Can Cable Conquer Europe's B2B Sector?
LONDON – Cable Congress 2013 -- Europe's cable operators have a number of opportunities to build on the collective revenue growth they experienced in 2012, according to Ewan Mackay, managing director for the Cable Industry, EALA (Europe, Africa and Latin America), at Accenture.
(See Cable Operators Boast Euro Growth.)
The region's cable players have built a good networking foundation on which they can develop and deliver additional revenue-generating services, with the "connected home" and business services two key niches that have significant potential.
Mackay tells Light Reading Cable that the business-to-business (B2B) sector is "the forgotten arm" of the industry and one where the region's cable players can capitalize on pent-up demand from the small and medium-sized businesses.
While U.K. operator Virgin Media Inc. has focused on that market with its Virgin Media Business Ltd. operation -- it generated revenues of £670 million (US$1 billion) in 2012, about 16 percent of total revenues, from its backhaul, Ethernet and voice services and contributed 40 percent of Virgin Media's full-year growth -- other European operators have not been as focused.
"It's time to embrace B2B," says Mackay. "The cable operators can build on the success they have had in the consumer sector and take that into business services. They can take the experience of how they have segmented their consumer customers, using business intelligence [tools] and social media interaction, and take that into B2B." There is "latent demand" in the SMB and local authorities/government sectors that the cable players can tap, believes the Accenture man.
In the "connected home," he believes cable operators have the infrastructure in place to deliver automated applications over consumer home networks, but he notes that the cable players have yet to make any concrete decisions about whether to tap into this potential market or decide exactly how they might do that.
"They're on a watching brief … they need to decide whether they should develop the connected home applications themselves or be the aggregators for third-party applications," states Mackay.
More broadly, he notes that Europe's cable operators have done well to counter the potential threat of the OTT service providers by enhancing their own services options using platforms such as TiVo Inc.
and multimedia home gateways that deliver video applications such as YouTube and Netflix Inc. as well as the operators' own services. "The big question is -- how dominant might those OTT services become on the cable networks?" asks Mackay.
He also notes that the region's cable players are now much more focused on customer experience issues than before. "In my interactions with the operators there's a real focus on the end-to-end relationship between the service provider and the customers," including the use of social media channels such as Facebook and Twitter to interact with end users. "Those conversations weren't happening at all three-to-five years ago."
— Ray Le Maistre, International Managing Editor, Light Reading