Broadband providers eye value-added services revenue

Broadband providers eye value-added services revenue

Summary: Saturation of fixed-line broadband market prompts operators to turn to value-added services for revenue growth, but market watchers note they also need to understand their network usage to provide better user experience.

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COMMUNICASIA, SINGAPORE--Value-added services are the next frontier for fixed-line broadband providers amid intensifying market competition, but they need to also understand how users use their networks to deliver better user experience, say market watchers.

Oliver Johnson, CEO of research firm Point Topic, said the sale of broadband connectivity has become a wholesale business for broadband operators as the growth potential for these consumer-targeted service providers has shifted to consumer value-added broadband services, which is expected to surpass broadband connectivity revenues for telcos in 2018.

Value-added services currently provided by operators include IPTV, VoIP (voice over Internet Protocol), surveillance, cloud services, games, home network, music and teleworking, Johnson said during his presentation here Thursday at the annual ICT tradeshow.

Besides the cost of providing such services, another challenge for operators is competition from over-the-top service providers which have customer appeal. For example, VoIP service Skype made up about 25 percent of the world's international long-distance calls, he said.

Malaysian broadband provider, TM Net, is one operator that has turned to providing video-on-demand as part of its value-added services. During his presentation, Jeremy Kung, executive vice president and CEO of TM Net at Telekom Malaysia, said the companyoffers a packaged video-on-demand service, called Hypp TV, along with its high-speed broadband service.

On average, a subscriber would purchase 2 to 3 movies--each priced at RM8 (US$2.50)--each month, said Kung. Customers started buying more videos after overcoming the initial reluctance to pay for content, he added.

"People are willing to pay [for content] if the price is right," Kung added.

Network analytics important for good user experience
In a separate session at CommunicAsia, Ivan Evans, senior vice president for Asia-Pacific at Sandvine, said fixed-line broadband operators need to "measure anything, know everything" to ensure a good user experience.

Currently, most decisions made by operators are based on oudated data, Evans said. By collecting real-time data using deep-packet inspection, operators will be better able to understand what is happening on their network and make decisions on what to do next, he said.

Real-time network analytics is important especially with the rise of over-the-top video services, he said. In Asia-Pacific, videos are driving the traffic of fixed-line broadband as well as mobile broadband usage, he added.

When delivering video, the most important step for the operator is to understand the quality of user experience of the OTT service, he said.

Many factors will impact user experience, some of which are under the control of the operator while others are not, Evans said. The quality of videos provided by the content delivery network can vary but consumers will attribute bad user experience to the operator, he added.

Without proper understanding of the network traffic, operators will not know what went wrong, he said. To understand their network, Evans said operators need the correct tools for measuring, reporting, analyzing and policy control.

Topics: CommunicAsia, Broadband

Liau Yun Qing

About Liau Yun Qing

The only journalist in the team without a Western name, Yun Qing hails from the mountainy Malaysian state, Sabah. She currently covers the hardware and networking beats, as well as everything else that falls into her lap, at ZDNet Asia. Her RSS feed includes tech news sites and most of the Cheezburger network. She is also a cheapskate masquerading as a group-buying addict.

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