Broadbandtrends recently published its 2014 Global Operator survey on Gigabit Broadband Services Strategies (BBT_SPSurveyGigabitBroadband_141280_TOC). We had tremendous participation on this survey – over 120 operators – but through a very stringent screening process – which focuses responses to key decision makers and those operators that are currently offering or plan to offer these services within the next 3 years, we ended us with 88 qualifying operators from all major regions, across all operator types (ILEC, CLEC, Cable MSOs, Wireless, Municipality, Utility, and competitive Overbuilder).
This survey provides valuable information on the state of the Gigabit Broadband Market – why types of customers are being served, what technology is being used for deployment, and what are the current and future services to be offered over this network. In addition, we asked operators to rank their Top 3 drivers and Top 3 Challenges for offering Gigabit Broadband services, provide anticipated build-out (network coverage) and take rates over a five-year period. Finally, we asked operators to rank the importance of offering Gigabit Broadband services across six metrics: Customer Retention, Customer Acquisition, Technology Leadership & Perception, Competitive Environment, OPEX and Revenue Generation.
From a demographic perspective, we did have the strongest participation from the North American market (73%) – where no one can dispute there is more Gigabit Broadband activity in this region than anywhere else in the world. But there was also strong participation from the EMEA region, followed by CALA and APAC.
But unlike most operator surveys – in which regional differences are apparent – the differences in strategy, drivers and challenges were found among the operator types.
For Telcos, offering Gigabit Broadband services finally provides them with the necessary competitive differentiator that will enable them to effectively compete against cable operators.
For municipalities and communities, Gigabit Broadband becomes the economic engine driving investment and job growth, while drastically improving education, healthcare, and community services, while providing the pathway towards becoming a Smart City.
We did find it interesting that being viewed as a Technology Leader was not only the #1 driver for deployment of Gigabit Broadband, but it also ranked the highest in terms of importance – ahead of customer acquisition, retention and revenue generation.
While being first to enter a market certainly allows an operator to capture a larger share of the market, it will be important for these early pioneers to continue to differentiate from the competition through new services, bundles or packages. Otherwise, once the market reaches equilibrium (all operators offer Gigabit broadband), they will face the same challenges they do today.
The top challenges to building and offering Gigabit Broadband – cost, customer demand and uncertainty on ROI – are the same that have challenged operators with any major network upgrade, particularly FTTH. However, the pre-registration process – which is based on a strong business plan that clearly delineates what is needed for success – is not being used by the significant portion of operators entering the Gigabit Broadband market. As such, anticipated take rates are surprising low and more interestingly, uncertain. Perhaps this is a “build it and they will come” scenario.
The results of our survey illustrate some serious disconnects between drivers, challenges and actions. Being a Technology Leader is certainly important, but long-term success will be measured by how operators leverage this position to increase both subscribers and revenues.