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The Perennial Need for Speed

Iain Morris
9/29/2014
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Connection speed has long been the marketing hook that operators have used when fishing for broadband customers, but is it now due for replacement?

Several speakers at the recent Ultra-Broadband (UBB) Forum in London believe speed will become less important as ultra-fast networks proliferate, forcing operators to tout other capabilities as they fight for business.

Yet this is not happening in a hurry. "There's been a lot of discussion about this move from speed to services and customer experience, but operators are still promoting themselves on the basis of speed," noted Mark Newman, the chief research officer of Ovum's telecoms research business.

That has clearly rubbed off on customers, who largely think of their broadband service as little more than a fast pipe, judging by the results of an Ovum survey of broadband users in 15 countries. When asked by the market-research firm what they would recommend about their service to a friend or family member -- and asked to choose between speed, customer experience, brand and services -- more than 50% of respondents picked speed.

Vodafone, for one, sounds eager to get away from this obsession with the megabit flow. Matt Beal, the operator's head of technical architecture, envisages a time in the not-too-distant future when speed will be irrelevant and customers will not be able to distinguish between network technologies on that basis. "Customers will solely be focused on the service that we render -- its ability to be agile to their needs, and its ability to be relevant and personalized," he told UBB Forum attendees during his presentation.

But is this really plausible? If there's anything the short history of broadband has told us, it's that the relentless consumption of bandwidth has kept telecoms engineers constantly on their toes. Networks and services have always spurred each other's development, and it's hard to see this changing.

It's even harder to imagine after hearing some of the UBB Forum speakers describing the services that broadband networks may have to support in the years ahead. Besides 4K, 8K and even 16K TV, we have artificial intelligence, virtual reality gaming, robotics and remote-control surgery to look forward to. Operators will surely have to continue investing in their networks to meet this demand, and customers who are slow to adopt newer technologies seem bound to get a poorer quality of service than their more adventurous neighbors, as is the case today.

Operators are fond of telling journalists that customers don't care about the underlying technology – they only care about their service experience. In fact, operators have made customers care about the technology by emphasizing its importance to that experience. In the UK, note Virgin Media's heavy promotion of 'fiber optics' when BT was still solely reliant on copper, or EE's plugging of 4G while its rivals were stuck with 3G/UMTS.

Mark Winther, group vice president and consulting partner of worldwide telecoms at IDC, another market-research company, even told UBB Forum attendees of a recent conversation he had in Denver, Colorado, with a coffee-shop barista, who expressed an eagerness to get GPON installed at his home.

Of course, if operators have failed to market capabilities other than speed, it's partly because they've made a feeble stab at developing those capabilities in the first place. Most notably, they have struggled to either compete against or collaborate with OTT players. But what are 'branding' and the 'customer experience' other than the final layers of polish?

In the absence of a coherent OTT strategy, operators foremost have to think about their core competence of pumping bandwidth down a pipe. And that's likely to remain as relevant and visible to customers in the future as it is today.

— Iain Morris, Site Editor, Ultra-Broadband

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MikeP688
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MikeP688,
User Rank: Light Sabre
10/3/2014 | 10:52:32 PM
Re: Brief Thoughts On the Future....
I would argue that we're already there with ComCast-NBC.    We can be creative by say having a "FreedomPop", install a ROKU app, get Amazon Prime, NetFlix and other "stuff" to take care of the video and rely on the news thru the interent.  The problem is spped and Bandwith--something we have also deliberated--because the need for bandwith for delivery of content is ever so as well.

Interesting times we live in..that's for sure :-) 
MikeP688
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MikeP688,
User Rank: Light Sabre
10/3/2014 | 10:49:27 PM
Re: Brief Thoughts On the Future....
Having lived thru a Revolution, I would not want that frankly on anyone--The question though is how this evolution is going to work itself out.    I was thinking about this as I installed a new App on Chrome to help with my email--and was updating a few Apps earlier on my increasingly clunky iphone 4. :-) 
mhhf1ve
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mhhf1ve,
User Rank: Light Sabre
10/3/2014 | 9:45:04 PM
Re: Changing gears
I'm not so sure that customer service is the /best/ place to start for an ISP to differentiate. It would actually be incredibly difficult to do (for the residential market), too, unless an ISP were able to build out and control its own entire network. There are some CLECs that try to build on top of ILEC networks and provide better customer service to enterprise customers, but they can do that because the end customer is able to spend quite a bit to get someone else to create a business critical service that an ILEC can't (or doesn't want to) provide.

