might be interested in 40, 50 or even 100 new service offers a year, not counting the potentially hundreds of pricing plan options that could come out as part of other promotions and offerings. Cable providers are further empowered to deliver a more personalized approach to their customers to bolster loyalty and market share by extending affinity plans and delivering volume discounts and cross-product promotions, such as free Pay-per-view movie downloads. A key component to managing, packaging, and presenting personalized offerings to the customer is product catalog and offer management tools that are fully integrated with real-time network based systems and existing billing and customer care applications. Further tying these applications to real-time network events that take place will allow upselling to occur at the time of usage. The ability for an operator to understand what is happening with a customer in real-time, will enable the delivery of a better experience and more precise upsell opportunities. Operators can take this approach one step further by deploying a customer interaction management strategy that also personalizes and automates proactive communication with each customer as real-time events take place. 4 P a g e W CSG Systems International, Inc. Confidential and Proprietary

5 The Future of the Broadband Industry is Here Is the Industry Ready? No doubt, the broadband industry is poised for staggering growth and new revenue opportunities. The convergence of networks, devices, and consumers make the need for new applications to support these marketplace trends imperative for broadband operators to compete and win. A real-time rating, charging and policy management framework is a critical step towards the ability to launch these services. Equally important is the ability to support convergent billing models across all customer types, and the need for robust product catalog and offer management tools to enable dynamic pricing and bundling. The debut of real-time services and the changes that are coming with the personalized services and delivery that consumers expect will change the way in which broadband providers interact with their customers. About CSG International CSG Systems International, Inc. (NASDAQ: CSGS) is a market-leading business support solutions and services company serving the majority of the top 100 global communications service providers, including leaders in fixed, mobile and next-generation networks such as AT&T, Comcast, DISH Network, France Telecom, MasterCard, Orange, T-Mobile, Telefonica, Time Warner Cable, Vodafone, Vivo and Verizon. With over 25 years of experience and expertise in voice, video, data and content services, CSG International offers a broad portfolio of licensed and Software-as-a-Service (SaaS)-based products and solutions that help clients compete more effectively, improve business operations and deliver a more impactful customer experience across a variety of touch points. For more information, visit our website at Infrastructure investments needn t be extensive, and implementations needn t be time-consuming or disruptive in order for broadband providers to initiate this next generation of services. To be sure, the debut of real-time services and the changes that are coming with the personalized services and delivery that consumers expect will change the way in which broadband providers interact with their customers. But with change comes significant reward, and the opportunity to take part in an exciting new era in the industry. 5 P a g e W CSG Systems International, Inc. Confidential and Proprietary