Not all Bytes are the Same: Focusing on Value not Speed
Increasing Telco profitability by enhancing user experience.
The "Value-Per-GB" report presents a paradigm shift for communications service providers by advocating a move away from traditional metrics like speed and volume towards a value-based approach. Key points include:
Shifting Priorities in Broadband: Telcos have historically invested in expanding coverage, speed, and traffic volumes, leading to commoditisation and low returns on investment. The report suggests a strategic shift towards optimizing networks for high-value applications, aligning service pricing with value and user experience.
Value-Per-GB Analysis: The study examines five major application categories - subscription video, free video, social media, conferencing, and gaming. It reveals that gaming is significantly more valuable per GB than other categories, 167 times more valuable than subscription video and 42 times more than social media.
Implications for Telcos: This shift in focus offers an immediate opportunity for telcos to increase profits. By deprioritising speed, which benefits low-value applications, and focusing on enhancing user experience for high-value applications like gaming, telcos can improve customer satisfaction and loyalty. This also opens up revenue opportunities from premium services.
Recommendations for Telcos:
Optimise for High-Value Applications: Network engineering should prioritize metrics like latency, jitter, and loss that impact high-value applications.
Monitor Experience and Engage Users: Demonstrating superior network tuning and engaging with users to rectify experience issues can increase brand value, customer retention, and revenues.
Create Premium Offerings: There's potential for new premium services in areas like gaming and the Metaverse, offering opportunities for partnerships and revenue models aligned with value rather than volume.
The report underscores the need for telcos to rethink their strategies, focusing on application value and user experience to make broadband more profitable in the digital era.