For example, large nation-wide retailers like Walmart and CVS pay a CLEC to aggregate all the broken up ILEC telecom services into a single service. ILECs in different states don't really want to work together to build such a product, but a CLEC can do it and charge a premium for it and provide a better customer service than Walmart having to deal with various branches of AT&T and Verizon in different states that Walmart operates in.

So it might be nice for someone to try to differentiate on customer service, but it would probably have to be the service providers who actually own/control the physical network. Amazingly, Comcast consistently has the worst customer service ratings... but it has only made marginal improvements on that front. So until there is actual competition that gets customers to vote with their wallets, there is not much motivation for ISPs to improve customer service all that much.
mhhf1ve
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mhhf1ve,
User Rank: Light Sabre
10/3/2014 | 9:26:17 PM
Re: Brief Thoughts On the Future....
Mike, This is a nascent trend, I think. AT&T has started to offer free Amazon Prime with one of its Uverse tiers -- so that Amazon's Instant Video selection is available to potential cableTV cord-cutters via this package. Amazon has some original content, so this might be a way to make AT&T's data pipe at least somewhat unique (although, you could just get Amazon Prime and sign up with another ISP).

Not too long ago, Yahoo partnered with ISPs to bundle its "portal" services with "dumb pipes" to make the pipes seem a bit more valuable, but I don't think consumers really bought into that bundle. So the value-add proposition has to actually be something consumers want, not just something that might seem like it could have value....

But back to content... Comcast+NBC could become a new kind of content distribution system. Someday. Maybe. If anti-monopoly laws aren't violated. 
Liz Greenberg
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Liz Greenberg,
User Rank: Light Sabre
10/3/2014 | 8:47:28 PM
Re: Brief Thoughts On the Future....
So glad that you said evolution....revolution it isn't.  Butnyes, it is always a lot of fun to watch.
MikeP688
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MikeP688,
User Rank: Light Sabre
10/3/2014 | 5:24:33 PM
Re: Brief Thoughts On the Future....
Glad to see that your provider is as engaged as it is.  It is ever so part of a prevailing trend that I have seen throughout the country (including Cox & yes even AT&T).    How they continue to distinguish themselves will prove to be the "icing" on the cake or not.     It is fun to be witness to such evolution...isn't it? :-)
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
10/3/2014 | 1:38:02 PM
Changing gears
Speed and cost have been a constant in ISP marketing for 20 years. That suggests the market is ripe for somebody to differentiate. Customer service is a good place to start -- ISPs rank consistenly low in customer satisfaction surveys. ISPs can also make partnerships with OTT providers, and market those. 

 
Liz Greenberg
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Liz Greenberg,
User Rank: Light Sabre
10/3/2014 | 10:42:58 AM
Re: Brief Thoughts On the Future....
Mike there are other value adds for instance, my provider adds in telephone service without a surcharge and VPN capabilities.  The VPN capabilities are not used by most customers because they don't understand the purpose.  Additionally, you can have static IP addresses rather than just dynamic.  These are just a few of the value adds that are possible but not offered.


As for SLAs, nearly impossible since the biggest slowdown is not the final "mile" but often at the servers delivering content or somewhere else on the web.
DHagar
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DHagar,
User Rank: Light Sabre
10/2/2014 | 3:44:29 PM
Re: The Perennial Need for Speed
kbode, exactly.  They haven't had to deliver and assume, except where entered into in the Service Agreements, financial risk.  They can claim all they want - the delivery is somethng else. 

That's why I like the idea of competition via services (ie Vidafone) that may change that.
jabailo
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jabailo,
User Rank: Light Sabre
10/2/2014 | 2:00:46 PM
Re: The Perennial Need for Speed
Despite the claims they are answering the need for speed, they are not.

There is no ISP that guantees a minimum speed for all 24 hours of the day, without any bandwidth throttling.

There is no ISP that will guarantee a minimum ping time for gaming.

There is no ISP that will guarantee uptime within a minimal range.

No ISP will give to the customer what every IT department demands -- a SLA, Service Level Agreement, which, if violated, means that the vendor takes a financial responsibility.

 
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