Ma Bell Doesn’t Live Here Anymore

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When it comes to consumer communications, the residential subscriber story is becoming a tale of two households: narrowband and broadband.

Research indicates that broadband households are rapidly devouring new broadband services — services that take advantage of the greater bandwidth coming into and throughout the household.

To date, these new services have mainly revolved around entertainment. However, one area that has not kept pace with innovation is family communications.

While consumers are now able to play games between computers in the home, access the Internet from any place in the house and watch their favorite television shows according to their personal schedules, communications outside of the household are still confined to either audio or text.

Multidimensional digital home communications remains a largely untapped opportunity.

With its bandwidth limitations, the traditional “plain old telephone service” (POTS) is not the answer to multidimensional home communications. In fact, studies indicate that it is losing ground to other voice and text communications services.

Wireless services are beginning to displace POTS as the preferred consumer communications solution.

And voice-over-Internet protocol services, provided by nontraditional service providers, are rapidly gaining a foothold in the home as well.

Traditional communications service providers, facing the possibility of being left behind, are now racing to launch digital communications services into the home.

Many service providers have realized that the “replace analog voice with digital voice” approach to digital communications will not allow them to take full advantage of the digital home-communications opportunity.

This approach does not add value to consumer communications in the digital home, and would be akin to offering a digital cable service with “analog cable” features and functionality.

This strategy offers low “relative advantage” to the consumer, and can only compete based on lower pricing. Bundling this service along with other existing communications and entertainment services may provide the consumer the convenience of purchasing several services through one bill, but it does nothing to increase the amount of wallet-share that is spent on digital home services.

These service providers are instead following the lessons learned from successful digital-entertainment deployment to introduce digital communications services that have high value to consumers.

Digital-entertainment providers have discovered the high value that consumers place on services that provide increased control, make their digital experience richer, and simplify their lives.

It is now becoming apparent that digital video recording services are leading the way for consumer digital entertainment adoption. This is because consumers have always been willing to pay for services that provide them with more “control” in their lives.

A second learning from digital entertainment is the importance of dimensionality. Why is it that most digital audio software comes packaged with “visualizations” and “skins?” It is because digital consumers want and expect their digital services to go beyond just a single dimension.

And yet, when it comes to residential communications, consumers have been relegated to just text on their PC and just voice on their home phones. The availability of broadband in the digital home now allows service providers to provide services such as PC-based, high-quality video calling that make talking with friends and family members in other locations, or even other countries, a multi-dimensional experience.

The successful deployment of entertainment services such as remote control services and “on-screen guides” demonstrates the opportunity to provide services that simplify digital home activities. Service providers are now providing digital tools to simplify personal contact management, such as online access to everything from contact information to a listing of incoming and outgoing calls.

The bottom line is that Ma Bell’s kids are growing up. They — and other innovative service providers — understand the tremendous potential that awaits them in providing not just voice bundled with digital home entertainment, but digital home communications services that leverage the capabilities of the narrowband, broadband and wireless pipes within the household to simplify and enhance our communications capabilities.

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