The simmering battle between US cable and telecom providers is about to erupt into a full-scale war. The objective of both sides is to secure as many triple-play customers as possible.
Customers taking multiple services are far less likely to churn than customers taking just one product so offering multiple services can have the double effect of retaining customers and increasing the average revenue per user.
Marketing the Cable Triple-Play
Because they have greater bandwidth than their competitors, cable companies have been able to offer video-on-demand (VOD). While telecom operators are catching up, it will be some years before they can truly match the cable triple-play across their entire network. Cable operators need to highlight this service and complement it with advanced services such as high-definition VOD and digital video recorder (DVR) functions.
There are plenty of consumers ready to switch to IPTV from cable or satellite TV if the service is comparable, according to a Redback Networks-sponsored survey by Zogby International. Cable operators need to ensure the services offerings are not comparable by staying ahead of the competition.
Marketing the Telecom Triple-Play
Mobile voice and data are the competitive advantage for telecom operators. The quad-play of voice, video, Internet and mobile is unique to telcos and may be attractive to premium customers.
Telecom operators also need to recognize that consumers may want broadband without a fixed-voice service, (or a broadband/mobile-only bundle), so need to be prepared to offer ‘naked DSL," meaning DSL without having to pay for a phone line first.
DSL without line-rental is another reason for the telecom operators to market their own VoIP service, so consumers can bundle different voice options depending on their needs and budget. AT&T has already recognized this and has had good take-up of its mobile/broadband bundles.
Telcos' TV offerings need to be better than comparable cable TV services if customers are to pay a premium. While early adopters will be attracted to move away from their cable companies, the competition for the mass-market will be a harder sell, particularly if the economy slows.
Marketing a Single Service
DirectTV and Vonage are two single-play providers, one TV and one voice, that are holding their own in the increasingly turbulent environment.
DirecTV's strengths lie in providing premium TV services such as high-definition content, DVR services and sports programming at a value price point. It also identified that two-thirds of its revenue comes from one-third of its customers.
These customers are more likely to be male and index higher in the categories of income, education and home ownership. With this information, DirecTV is able to precisely market its products to these ‘premium’ customers and take advantage of the weaknesses of their competitors who try to be all things to all people.
While Vonage VoIP is a value product it still needs to offer a better digital voice service than its cable or telecom competitors for consumers to be induced to switch. This means simplicity, added functionality and the highest quality of service standards.
At the same time, Vonage can target small businesses with a higher-margin product.
Single-play providers may also reap the benefits of a slowing economy as consumers watch their pennies and balk at one large bill from one provider.
Marketers in the battle between cable and telecommunications companies will play a crucial role in the battle for "hearts and minds."
Courtesy of http://www.emarketer.com