Ovum: Service Providers Should Focus on the Channel

In a new report, telecom industry analyst Ovum says service providers have opportunities to succeed by focusing on the channel.

Over the past two decades, Ovum says, broadband access has provided a good revenue source and has been highly profitable for many, but service providers have never really been able to take full advantage of the other opportunities broadband access provides.

IPTV and VoD have been a success for some, but certainly from a profitability point of view, will not be an option for all. Many of the other opportunities often highlighted, such as online music, gaming, and even technical support and content backup have also been taken up by other players and therefore have become fiercely competitive markets.

“One issue that service providers will have to tackle if they are to get back in the game, is a more prominent marketing channel into the consumer home,” said practice leader Michael Philpott. “Often the main points of customer contact for the broadband service provider is when the customer first signs up from the broadband service, and when something goes wrong – with only the odd e-mail flyer in-between. Operators can try and do take advantage of these main points of contact, but to be really successful, they need to be looking for innovative and eye-catching ways of opening up more consistent communication channels with their customer base.”

Ovum says such innovation is starting to enter the market. Those few service providers that still have a successful Internet portal are starting to innovate around that as a way of entertaining, helping, communicating with and up-selling services to existing clients. Others, who do not have a very successful portal, are starting to experiment with free services, to gain the initial traction, and then looking for ways to further up sell services on top of the initial offering.

One such pilot by a tier-one player in the U.S. found that such a strategy increased its marketing success rate over traditional methods by 200 percent. It also gained:

Such innovation has been a long time in coming, says Ovum, but it is certainly not too late, and operators will need to continue to innovate in both the services and applications they offer, and in how they market and deliver those services, if they are to successfully grow consumer revenues in the long term.