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Content is King – and what it means for telco strategies

The telecoms ecosystem is incredibly diverse and it’s easy to forget that there is a host of providers of key services that simply do not register in daily news bulletins. They may provide services locally or nationally, but tend to slip under the radar and do not, on the whole, attract a great deal of attention.

For example, there are more than 200 ISPs in the UK, many of which operate in a specific geographical area. We’ve met a few of them over the years and, last year, we participated in a very interesting panel discussion at a meeting on super-fast broadband delivery that was held in Manchester. The UK Government has provided funds to help spread faster broadband access across the country and to enable small businesses to obtain connectivity with the help of subsidies and grants.

Much of the meeting was taken up with the experience of local councils and other stakeholders in helping extend broadband to remote communities and progress in tapping the grants available (slow, could do much better, was the general conclusion), but there was also a good discussion on the topic of future strategic directions for these independent ISPs.

We’re returning to the topic because we have also had some informative conversations with mobile operators this year – and we’re struck by the similarities in challenges. As is well known, today’s operators are challenged to find relevance with consumer and retail customers.

According to one strategist from a leading regional operator, whom we met at MWC, there are essentially two elements to its strategic plans. First, secure content deals so that it can deliver exclusive coverage of the leading football leagues to customers. Without content, it’s just a provider of network connectivity and coverage - any other service or application will probably be delivered by some other provider, but accessed via the MNO’s network. Football (or something equally popular) is, it seems, the key factor in delivering something that is relevant to the lives of customers.

The second part of the plan required an enhanced focus on the needs of business and enterprise segments. There was recognition that future success and sustainable revenue growth can only be found by addressing the needs of B2B customers effectively. There are significant opportunities to meet unaddressed needs and actually capture new revenue.

So there you have it. Either invest in content partnerships or chase B2B customers, or both. It was a refreshing viewpoint and, as we found, one shared by others. As a plan for action goes, it’s quite a simple one, but one founded on realism. Of course, there are lots of things that operators can do around the edge to enhance efficiency and provide a better experience to customers – arguably, they should be doing this already, as everyone should care about delivering the best possible customer service and experience, shouldn’t they? But, it seems that, as far as consumers go, what it really comes down to is content. In other words, all the things about experience that have been discussed are interesting and perhaps helpful, but what customers really crave is quality content.

If you don’t have relevant and attractive content, then consumers will find it elsewhere, simply treating their operators as connectivity providers (not necessarily a bad thing, provided you are good at it). Which brings us nicely back to our ISP friends. Many of these are struggling. They have small market share in a landscape dominated by large, well-known players. In most cases, you really have to look hard to find these alternative providers - you have to have an almost nerdish interest in finding technology providers and few of us really have time to invest in this or even the inclination to do so.

To date, many have been focused on consumer and retail customers. Indeed, many had great success in winning customers but are now challenged by the power of the dominant players. But with the most attractive content deals now in the hands of a small number of providers, most consumers will continue to be attracted to these. A handful of players dominate the market and, unless Ofcom does something about it, will continue to do so. Maintaining a focus on the needs of a vanishing pool of consumers doesn’t seem a viable strategy in the UK market today.

In this context, there really seems to be only a single strategic choice for smaller ISPs that do not and never will have access to the kind of content consumers find attractive – invest in the needs of business customers through the provision of, first enhanced connectivity and then through the delivery of cloud-orientated services that can be accessed across this infrastructure.

There’s a lot of discussion about strategic choices for telcos, of any description. We think it’s really quite simple. All operators with network assets have simple choices in front of them, but the strategic plan can be distilled into a simple set of actions: Invest in the best network possible Provide a better customer experience and invest in continuous improvement Try to understand customers better through analytics Acquire content, if you can Invest in B2B markets

If you haven’t got or cannot acquire content, then provide a good and reliable network while focusing on B2B customers. If you have got content, invest in B2B customers too, as they represent an opportunity for growth. Without a superior network, customers will leave anyway; it’s just a matter of time. Operators are undergoing an existential crisis and are concerned about their future. It’s really simple – at least as far as consumer customers go.

But that doesn’t mean there aren’t opportunities. There are many. It’s just that spending time considering some mythical new service that may excite your consumers and make a difference, but almost certainly won’t, is really a waste of effort and energy. Some other provider will come up with the idea anyway and users will simply flock to it over your networks. Content really is king – you either have it, or you haven’t.