Stephen Warburton, managing director and member of the executive committee at broadband provider Zen Internet, discusses the opportunities that lie ahead for the channel.
What really stood out the most from an industry perspective last year was the surge in the internet consumption of our customers, and in turn, the increase in traffic on our network. Following the dynamics of Moore’s Law, a surge in traffic, year on year is to be expected – we typically see our network grow by circa 20 to 30 per cent annually.
What we actually experienced in 2020 was significantly higher with a 72 per cent surge! While much of this was driven by Covid-19 we are also seeing the continuation of a trend with consumers doing so much more online each year.
The majority of providers were ready for this increase in usage, although some have found it more challenging. Fortunately we were well positioned to absorb it thanks to how we run our network coupled with our network investment programme which was already in flight when the pandemic struck.
Embracing irreversible trends
The move to remote working is a big step change that has signalled an irreversible trend. Moving forward employers will be expected to support a balance of office and home working to attract and retain their most valuable asset, their people. Another change, that I don’t think will be easily reversed, is the accelerating shift to online shopping. Consumers are now accustomed to ordering their commodities and trying them out in the comfort of their home. All these activities need to be underpinned by reliable connectivity.
The other significant shift from last year was the massive change that came about in customer expectations. What that means for our sector is that tolerance for down time has lowered considerably thanks to the shift to remote working and a dependency on a fast, reliable connection. Levels of expectation are now different with consumers and businesses seeking out a provider they can trust. The impact of downtime or unreliable performance is very significant, people simply cannot go about their daily lives without a reliable connection.
Meeting these expectations and delivering a great customer experience will be one of the most important challenges for the channel this decade.
Ultrafast or FTTP connectivity presents a tremendous opportunity for the channel. There are 26 million broadband lines in the UK and in five years’ time we are going to have about 20 million of those that could go to full fibre. This is a massive sector change comparable to when broadband launched back in 2000 and when FTTC was introduced five or six years later. This is the next big shift from a technology point of view. There’s a relatively small number of providers promoting ultrafast today so the opportunity for the channel to go out there and grab market share now is enormous.
And it’s not just about the opportunity, but the risk of getting left behind. June 2021 marks the start of the stop sell of copper services in 117 exchanges and with a further 51 exchanges recently announced, there are 1.8m premises which will only be able to be provided with FTTP or SoGEA. There is a significant risk the channel will underestimate this change. We are working closely with our partners to make sure they are well prepared.
To put this into context – we are seeing FTTP customers stick with us for an average of 6.5 years, whereas the average tenure of ADSL or FTTC customers is more like 2.5 years. Once installed, full fibre is very reliable and you get great performance, simply put, it just works. So why would you then shift supplier? This is certainly going to result in a reduction in the switchers market.
Most of us have experienced connectivity challenges over Covid-19 with buffering video, poor voice quality, the dreaded spinning wheel, people dropping out of Zoom or Teams calls, but full fibre addresses these challenges. Any channel player not ready to offer this from the outset risks losing customers for a very long time.
The other great thing about full fibre that the channel can really get behind is that it can be a catalyst for offering other services and growing business via your installed base. Winning the connectivity business invariably opens other opportunities around telephony, the cloud and security and this is where the channel can really add value. The channel plays a key role in stitching all of the IT together presenting immense opportunity for those willing.
Is your partner provider ready to help you ride this next technological wave?
Originally reported on Comms Business.