With vast investments currently being made by altnets on Fibre rollout, Peer Hackman, Managing Director, Telecommunication, Media & Technology at Webhelp looks at why CX differentiation will be key in the competitive UK “Gigabit” market

 

Waking up to the sound of loud drilling and excavators digging up the street is rarely a pleasant experience, but when this happened to me last week, I was happy to learn that the crew from G.Network had arrived to bring full-fibre broadband to the area.

Considering I live a stone’s throw from Google’s new King’s Cross head office and trendy Coal Drops Yard, it is somewhat disconcerting that we’ve been making do with copper delivering about 6 Mbps for the last 15 years. In fact, just one week before G.Network’s arrival, I’d switched to Virgin, hoping to prevent yet another video conferencing disaster.

Having worked in the telecommunications industry for years, I’m thrilled to see that the altnet boom is happening on our doorsteps. Still, is this a short-lived scramble for market share or a disruptive force that will push incumbent providers to compete on a new level? And what can altnets do to extend their longevity in the market?

The altnet push for market share

As they compete directly with only two incumbents, BT Openreach and Virgin Media, alternative networks (altnets) are spending vast amounts of money to claim their slice of the UK’s increasingly competitive “Gigabit” broadband connectivity market.

Whilst relative minnows compared to established players, alternative operators are fuelling growth and account for 57% of homes passed on a Europe-wide basis. UK FTTx altnets are also projected to reach almost 30 million UK homes by 2025, according to the sector’s trade body INCA.

Fibre rollout is accelerating fast, with investment from Openreach, Virgin, altnet providers, and their financial backers likely to exceed £30 billion by 2025. Still, there are significant challenges for independent network operators in their roles as network builders, wholesale vendors, and ISPs.

Challenges for altnets

New entrants to the UK broadband market have to deal with multiple hurdles like future market consolidation and price erosion, overbuild by incumbents, limited access to skilled labour, and the acquisition of land access rights. However, perhaps the biggest obstacle to their commercial success is creating awareness, generating high user satisfaction, and providing positive, differentiating customer experiences for their services.

OFCOM’s 2021 survey of UK broadband ISPs found that consumer broadband satisfaction rates have dropped by as much as 11% for some of the leading providers over the last five years. The COVID-19 challenge was a significant driver of these results. As such, altnet providers can pick up churn from Openreach, its partner ISPs, and Virgin, but “new” customer acquisition will be difficult.

Other issues altnet providers will face include service installation logistics, sourcing and set up for CPE (Customer Premises Equipment, such as routers), customer onboarding, high support requirements through surveying, frequently rescheduled installation appointments, and support over live and assisted channels.

All these factors—combined with Openreach and Virgin’s potentially aggressive wholesale pricing—negatively impact the business case and OPEX profile for altnets whilst affecting new ISPs’ and resale partners’ ability to provide superior customer experiences as competitive differentiators.

Strategies for tackling CX challenges

Assuming that altnet providers can overcome some of the supply-side and demand generation issues, here at Webhelp, we see three areas in particular in need of attention to ensure a best-in-class customer experience.

  • Ensuring reliable, consistent and resilient network QoS (Quality of Service) and QoE (Quality of Experience) after COVID-19 bottlenecks.
  • Better designed services, customer/employee journeys, and touchpoints to provide understanding, confidence, trust, and the ability (by the customer or the provider) to rapidly solve issues across the customer lifecycle.
  • Orchestration of support and engagement to deliver simple, straightforward, and easy-to-find omnichannel customer engagement pathways with first-touchpoint resolution and elimination of multiple handovers.

Let’s add some context to each of these areas and explore them in more detail.

Quality of Experience

With demand levels higher and reliance on TMT services increasing after COVID-19, broadband quality and consistency are top-of-mind when customers make their purchase decisions.

Additionally, as more digital and smart-home services that require resilient connectivity gain traction, providers must track both QoS and QoE and address them on a per-customer, per-service level. This approach can help altnets avoid costly customer service calls and truck rolls or prevent angry customer tweets, which can damage net promoter score (NPS) and word-of-mouth reputation.

To monetise the customer experience, avoid churn, and grow Customer Lifetime Value (CLV), altnet providers must focus on CX metrics, engagement tracking, as well as network KPIs whilst detecting and proactively addressing disconnections, slow response times, frame freezing, and similar issues. Analytics, AI, and customer education can help locate and predict poor QoE, whilst root cause analysis and rectification tracing can help address complaints related to network issues in the home (which is by far the majority).

Backup connectivity options are a positive interim step and may accelerate the growth of 5G FWA as the primary broadband household connection in the future. Still, it could threaten the profitability of fixed infrastructure investments unless providers can clearly articulate related use cases.

Customer journey/experience design and implementation

Once altnet providers have created demand amongst future paying customers—or RGUs as they’re known in the industry—it is crucial to design and implement customer journeys that enhance the frontend, omnichannel experience whilst seamlessly integrating with backend systems, including all relevant OSS & BSS business processes and components.

It is essential to involve customers at the beginning of this design process and throughout, as their input enables providers to improve complex processes, find new value streams, and enhance customer experience and product use.

Initiatives like customer-centric journey analysis, design and re-engineering, test and learn, and best-practice implementation frameworks (e.g. TMForum) can help take the sting out of service launches whilst enabling customers to become more capable of interacting digitally with websites and apps, setting up services, and solving issues themselves, ultimately keeping them happy and profitable.

Orchestrate digital and assisted customer support

Whilst most operators have been pushing for a digital-first approach to customer engagement, around 50% of consumers in all categories still state that “telephoning the call centre is the preferred contact method, regardless of query type”, according to a survey from EY.

The dichotomy here is that several customer segments would happily interact with apps or chatbots as long as a live advisor is available when required. However, voice support is up to 30 times more expensive than digital channels, so altnet providers must find the right balance between channel interactions to acquire, retain, and grow their customer base to more profitable levels.

To achieve better commercial and customer engagement outcomes at lower costs, operators must implement a flexible, scalable, and holistic support ecosystem that delivers exceptional experiences through all preferred customer interaction channels. However, getting there requires an understanding of the business’s current digital maturity and its prospective and existing customers.

Wrapping Up

Altnet providers have introduced momentum into a market that had been relatively static in the past. With government support through Project Gigabit injecting an additional £5 billion to support operators as they roll out across the final 20% of rural premises, growth of the sector is all but assured. However, competition will be tough for altnets, and consolidation is inevitable.

By offering “brilliant basics” that are easy to communicate and simple for customers to understand, along with resilient service performance, and straightforward sales, onboarding, and support journeys, altnet providers can almost certainly find success in the UK market.

Once my current contract has expired in 2023, I, for one, am eagerly looking forward to trying a new Gigabit, 100% full-fibre broadband service provider, having hopefully helped some of them to deliver outstanding customer experience and to grow successfully.