Double play. Triple play. Quadruple play.
No, we’re not talking about miraculous baseball feats—we’re referring to bundles of fixed, cable, mobile and internet services offered by a single communications service provider (CSP).
The Rise of Service Convergence: A Wave of Innovation
Service convergence is not just a buzzword; it’s a tangible reality shaping the future of telecommunications. Broadband and internet services are merging with mobile (93%) and fixed (87%) services, according to more than 80% of industry experts surveyed. This innovation is paving the way for a unified and streamlined customer experience.
To thrive in a highly competitive industry, cable operators must deliver a seamless, converged services model across all networks, including cable, mobile and fixed. But doing so can be easier said than done.
Heavy Reading partnered with CSG to survey 93 North American cable and internet service providers (referred to as “service providers”) regarding service convergence trends and growth strategies. Here’s what we learned.
Focus on Successful Service Delivery and Greater Network Investment
Effectively delivering a unified customer experience requires taking a strategic approach and prioritizing specific capabilities. Among the most widely suggested strategies among service providers were:
- Have a customer-centric focus. Understanding and addressing customer needs is paramount (91% of respondents).
- Integrate 5G: Harnessing the power of 5G is crucial for enhanced performance and innovation (89% of respondents).
- Offer cloud-based delivery: Embracing cloud-based infrastructure enables agility and scalability (89% of respondents).
- Expand your ecosystem: Collaborations and partnerships foster growth and market reach (88% of respondents).
Additional Network Investment Is a Prerequisite for Success
To support the demands of converged services, additional network investment is inevitable. Almost all (89%) of service providers surveyed acknowledged the need for increased network capacity to meet the evolving requirements of customers and technologies.
A Reduced Focus on a Bundled Service Model Is Leading to New Services
While bundled services serve a purpose, a shift towards specific use case models is gaining momentum. Most (71%) service providers recognize that customers appreciate tailored offerings that address their specific needs and preferences. As consumer options expand, innovative service providers know that allowing customers to build their own bundle, selecting only the services they need, will likely be the norm. This transition, however, will require time and adaptation, as 59% of respondents still rely primarily on bundled services.
Benefits and Limitations of Bundled Services
Bundled services still offer certain advantages, such as:
- Flexibility in pricing models
- Reduced marketing costs
- Simplified customer acquisition
Service providers have integrated additional services into existing bundles based on market demand, including:
- Parental controls (73%)
- On-demand premium video streaming content (65%)
- Home security (52%)
- Gaming (44%)
- Health monitoring (29%)
Despite these advantages, bundled services face certain limitations:
- Decreasing customer interest (28%), leading to churn
- Difficulty in upselling (24%)
- Perception of being outdated (22%)
Growth Strategies for Thriving in the Converged Services Era
To navigate the evolving landscape of converged services, cable operators can adopt strategic growth strategies:
1. Enter the mobile market:
- As an MVNO (Mobile Virtual Network Operator) (40%)
- As an MNO (Mobile Network Operator) (31%)
Cable companies driven by the increasing popularity of mobile services and the potential for revenue growth are entering the mobile market, grabbing an ever-growing share. The speed of 5G networks (72%) and the consumer allure of 5G devices (62%) are the top two mobile entrance drivers. Leaders like Comcast and Charter entered the mobile realm in 2020. And the sixth-largest U.S. cable provider, Astound Broadband, recently launched Astound Mobile, with plans to serve four million homes using T-Mobile’s network. The mobile service revenue pool is nearly 2.5 times greater than residential broadband, making mobile a lucrative prospect for cable companies.
2. Migrate services to the public cloud:
- Parental controls (67%)
- On-demand premium video streaming (62%)
This migration is driven by the scalability and cost efficiency of public cloud platforms.
3. Acquire new tools and technologies:
- Digitization programs (55%)
- Automated network operations (54%)
- Advanced analytics (53%)
- Automated network optimization (45%)
These tools and technologies enhance service delivery and operational efficiency.
Want to learn more?
As the telecommunications landscape undergoes a transformative shift, service convergence emerges as a driving force, blurring the lines between traditional fixed, cable, mobile and internet services. This convergence, characterized by the seamless integration of communication networks and technologies, presents a wealth of opportunities for cable operators to enhance their offerings and expand their market reach.
CSG, a leading provider of innovative customer engagement, revenue management and payments solutions, empowers cable operators to thrive in this dynamic environment. Our cloud-first architecture and customer-centric approach enable cable operators to:
- Launch cutting-edge digital services.
- Expand into untapped markets.
- Create dynamic customer experiences that attract new subscribers and foster brand loyalty.
With CSG’s expertise and solutions, cable operators can confidently navigate the complexities of service convergence and unlock their full potential in this rapidly evolving market.
MWC Barcelona
Did you miss this year’s event? You can still meet with CSG’s experts to talk about initiatives that are practical enough to apply now, and bold enough to drive growth far into the future.
