This Industry Viewpoint was contributed by Ken Kennedy, CTO at CSG International
Today, telecom companies are undergoing a transformation in order to adapt their business models in a way that better engages the modern digital consumer. In 2015 we saw a great deal of shake-up in the media landscape, including a number of mergers and acquisitions and a continued rise of alternative service offerings, all pointing to an uncertain future for the market.
As we evaluate what the future holds, and service providers shift their focus toward the customer experience to better engage the next generation consumer, there are a few trends that I predict will drive telecom transformation in the new year:
Service providers will try to appeal to cord cutters with new subscriptions offerings, including “skinny bundles”
While the majority (83 percent) of American still pay a monthly cable fee, there is a growing number of consumers who are looking for options outside the standard cable and mobile packages. These “cord cutters,” as they have been dubbed by the media, want greater variety and personalization when it comes to their subscription offerings. In 2016, service providers need to focus on offering unique and customizable skinny bundles. In comparison to traditional offerings, these slimmed-down bundles would need to offer an a-la-carte feel that is attractive to consumers today, especially millennial audiences. By offering this more personalized approach, service providers can not only attract subscribers, but also begin to better engage today’s viewing audiences by providing a more customized experience.
Implementation of new distribution models and a focus on the Quality of Experience will be critical to engaging digital consumers
The Quality of Experience will be a crucial differentiator for digital service providers in 2016. With video traffic growing to make up 80 percent of all consumer internet traffic by 2019, creating a seamless and high quality experience across devices will be critical for service providers in the new year. Digital consumers want to have access to their favorite shows from anywhere and at anytime – so they can start watching their favorite show on their tablet from the road, and finish it from their couch when they get home. Furthermore, personalization is imperative not only in the bundle offering, but also in the viewing experience. By implementing customized recommendation engines that tell viewers what they should view next based on their history, or providing integration with social media to encourage active viewing and sharing, service providers can enhance the viewing experience to make it easy, seamless and “sticky.”
Providers will increasingly innovate around their portfolio of offerings, moving beyond television viewing to attract consumers in new ways
As digital services continue to become a major focus for service providers, my third prediction is that we will increasingly see telecom providers dipping their toes into new, and potentially unexpected, pools. Being the network provider is a huge asset for cable companies – whether wired or wireless, it gives them an almost limitless market for innovation, not only around pricing, but on potential future bundles as well.
The future service provider has the opportunity to introduce a portfolio of offerings. By exploring creative pricing bundles when integrating services such as mobile or integrating aspects of the connected home, cable companies can take advantage of data networks to fuel future bundles.
In looking to 2016, telecom providers face a number of challenges in defining their future role. However, there is also a great deal of opportunity to engage digital consumers by focusing on personalization in subscription offerings, the quality of experience across devices and exploring new innovative offerings.