In today’s data-driven world, hardly a day goes by without new predictions of dramatic increases in streaming video consumption and Internet of Things device proliferation. Whether it’s eMarketer’s prediction of 2.38 billion viewers of video streams or Gartner’s forecast of more than 20 billion IoT devices by 2020, it is clear that a sea change is occurring that will have significant impact on the cable telecommunications networks that deliver the majority of broadband services.
To manage the increased strain on their networks, cable-system operators require granular visibility into subscriber usage that can help them understand the location and cause of broadband bottlenecks. But while tools that identify areas of congestion and high-bandwidth users can proactively solve operational issues, operators are finding that they can also be utilized to generate business results by helping operators reduce expenses and create incremental revenue opportunities.
‘Power Users’ on the Rise
OpenVault data analysis shows that year-over-year usage was up 31.3% in second-quarter 2018 and that the number of “power users” — those using more than 1 Terabyte of data per month — doubled during the same span. As traffic and individual usage increase, the results can be slowdowns in network speeds and an increase in the number of users who are bumping up against the limits of their contracted plans.
Ultimately, this can cause customer complaints that unnecessarily consume operator resources, including call center personnel and even truck rolls, and can lead in the long term to dissatisfied customers defecting to other broadband providers.
When operators gain greater visibility into broadband usage, they proactively are able not only to manage the traffic concerns, but they also have an opportunity to implement business strategies that can modify customer behavior, including a reduction of usage or alignment of customers’ broadband plans with actual consumption. For example, operators could implement usage-based broadband policies or could target high-bandwidth consumers as candidates for upgrades to levels that would deliver satisfactory performance.
Two datasets released this year showed that consumption by non-usage-based broadband households is 12.2% higher than those with usage-based broadband packages, and that non-usage-based broadband households consume 15% more upstream bandwidth than usage-based broadband customers. Thus, the implementation of usage based broadband pricing with data consumption limits can improve overall customer experiences by reducing network congestion, while also opening the door to additional revenue.
On an individual level, operators can leverage visibility into specific user behavior to create incremental revenue opportunities, including not only usage-based billing but also analytics-driven alignment of customer usage with the appropriate broadband package and zero-rating policies. It has been proven that companies that use highly accurate and broad sets of data to replace blind sales calls with intelligent leads are able to identify prime upgrade candidates and drive incremental broadband ARPU by $2 to $3 per household based on a subscriber upgrade rate of 15-20%.
Zero-Rating as Differentiator
Under increasing consideration as well by operators as both operational and business tools are “zero-rating” policies that exempt some OTT video services from monthly usage-based data policies. Zero-rating-specific streaming services can help operators differentiate their services beyond just pricing and speed tiers, especially as wireless providers develop and launch 5G services. The likelihood of broad adoption of this practice has increased as a potential differentiator in the market, resulting in faster subscriber growth and improved retention.
Ultimately, in this fiercely competitive marketplace where data is growing at exponential rates, operators must look for new ways to
meet demand, retain subscribers, differentiate their services and drive profit. For the pioneers who embracing comprehensive approaches to data analytics, the ability to adjust broadband service delivery to meet changing market needs is enabling them not only to deliver high quality service, but also to ensure customer satisfaction and bottom-line success. )
Mark Trudeau is founder and CEO of OpenVault.