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end of 2007 and 2012. Digital Home Canada reported a 73% increase in cable telephony subscribers in 2007 alone.
The Edge:
There are certainly edges on both sides of the conflict. Phone companies are, historically, quite good at handling money. From charging to rating to billing, telcos are among the best in the world at making sure services are charged for and payments are handled. That's an obvious benefit.
Many telcos are also doing more with fiber-to-the-home (FTTH), which technically is available to cablecos, too, but the main adoption has been among the telcos. With FTTH in place, telcos are in a good position to offer cutting edge services at very high speeds. With the amount of bandwidth chewed through by video services, this is a must.
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No cable company included in the survey received top ratings in any of the six areas. |
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in customer satisfaction, but neither is particularly loved by consumers. Telcos boast a 54% preference over the 44% preference sported by cable companies. Granted, this doesn't make telcos a knockout favorite so much as a less problematic provider, but it does indicate that there is a significant difference in customer satisfaction between the two.
Another problem is that the cable companies still seem to be learning on the job, to one extent or another. Telcos have a significant history of research and operations that the cable companies simply don't have. I'm sure that they will, eventually. “Eventually,” however, may not be soon enough.
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Then there's the enterprise market. Telcos are guilty of often ignoring the unflashy, unsexy enterprise market in favor of the consumer side, even though enterprise is responsible for the majority of revenue for most telcos. That market share can enable telcos to weather numerous storms. It's the reliable, if somewhat geeky, sugar daddy to an industry that seems hell bent on going after the wild child that is the consumer market. That's a benefit the cable companies don't necessarily have... yet.
The downside of the telco model is obviously limited bandwidth on existing networks. If that wasn't the case, FTTH would be unnecessary.
And the cablecos? They already have a nice solid delivery platform for video. That's what they do. They're already good at the hard part. VoIP is comparatively easy to wield these days, so they're all set. So where are the problems?
Well, one is customer care. The trials and tribulations associated with customer care in the cable space have been well documented, not only in publications such as this one, but in the mainstream media, on YouTube, and on countless blogs. Granted, complaining about one's service provider seems to be one of the reasons blogs were invented, but there does seem to be an extra dose of contempt for cable providers. A 2007 study by CFI Group indicates that telcos edge cable
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The Stakes:
At this point, it looks like cable's game to lose. It's fast, reliable, and generally available to most people who are willing to pay for it. If the cablecos could start paying a little more attention to overall QoS and double down on customer care, they'd be in good shape.
Ultimately, however, we're prepared to say that FTTH is the possible savior of the telco. Now that cablecos have VoIP figured out and rolled out, telcos are in the hot seat. FiOS seems to be pleasing customers, and Verizon isn't the only FTTH show in town. The more of those pipes telcos can roll out to the end consumer, the closer they come to winning the race. Fiber rollouts, however, are painfully time consuming. The old fable of the tortoise and the hare comes to mind, but slow and steady doesn't always win the race. In fact, as much as I hate to blow holes in Aesop's theses, fast and erratic wins the race a lot.
The stakes are changing. Though every SP rails against the possibility of becoming a dumb bitpipe, there is a benefit involved in being the best dumb bitpipe. If third parties are going to deliver the applications that consumers really want, it matters even less than ever what access technology delivers the service. In that sense, it's almost a race toward willing servitude. Then again, I suppose it's better to serve in heaven than to reign in hell.
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