FTTx is not “DSL Sales Reloaded”
Strategic Options for the Marketing of FTTx
Unlike DSL, which could be installed as an upgrade of an existing network already in place, the creation of an optical fiber network is an even more strategic challenge for network operators. On the one hand, the infrastructure measures must be in line with commercial opportunities; on the other hand, a complex marketing campaign ahead of the decision to expand the network is unavoidable. Detecon describes ways to strategically solve this dilemma in FTTx marketing.
DSL has been available since 1999, and there was no competition in sight when it first appeared. Compared to today’s situation in broadband business, it was bound to be a success. No competitors, no alternative broadband technologies, installation based on the telephone network, and little regulation – providers were able to start in the most lucrative regions, and customers were literally breaking down doors to get DSL services.
The only thing still remaining for the future of broadband is the high demand among customers. The increasing utilization of Triple Play products with applications requiring high bandwidth capacities such as IPTV or video streaming and subsidy programs aimed specifically at extending broadband service to rural areas are driving forward the expansion of “Next Generation Access” (NGA) networks. NGA technologies such as DOCSIS, LTE, or WiMAX are alternative possibilities to optical fiber networks. This study focuses especially on the expansion of the Internet deploying optical fiber technology, an approach gaining in significance in many countries and, more and more, in Europe as well. Making the right decisions is especially important for telecommunications providers during this start-up phase.
The high investment costs and demanding requirements for wide-area expansion leave network operators no choice but to come up with efficient sales strategies. They simply must answer the key questions correctly if they want to be profitable in the long run:
When? The chronological prioritization
Where? The regional prioritization
Who? The right customer segmentation
What? The technology architecture
How? The selection of the distribution media and channels
When and Where? – The Regional and Chronological Prioritization
Population density and the competitive situation, in addition to the widely varying investment costs from one region to the next, are key variables influencing an expansion strategy. Four different expansion clusters based on regions can be derived from them (see Figure 1):
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