Fast and furious: The battle for hearts and minds in broadband and mobile
As consumers and businesses demand more and more from their technology and the infrastructure that technology relies on is the battlefield in an arms race, a new war of words has broken out amongst providers.
The need for speed
As BT announces a £6bn investment over the next three years in “ultra-fast” broadband to up to 12 million premises, we’re reminded of the ever-swinging pendulum between content (the stuff we actually consume through technology – movies, sports, videoconferencing and the like) and the infrastructure that delivers it.
One moment infrastructure looks like a commodity, and content is king (remember BT’s £2bn splurge on football rights in the past 30 months). The next, that very content puts greater pressure on the infrastructure, making better performing kit – be it speed, memory, bandwidth, battery life – a differentiator once again.
And with renewed focus on infrastructure, competitive claims and counter-claims can become very technical in nature. Sky’s complaint that BT’s G.fast technology uses old copper wires rather than newer fibre optics contrasts with BT’s claim that they have achieved broadband speeds of greater than 5Gbps over copper lines in XG.fast trials.
But do users care? Clearly some consumers and business customers follow these debates with interest, but most do not. End users tend to be very outcome-focused when it comes to assessing product quality: does it work, is it fast enough, can I watch/hear/download what I want when I want it?
And at what cost?
Despite the eye-watering investment in both infrastructure and technology, the mid-to long-term price pressure across all technology markets seems to be relentlessly downwards. Increasingly, this drives consumer expectations and behaviours.
Rapid obsolescence (or at least replacement as “the next thing”) drives discounted pricing for end-of-line TVs and phones.
Data gets cheaper and cheaper with some commentators feeling that the only logical end point is “as much as you can eat, but for free”.
Bundling of content with infrastructure (as Sky, BT and Virgin all do) or phone with data plan (as the network providers do) distorts pricing perceptions further.
Many consumers have developed specific strategies in response to these realities: delaying purchase until the inevitable fall in hardware prices is one example; negotiating better network deals by threatened defection is another.
And downward price pressure is not just a consumer phenomenon: a recent conversation with a mobile base station provider confirmed they were providing better kit than they did five years ago, but at a fraction of the cost.
A battle of brands
So, how to unlock opportunity in this environment?
Providers need to be quick-witted to strike the appropriate balance between consistent brand building and being an audible voice in the changing day-to-day debates about technical specifications and customer value.
Beware short-term promotion-based strategies that rarely build sustainable advantage and often precipitate a race to the bottom. Justifying relative premiums through reliability and service can attract and maintain the very customers who can deliver long-term value.
Ultimately, a customer-centric strategy will be the only way to drive long term success: an approach that informs everything from branding and comms, pricing transparency and, perhaps as important as any, after-sales and customer service.
In a situation where infrastructure demands necessitate strong competition amongst few providers, brands should remember that with great market share comes great responsibility.
As a response to this, BT’s recent announcement of 1,000 additional engineers to improve customer service may be the best evidence yet that this is a responsibility BT has not forgotten.