Complacency has no place in IT

It was on April Fools' Day at the turn of the millennium that the Singapore telecommunications market was fully liberalized.

Key market players had begun ramping up activities a couple of years prior to the big launch date, and the industry was abuzz with excitement at the prospect of new innovative services that were expected to follow.

Deregulation was the name of the game in the early 2000s as other economies in the region kicked off their own journey toward market liberalization.

Fast forward nine years into the new century, unfortunately, it appears we may have come full circle in some pockets of the industry.

At a briefing last week, Gartner analyst To Chee Eng described how the telecommunication industry had evolved over the last 10 to 15 years, when much of the focus had been on deregulation. The market then grew fragmented, with a multitude of players, most of which resorted to pricing to be competitive. But, such tactics were obviously not sustainable, and this resulted in market consolidation.

Today, To said, what remains in the market are fewer but stronger players, with the financial muscle to invest in technology improvements, and hence, are better able to provide quality service.

The downside to that, however, is that complacency is starting to creep back, the analyst said. There's now a general reluctance to invest in new or unproven areas. The carriers like quick returns on investments, he explained, and they're wary of the fact that their shareholders cannot tolerate failures. Over time, there's a possibility that large players will become increasingly complacent because of diminishing competition, To said, but added that this is unlikely to happen in the near future as there is still some market competition.

I think some service providers are already showing signs of complacency. Take my cable TV operator, for instance, of which I've been a customer for more than a decade. It recently decided to discontinue several program packages in a move to "simplify our price plans". The irony was that these packages were actually already pretty straightforward, because I paid a flat fee for most of the channels my operator offered.

I mean, come on, let's just call a spade a spade. Market conditions are getting rough, your company needs to find ways to maintain its revenue, and the easiest--and quickest--way to do that is to have your customers dig deeper into their pockets. So, really, it's probably not about simplifying price plans at all.

There's no denying that the current business climate is bleak, and after enjoying years of robust growth, the ICT industry is now experiencing one of its toughest--if not, toughest--market environment.

It's about business survival, plain and simple. So I understand if some companies feel the need to implement price hikes to stabilize their bottom line. But, there should be a limit to how much more consumers should be made to pay. More importantly, companies shouldn't resort to price hikes as the only and easy way out.

As a result of my cable operator's efforts to "simplify" its price plans, I now have to fork out a whopping 50 percent more each month to view my family's favorite channels. The fee hike would have been at least 70 percent more if I wanted access to the same channels my previous program bundle included. On top of that, I now have to pay rental for my main digital set-top box, the charges for which were previously waived.

Probably in an attempt to appease customers angered by the hefty fee increase, my cable operator is offering a 30 percent discount for my monthly subscription. But, the discounts only apply if my subscription plan hits a minimum value--which is a significant amount--each month, and the discounts will end after a year.

Obviously, I'm not a happy camper. Unfortunately, I can't demonstrate my displeasure by switching providers because there isn't a comparable competitor. The only other satellite TV operator I can run to is still relatively new in the market, and sorely lacks the variety and types of programs it's able to offer. This is probably the result of exclusive deals my cable operator was able to ink with key content providers.

It's perhaps this recognition of the lack of competition that my cable operator felt confident enough to implement such hefty price hikes, without fearing any significant loss of customers.

True as that may be now, it would be extremely unfortunate if the company also fails to recognize that it cannot afford to rely only on pricing tactics to generate more revenue. The content market is still evolving, with many new and non-traditional players entering the scene and offering an array of innovative services in a bid to attract customers.

Making customers pay more may be the easiest way out, but it can't be the result of a company's laziness to find alternative solutions. Only serious market players recognize the need to focus their attention on innovation to remain competitive.

Complacency should never be afforded any part in the market.