With recent acceleration in European triple play rollouts the UK is becoming increasingly ripe for new margin streams. Market dynamics have been slow to accelerate until recently, but certain sectors are displaying promising signs. How the channel can build a case for triple play, build on existing infrastructure and maximize benefits to customers?
UK catching up with European adoption
A gap exists currently between UK and European triple play uptake, primarily due to a lack of competitive pressure in the market, allowing minimal investment in infrastructure. In the UK the market is moving very slowly – adoption of services such as voice over IP (VoIP) and IPTV is at a staggering 0.4 per cent compared to their French counterparts of which 5.4 per cent use VoIP and 1.6 per cent use IPTV. This has been most evident with poor pickup of next generation broadband for instance. The situation is changing however. Due to local loop unbundling and pricing movements, competition is increasing and this will hopefully allow the UK to catch up imminently.
There is also an education issue. Few people in the UK are aware that other European citizens have access to superior internet speeds, pricing and flexibility with their telephony offerings. That seems to be changing however and we are now seeing consumers start to look closely at connectivity speeds when they choose an ISP. As consumers start to demand even faster speeds to cope with IPTV and video on demand connectivity speeds will play an even more important role when it comes to choosing an ISP.
Building a business case for triple play
The channel can build an effective business case for offering voice, data and video in business markets from two dimensions. The larger resellers have strong system integration opportunities as service providers look to upgrade existing networks to support triple play. Smaller resellers will find opportunities in the enterprise sector and other growing markets, including hospitality and education.
To encourage business to move to triple play, resellers need to use their existing networking technology knowledge and demonstrate how businesses can enhance quality of service. By taking advantage of their IP Ethernet experience they can contribute knowledge about building IP triple play networks for converged solutions. There is no magic here because this is standards-based technology – resellers just need the ability to reconfigure resources to deliver different applications.
Building on existing technology bases
The channel should not have to convince business customers to rip out existing technology. Migration to IP is already underway in many cases. Full IP adoption is not going to happen overnight however, as many businesses still use TDM services. Vendors should demonstrate clearly to customers how they can enhance their technology for specific business requirements. New challenges can be met by integrating telephony with IT, but above all, resellers should be careful to deliver quality of experience to justify this integration.
Impact on margins
The impact on bottom line margins will be positive for triple play sales as opposed to traditional voice and data plays, because demand for integration capabilities will create new revenue streams. Resellers can demand high premiums for offering new hardware products, and move from offering mainstream commodity products to systems that add real value.
Training and support requirements
Networking vendors are recognising the potential for the triple-play market to expand quickly and are developing tailored programmes to empower resellers to develop leads in this market. The best suppliers will offer end-to-end triple play training, technology to market training, market awareness and support for individual products and solutions to enable system integrators to scale up staff knowledge to get them quickly up to speed.
In the medium term certain markets are becoming particularly ripe for triple play adoption. Resellers should pay close attention to the retail sector where in-store video streaming is driving implementation of triple play services, for instance. The hospitality sector, universities and hospitals are also increasingly looking to triple play services, with a growing number of implementations already complete across the UK and further long term prospects developing for system integrators to take advantage of ‘fibre to the home’.
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