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Why being different will matter in the FTTC world – Guest Editorial

Tuesday, Apr 2nd, 2013 (1:02 am) - Score 882

Widespread availability of up to 80Mbps capable FTTC (VDSL) based superfast broadband products will bring “major opportunities” to carriers and ISPs, says Jeff Pitt, Key Account Manager on the Service Provider Group for the UK and Ireland at ZyXEL Communications (Guest Editorial for ISPreview.co.uk).

Those of us who live in areas that are being fibre-enabled by Openreach, can hardly have failed to notice the stickers on roadside cabinets telling us that ‘fibre is here’. Well, yes it is – up to a point. It’s steadily being rolled out in many areas of the country, and in those areas, BT can certainly offer you one of its Infinity services, but only a few select others can offer any kind of fibre-based service for now at least.

Until more exchanges and cabinets are enabled, and Openreach makes the pricing structure more attractive, it will be difficult for ISPs to justify offering higher-speed VDSL services anyway. But when the point of critical mass is reached, and the infrastructure is made accessible for just about every ISP, the market will get very competitive, very quickly indeed.

There will be a mad rush for market share, just as there always is when a new grade of service becomes available. We saw it with 8Mbps broadband and we saw it with ADSL2+. With VDSL, it’s going to be even more competitive because really, if ISPs do not sign up customers now, it may be some time before they get another chance. But ISPs have a problem. Even when they can offer a straight-forward FTTC connection, they will face massive competition from the many other providers that make the commitment and enter the market early.

Premium service

For a while, it is probable that all these providers will try to sell their services at a premium, to maximise the potential margin. But that won’t last. Sooner rather than later, one or more of these ISP will start to try and undercut the competition and the inevitable will happen; prices for undifferentiated VDSL offerings will be driven downwards.

It won’t be easy, even for ISPs that are not interested in price-warring and will be satisfied with a small (and hopefully profitable) share of the VDSL market, to set themselves apart. We’ve seen that very clearly in the broadband market over the past decade. But ISPs that take a focused approach and deliver the right combination of service levels, and hardware that is capable of supporting customers it is seeking to attract, do have a real chance of standing out from the crowd.

In certain markets – hospitality for example, while the higher bandwidth that VDSL brings is going to be most welcome, there will also be a need to ensure that the CPE is able to make the most of that extra capability, and can provide the functionality, flexibility, reliability and secure connectivity that customers are going to need. In hotels, health clubs and cafes it’s now becoming absolutely vital to provide good wireless connectivity. This means having a gateway or router that can cope and, in most cases, a wireless controller, numerous access points and a security appliance as well.

Hospitality is just one example of an industry where this is now the reality – but there are many others, all of them with differing needs; education and the wider public sector, train and bus services and retail, for example. Even in the broad business market, there will be groups with specific requirements – legal firms and accountancy practices, construction, companies that have large numbers of temporary staff or high turnover.

Right combination

We’ve seen more ISPs doing this already with ADSL2+ services. Some have been extremely clever, offering services that, for example, allow customers to crank up their bandwidth at peak times but benefit from a lower monthly subscription than they have to pay for the higher bandwidth, which most of the time they won’t use. We have also seen ISPs offering a choice of routers and gateways that will, for example, enable them to offer extended wireless coverage, a built-in controller that can cope with managing large numbers of associations (important when you have a lot of people coming and going on the wireless network), or a built-in firewall.

When given the choice, customers often take up these options as they are much better-suited to their particular needs. Making your value proposition stand out amongst the crowd of ISPs offering low-cost options – but it’s possible and with VDSL, there will be more potential to offer services and hardware options that are tailored to the needs of specific customer groups. ISPs that target a specific market with VDSL services and ensure they can provide a combination of service level guarantees, and hardware that has the right capabilities, can win.

Jeff Pitt

(Ends)

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Jeff is the Key Account Manager on the Service Provider Group for the United Kingdom and Ireland at ZyXEL Communications (effective 2012). He is writting for ISPreview.co.uk in the capacity of a guest author.
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