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Telcos count the cost of providing quality TV services

Providing TV services is a complicated business, and telecoms operators taking the plunge into the television space must be careful that that complexity does not have a knock-on effect when it comes to quality of experience for the customer.

A panel session on customer satisfaction in IPTV at IP&TV Forum in London on Tuesday sent a clear message: telecoms operators are used to ensuring quality in their networks, but service quality is very different from network quality. And, as session leader Tony Brown, principal analyst at Informa Telecoms & Media, pointed out, “the customers' willingness to compromise on quality is very, very low.”

Marc Lirette, who works in the technology strategy department at Canada's Telus, explained that the unreliable nature of video and related quality issues is the biggest problem facing his company in the IPTV space. The loss of just one packet can cause an interruption of two or three seconds in viewing, he said, while the same loss would be barely noticeable in a voice connection. And customers expect a better quality of service than that.

For incumbent operator P&T Luxembourg, its status as the legacy operator compounds the problem.

Consumers are used to the telco's voice and data services being reliable, said Cliff Konsbruck, head of Internet services at P&T Luxembourg. But in the TV environment, “lots of issues come from the access and the home networking part,” he said.

To get around that problem, P&T Luxembourg has made Ethernet-based home networking its cheapest option, since it is more reliable than power grid and wireless alternatives. It also sends technicians to install set-top boxes rather than offering self-install options, because the lower volume of calls to the helpdesk works out cheaper in the long run.

Indeed, in addition to the potential brand damage a telco could suffer as a result of a below-par TV offering, there is also a huge cost associated with solving customers' quality issues.

Curtis Howe, president and CEO of IPTV monitoring software provider Mariner, warned telcos of the danger of “burning profitability” from the outset if IPTV customers end up calling for help.

“Up to 30% of all new installations require essentially a [second] new installation,” said Howe, which could cost the operator anywhere between €100 and €450 per customer.

Getting the service right from the very beginning is key, agreed Ioannis Antoniadis, IPTV technical director at Romania's Romtelecom. His company has discovered that if the installation is carried out correctly, customers usually don't experience problems with their service “for a very long time”, he said.

Like P&T Luxembourg's Konsbruck, Antoniadis favours technician-installed IPTV over the DIY approach; with the latter, “things do not run as smoothly,” he said.

He also pointed out that, in Romania at least, having an engineer go to a customer's house to install the set-top box is only slightly more expensive – the difference being €3-€4 - than sending a courier to deliver a box for self-installation.

“It is worth the effort to avoid the truck rolls later on,” he said.

The numbers are relatively simple, said Mikael Dahlgren, CEO of Agama Technologies, which provides monitoring and quality assurance solutions for operators. If a company has 200,000 TV customers and 10% of those make two helpdesk calls per year at a cost to the operator of around €10 per call, that's €400,000 per year, he said. And if the helpdesk cannot solve the problem, leading to a technician being sent out – i.e. a truck roll - “you could have figures like €100 for each of those”, he added.

Those sorts of figures could explain why not all telecoms operators are keen to send in the experts.

“We want customers to solve their problems by themselves,” said David Murargi of Portugal Telecom's wireline operations division. “We don't want to spend millions to solve problems we already spent millions to have,” he joked.

Portugal Telecom's Meo-branded IPTV service has more than 830,000 customers, which potentially amounts to sizeable support costs. Telus has 250,000 customers, P&T Luxembourg 30,000 and Romtelecom, which only launched services last year, 33,000 customers.

Dutch incumbent KPN boasts a TV subscriber base of over 1 million, according to Marieke Overgaag, manager acquisition marketing at the company's Internet, Television and Telephony business.

“People want more from their TV than just higher quality,” said Overgaag, moving the discussion on operator challenges on a step.

She identified the telco's historic position as a voice telephony provider as a challenge to be overcome when entering the TV market. “We need to become a TV brand,” she said, explaining that KPN elected to ensure 80% of the Dutch market was able to receive IPTV services before it started marketing them.

KPN's strategy is to attract customers with one simple proposition that will appeal to them, like the benefits of being able to pause live TV, for example, then to upsell that customer to other elements of the service through individual marketing. “We will have more of the revenue with that user,” Overgaag said.

However, there are still challenges to be overcome, not least the reluctance on the part of consumers to switch pay-TV provider, and potentially broadband provider too.

“It's like [switching your] energy [provider], but even worse,” Overgaag said.

Источник: Total Telecom

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