By: Drew Rockwell, Chief Executive Officer, MDS

How intelligent O/BSS systems and light-touch integration can provide a rapid and low-risk go-to-market strategy for Cablecos looking to exploit a growing market opportunity

Consolidation in the Consumer Market

By most accounts Cablecos have enjoyed reasonable growth throughout the recent financial downturn. This is in stark contrast to the Telcos that have been forced to downsize operations in the face of shrinking revenues, fierce competition from smaller, more agile Webcos, the rising cost of maintaining legacy systems, and margin erosion.

Much of the growth experienced by the Cablecos / Multiple Service Operators (MSOs) has come from the uptake of broadband internet and VoIP (Voice over IP) services rather than the traditional TV/Video services, which has had the effect of further eroding voice revenues for Communication Service Providers (CSPs).

For the MSOs, however, this growth is very much restricted to the consumer and SMB market segments. Typically the commercial (SMB) market accounts for only 10% of MSO revenues, the balance being generated through consumer services. By comparison, CSPs derive a far higher proportion of their revenues from business customers, typically in excess of one third.

Telecoms Managers Looking for Unified Communications An opportunity therefore exists for the Cablecos to achieve incremental growth by addressing the lucrative and substantial business market. To do so will require a significant step up in service flexibility to meet the demands of the Enterprise customer, including sophisticated tariffing, convergent billing, and hierarchical account structures.

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And if the SMB and corporate segment offers MSOs a new market to attack, then Unified Communications (UC) presents a compelling value proposition that would attract genuine interest from the business community.

An independent survey commissioned by MDS 'Connecting with Business Customers', compiled earlier this year from 200 online interviews with Telecoms Managers of with than 100 employees, identified key trends in business-focused Telecoms that reinforce the demand for Unified Communications:

  1. Gaining better control of telecoms cost is the #1 priority for 2011 (69%), followed by reducing overall telecoms spend (43%) and enhancing the value of telecoms services to the business (37%)

  2. 65% of telecoms managers recognise there are savings to be made by looking in greater details at telecoms bills and contracts but 52% say reviewing telecoms infrastructure is something they don't really have time to do

  3. 38% have plans to reduce the number of CSPs they deal with – 96% of these plan to introduce Unified Communications

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