New verticals, new value add, and fiber are the foundations for market growth.
This is the first in a series highlighting multiple-system operator’s (MSOs) industry focus and its impact on the Tier 2/3 markets. The information is based upon studies from Heavy/Light Reading, SCTE, Deloitte, Garner, and various other industry sources. This article covers the verticals and value add services that are the first steps to leverage fiber expansions and build a moat to ward off competitors. The next articles will cover the MSOs 10G plans and 5G backhaul plans. Hopefully you’ll find this valuable for 2021 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 and challenging … yet strangely reassuring to take on familiar opponents. However, focusing on traditional rivals has often blinded companies to threats from new disruptive competitors. So, what happens when your competitor changes to battle not just you but the threat from new adversaries?
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 both Tier 1 and Tier 2 markets, Broadband Success Partners captured both quantitative and qualitative answers to the new targets. As the chart details, GEM still dominates the 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 an agribusiness IoT use case where industrial tilling equipment improve crop yield by dropping one of three different types of seeds based on real-time soil acidity readings.
Cable is also proving IoT and telemetry services to newer verticals such as energy-utilities and manufacturing. All retailers are increasing bandwidth with amenity WiFi, data capture, and analytics that help them learn more about their customer’s behavior.
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 midsized companies. Cable is seeing a 5% rate of revenue growth, much of it from Tier 2/3 growth meaning there’s still plenty for cable to pursue. Some operators, such as Comcast, have seen an 8.8% growth in commercial business services.
The total connect affect: getting more out of current customers
How is cable planning on driving increased revenue when bandwidth price 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, and 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.
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.
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 and protect themselves from the new disruptors.
What can telcos do now?
As the cableco’s realize, investing in a customer service portal can increase and expedite sales, improve loyalty, and provide valuable customer usage information while reduce operating expenses. Portal integration is a great way to improve your CEM and overdeliver on customer expectations. Gain visibility to your client services. OcularIP’s portal capabilities are truly minutes away – they’re 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. Plus, 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 140 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 providing you. Look around and feel free to contact us for your own free trial.
David Strauss, Principal, Broadband Success Partners, 12/30/2019
Jeff Baumgartner, Senior Editor, Light Reading, 12/3/2019
Charter Launches Spectrum Total Connect Jan 13, 2020
Cable’s Fiber Outlook Survey SCTE Report Heavy Reading, November 2019