The second of two reports from strategic consultancy firm Eight Advisory has today been published, which proposes a list of “actionable recommendations” for how alternative full fibre (FTTP) broadband networks (Altnet) and their ISP partners can boost customer take-up to reach their commercial and financial objectives.
The first report, which we covered earlier this month (here), focused more on setting out the current market situation, the impact of consolidation and examining why Openreach has been able to dominate Altnets for take-up. For example, some 34% of those covered by Openreach’s FTTP have adopted the service, which compares with only around 16% for Altnets (the latter ranges from 5% to 30%, based partly on network maturity).
However, the original report didn’t contain much in the way of surprises for ISPreview’s regular readers, while the new report is more focused on providing “valuable insights and actionable recommendations” to support Altnets in achieving their commercial and financial objectives (i.e. driving penetration).
Once again, the new report and its recommendations reflect a fairly generalised / high-level view of this topic, albeit one that some people might find useful.
Key Recommendations for Altnets (simplified summary)
➤ Start engagement with stakeholders and residents long before the build starts. Preregister interest and keep residents informed of progress.
➤ Have a strong retail proposition – brand, product options, competitive price points and added value which sets your offer apart from large ISPs.
➤ Measure, improve, refine and simplify the go-to-market approach as you understand what works to maximise take-up and reduce cost per acquisition.
➤ Consistency in marketing effort across the whole footprint over time will pick up referrals and customers as they come out of contract.
➤ Ensure all homes are sellable or there is a plan to make them sellable as quickly as possible.
➤ Consider how opening your network to wholesale may further drive penetration, deter others from overbuilding and reduce churn impact.
The full report fleshes out each of the above points in more detail, although to be fair we do see that the majority (if not all) Altnets are already doing most or all of the things being recommended above. In that sense, there aren’t too many surprises to be had, although it should be noted that some decisions (to go wholesale or not) can be complex, depending upon your market focus and strategy (wholesale isn’t a panacea).
Chris Stening, Report co-author and Senior Advisor, said:
“Driving penetration & takeup is one of the number one goals of UK Altnets. We covered our expected market changes at Retail & Wholesale level in part one but while that plays out there is much they can do to drive penetration, profitability and future enterprise value.”
At this point we think that Eight Advisory might have done well to add a consumer survey to their report, which could have been used to lend some support to their points, while also showing how consumers respond to Altnets in areas where several operators are now competing. But this is perhaps something to think about for a future report.
Otherwise, we know from our readership that none of the above matters if the network isn’t available to them in the first place, which is always the first obstacle to overcome. One issue that comes up a lot relates to how most Altnets do pre-market their work (leaflets, door2door etc.) and will collect pre-registrations. But where some fall short is in the ability to then deliver what they’ve promised, ideally on-time or by keeping interested customers proactively updated when plans change (i.e. telling people on a street the new network is “coming soon..” and then leaving them hanging for 12-24 months can damage already fragile reputations).
Admittedly, building a new network is fraught with potentially delay causing obstacles, which can make finding a happy balance between early marketing and actual service availability very difficult. But getting this right could pay dividends as it helps to build credibility in the brand, which in many cases will involve retail broadband ISPs that locals may not have heard of before and will thus illicit a lower level of trust.
In addition, we’re often surprised by how some Altnets don’t focus their marketing on more of the elements that set them apart as superior vs incumbents, such as in terms of upload speeds, router capabilities, WiFi performance or other features that many of the biggest players may struggle to match at the same price point.
Finally, the previous GigaTAG report also did a modest job of highlighting areas that need improvement to help boost take-up, some of which are now in the process of being implemented.