VEERING TOWARDS VALUE-ADDED: THE FUTURE FOR ISPs
Consolidation, commoditisation and competition.So what’s the good news for ISPs? Is it just more of the same or are there new opportunities for ISPs that can differentiate through product and service enhancements?
Emma Osiransky has been part of the Broadband Portfolio team within BT Wholesale for the past two years. She has recently been involved with helping to define and assess both the current broadband portfolio and the emerging 21C portfolio. In addition to this role, for the past few months Emma has been responsible for helping to identify growth opportunities within the market place.
Between The Lines asked Emma, as a close watcher of the broadband market, for her views on the emergence of a new era of value-added services and what that means to ISPs
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BTL
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What’s driving the need for value-added services among broadband providers?
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| EO |
Overall it’s because the whole market is changing. The last twelve to eighteen months have seen massive consolidation with ISPs offering pretty much like-for-like broadband products to end-customers. But now we are seeing the emergence of a marketplace characterised by distinct opportunities and room for differentiated broadband propositions that compete on more than just price and speed.
To some extent this has been brought about because ISPs have an urgent need to address and replace falling revenues – revenues that have been eroded by downward pressure on prices. But also, service providers are all very eager to reduce churn by offering bundled services. And that’s where value-added services come in.
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BTL
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What sort of value added services should ISPs be looking at then?
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| EO |
A good example is traffic management. This is about a mechanism to help ISPs improve the control of traffic over networks. Customers are using more and more applications which, without efficient management, can result in an increased backhaul cost burden. However, more than that, traffic management enables ISPs to prioritise particular services and provide and charge for additional services (such as Quality of Service and bandwidth reservation). These services enable ISPs to provide an improved customer experience; enhancing the quality of specific applications and content that they deliver to their customers
There’s also home IT services. Today’s consumers tend to have more than just a single PC at home. They often have networked PCs together with all sorts of broadband-related equipment ranging from set-top boxes to wireless routers to music players and PVRs. ISPs are looking at offering a number of home IT support packages that customers really value. These range from diagnostic software packages to agent-controlled remote diagnostic solutions to high end ‘man in a van’ services. |
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BTL
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Network security is becoming more popular too?
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| EO |
Yes. Network security is about moving beyond having something like Norton or MacAfee products your computer. It’s a value-added service that involves providing security within the network so that ISPs can deliver a clean feed to their customers.
I think it’s also worth mentioning network storage. ISPs see this as a value-added functionality that has a great deal of relevance and appeal to the increasing number of consumers who download music and store digital photography. Another example of the importance of network storage is the recent deal between BT and ITV. ITV recently decided to digitise its entire back catalogue of content. BT’s digital storage platform is a prerequisite for cost-effectively reusing broadcast material. This type of solution helps define the future of entertainment, by making content available through new channels such as the internet, mobile phones and MP3 players.
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BTL
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How can BT Wholesale help broadband providers to move into value-added services?
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| EO |
Our broadband access portfolio means we are very much a one-stop solution. We can help potential VAS providers by taking a lot of the provision headache away from them by offering services that range from a fully managed integrated solution to a ‘one off’ product offer . We have a 21CN broadband portfolio that enables multi-services over a very resilient network and we can help with issues such as integration or call centre management. |
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BTL
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In this era of value added services, will there still be room for no-frills broadband providers?
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| EO |
Absolutely. Not all consumers will want a full range of value-added services. Some will just want basic access at an attractive price. Others will want high speed and some will want a broadband that comes with high quality customer care. It’s this range of offerings that will help shape the market. |
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BTL
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What other VAS products are currently available for ISPs?
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| EO |
In addition to our security and storage products, at the end of 2006 BT IPstream Max was enhanced with BT Ipstream Advanced Services ,which offers End User Speed Control and Downstream Quality of Service. End User Speed Control allows customers to directly change the downstream speed of their End Users’ access in steps, dependent on the maximum speed of BT IPstream product that the PSTN line can support. Downstream QoS provides assured rate downstream bandwidth enabling our BTW customers to offer applications that may require guaranteed bandwidth such as some voice applications and video streaming. |
Read more about broadband add-ons in this issue of Between The Lines.