Competition and applications

Competition for broadband Internet customers will get tougher, as increasing numbers of providers try to position themselves in this lucrative market. At the same time, customers will grow more and more demanding. How can providers succeed in such a difficult competitive environment? The answer is simple: differentiation.

In this context the experts see quality leadership as a key factor for successful differentiation from the competition (Fig. 10). Other critical factors in the convergent broadband Internet market were identified by the survey subjects as service leadership (around 60 percent) and the provision of innovative broadband Internet products (around 57 percent).

Fig. 10:		Success factors for competitive differentiation in the convergent broadband market (Broadband economy experts)

Along with an innovative, high-capacity network infrastructure, broadband Internet quality is the main success factor for long-term positioning as a broadband Internet provider on the German market. When asked about success factors for the broadband provider market, almost 90 percent of experts rated the importance of network infrastructure quality as “high” or “very high.” Quality, in the form of fast and consistent download speeds, is also an essential requirement for the use of innovative broadband Internet applications, which are in turn seen as drivers of high-performance combined product packages.

But there is another crucial question to be asked about such innovative applications, i.e. what will they be running on? Will information and messages harmonize on different terminal devices? Will appointments and notes be correctly synchronized? Our main focus here is therefore on integrated applications, particularly integrated “Internet from anywhere” access and services (IP Anywhere), which represent an important element of convergent broadband use.

Over 76 percent of the experts rated integrated personal information services as a key driver of combined broadband Internet products (Fig. 11). And over two-thirds of the experts also gave a “high” or “very high” importance rating to providing fixed and mobile information to the user, as well as to integrated communication applications.

Fig. 11:		Importance of integrated IP Anywhere applications for combined broadband offerings (Broadband economy experts)

Consumers agreed, with around 60 percent of them placing a high priority on integrated communication applications, i.e. fixed and mobile reachability under the same phone number. Fifty percent of consumers identified integrated personal information manager applications and mobile and fixed access to information as being particularly important to them (Fig. 12).

Fig. 12:		Appeal of integrated broadband Internet applications (Consumers)

In summary: the focus is on the customer, and any broadband Internet provider hoping to compete successfully will have to give more consideration to the customer’s concerns. Important factors identified here are combined broadband Internet offerings , e.g. quadruple play, and innovative broadband Internet applications such as IP Anywhere.

In the area of content applications, experts rate entertainment products such as music on demand and IPTV as especially important to the future growth and penetration of combined and integrated quadruple play packages. They also see video telephony and video on demand becoming more important in future (Fig. 13).

Fig. 13:		Drivers for the penetration of quadruple-play packages (Broadband experts)

Another major success factor will involve the charging models for broadband Internet products and services. The experts were quite clear on this point, with around 97 percent expecting a flat rate model to be the most successful charging model for combined innovative broadband Internet services. All other billing options were rated as significantly less attractive (Fig. 14).

Fig. 14:		Charging models for quadruple-play services (Broadband economy experts)

The customer expects something special which clearly differentiates itself from the offerings of other providers. So, what exactly does the broadband consumer want? This will be considered in the next chapter.