Brought to You By

By Carl Davies, Head of Global Solutions Marketing for Cable, Broadband and Satellite

When policymakers deregulated the telecommunications industry, many looked to the cable industry to serve as the primary source of new competition providing choice, savings and innovation to customers. Cable companies did not disappoint them.

Cable MSOs quickly rolled out high-speed Internet access services, entered the voice market with VoIP and were among the first to offer quadruple play via wireless MVNO ventures. The cable industry's rapid expansion was made possible, in large part, by its commitment to network investment. In just one country – the U.S. – during the first decade of the 21st century, the cable industry has invested more than $129 billion in broadband networks to serve hundreds of millions of residential customers.

While these are proud accomplishments for the cable industry, they also point to a problem. After half a century, the cable industry still is almost exclusively focused on one marketplace, drawing 90-95 percent of revenue from consumers.

Today, cable companies face a very different world from just a decade ago. Their once unassailable dominance of the residential marketplace is being challenged successfully by telco TV and over-the-top (OTT) competitors. Shareholders are demanding that cable companies do more with their broadband investment – find better ways to manage and monetize bandwidth, and demonstrate creativity in exploiting new niches in Wi-Fi, wireless backhaul and interactive advertising.

Most significantly, cable companies are feeling pressure to break out of the residential mold and diversify into the commercial customer arena now dominated by telecom companies.

Cable operators have the bandwidth to make the leap to commercial, but whether they have the operational strength and flexibility is a separate issue. MSOs' current challenges in branching into the commercial marketplace directly stem from reliance on legacy BSS designed to serve the needs of consumers in a simpler era. To succeed in the commercial arena, cable companies must step up and embrace advanced BSS solutions in tune with the needs of that market niche.

Unique Challenges of the Commercial Market
In a recent survey of senior management from many of the world's largest cable companies, Convergys found that the challenge of succeeding in the commercial arena is an industry-wide problem for MSOs. Most cable leaders readily concur that the commercial market under-contributes to revenue, accounting for 10 percent of revenue or less.

They also agree on the reasons for underperformance in this important niche. Too often, cable companies cannot meet the complex demands of commercial customers:

• Billing that is easy to understand;
• The ability to handle complex bundled service offerings;
• Self-management tools, self-service options, analytical readouts;
• Flexibility to customize billing details;
• Custom billing across multiple sites and geographic zones;
• Support for complex service level agreements (SLAs).

Worse still, cable operators cited shortcomings in the very areas that enterprises consider essential. For example, the cable industry's trouble spots in just one area – billing – unfortunately show a perfect match with key 'must haves' of the enterprise customer:

• Providing flexible billing with varying terms of payment;
• Resolving customer billing issues quickly and efficiently;
• Ensuring billing accuracy;
• Aligning billing with an enterprise's corporate structure;
• Managing promotions or providing personalized bundles of services at different sites.

This misalignment of operator capability and customer need stems directly from the cable sector's continuing reliance on older BSS systems. Such a mismatch typically translates to 'No Sale.'

If a single factor stands out in cable's low penetration of the high-end commercial market, it is the disconnect between what customers want and what cable's legacy BSS can deliver.

Upgrading the Back Office for the Commercial Market
Cable companies need to adopt a new approach to BSS that positions them to win more commercial accounts. It is not necessary for cable companies to rip and replace existing systems or undergo a forklift upgrade. All that's needed are efforts to reenergize and improve performance through the addition of sophisticated BSS components.

Newer, more advanced BSS solutions are available that can help cable operators deliver exactly what commercial customers, including large enterprises, demand and expect:

• Service Level Agreements – flexible to support the needs of each commercial customer;
• Simple, convergent billing – easy to understand invoicing that consolidates sophisticated service bundles in one invoice;
• Hierarchical Treatment – letting each user define an organizational invoicing arrangement at the corporate, division, local and individual level;
• Discounting – The application of discounts and sharing of minutes across the enterprise account.

Cable companies can move toward meeting these needs in incremental phases and complete the deployment over time, or alternately, use a managed solution. Whatever the approach, strengthening the back office is essential to future growth. Once they 'step up' to advanced BSS solutions, cable companies will find long-elusive commercial market revenue within easy reach.

Convergys Survey of Cable Leadership
Convergys' research discovered:

• 8 out of 10 cable leaders' companies experienced residential market attrition in 2010.
• 9 out of 10 attributed the decline to factors other than the economy.
• Poor service was a lead factor, and cable companies said they are committed to improving the service experience.
• Few see the need to attack the service problem at its core – billing and CRM functions tied to the BSS.
• Most fault legacy BSS for their companies' inability to pursue new commercial customers.

To learn more, click here or email us at cable@convergys.com.

Carl Davies is Head of Global Solution Marketing for Cable, Broadband and Satellite at Convergys.