Earlier this week industry analyst firm Analysys Mason released research revealing that broadband speeds can play an important role in customer retention. While price is important to many, the researchers note that “customers who take higher-speed broadband services are both more satisfied and less likely to churn than those with lower-speed services.” This is not surprising; the focus for service providers is coverage and speed as they invest to cover the land or air with faster pipes and radios. Analysys Mason went on to posit that “offering superfast broadband speeds to all customers could reduce annual churn rates by 3 percentage points per year.”
Given the rising dominance of data revenue (data has eclipsed voice revenue in the North America fixed residential market and it is expected to happen for mobile here in 2013; while the GSMA predicts that mobile data revenue will eclipse voice globally in 2018) means that service providers are increasingly focused on satisfying the consumer need for speed. If service providers can adequately deploy high-speed broadband and bundle it with voice and video services that allows them to protect some serious APRU from defecting and reduce costs for customer win-backs.
We are hearing this very sentiment from service providers that have built networks to deliver double- and triple-play services: the investments to maintain, expand and improve all areas of the network are just too much. This is leading some service providers to rethink their approach to service delivery. This is one of the compelling aspects of the cloud voice platform. This wholesale model allows service providers to cloud source the building and running of a voice network and prioritize investments without sacrificing the service bundle. They can shift CAPEX and internal focus to building out the broadband networks and, given the SaaS-based model of the cloud, better align voice costs with voice revenues.
One service provider we are talking to estimated that 30% of its engineering resources are dedicated to voice; even if the cloud voice platform is the exact same cost as their existing network, if they could shift that 30% to its topmost priority of data capacity and higher speed broadband, they could achieve that goal faster and likely have positive impact on customer loyalty and ARPU protection.
So, service providers, look to the power of the cloud to free you from running a voice network. Unleash that capex and expertise in your IT and operations staff to boost your broadband.