By Dan Gledhill / Harmonic
Consumers today benefit from a growing number of new, alternative sources for internet connectivity, challenging providers to elevate their services. In this context, it has become critical for operators to attract new customers, reduce churn with improved customer satisfaction and develop new revenue streams that offset price declines stemming from increased competition.
Cable broadband operators face challenges to fight churn with service excellence with an eye on not breaking the budget.
Growing competition, service reliability and churn
Aggressive advertising is causing a shift in marketing messages, driving the perception that cable is slower and less reliable than fiber. In the U.S., these messages are coupled with aggressive billboard rates at under $70 for symmetric Gbps fiber-based internet to attract new subscribers. Additionally, there is an uptick in broadband packages bundled with cellular and over-the-top video service subscriptions to further differentiate offerings.
With such attractive options, consumers are open to change. Reports indicate that consumers have shifted away from speed for performance scoring and now base performance on service reliability, availability and overall quality of experience. Today, always-on service is a must for every subscriber.
Modernization is Urgent: Leverage Network Function Virtualization and Telemetry
If a subscriber’s internet is out for more than five minutes and 26 seconds a year, the network is underperforming. That threshold correlates to 99.999% availability and is today's benchmark. By employing proactive network analysis with integrated artificial intelligence, operators can avoid outages and service degradation.
Traditional iCMTS and CCAP hardware solutions utilize poll-based alarm systems, often with the consumer premise equipment at the end of the line serving as the primary source of feedback. The resulting data structure is usually disorganized, incomplete, and overwhelming in volume, making issue correlation a challenging, inexact process. Shifting toward present-day distributed access architecture (DAA) with virtualized cores changes this paradigm.
Utilizing a cloud-native virtualized core to interact and manage all devices across the footprint enables intelligent network components like nodes and shelves to report performance at the junction of last-mile and mid-mile to narrow the source of unexpected behaviors.
A virtualized core solution should allow for data gathering via streaming telemetry. Each connected device can then push information to the core for real-time analysis and less overhead on the transaction and offer operators practical recommendations for service recovery.
With these network performance improvements, operators can shift their focus toward proactive system maintenance based on warning canaries that the system automatically identifies and prioritizes against operator-defined performance targets.
Historically, carrying out this level of analysis required large, expensive arrays of compute and storage servers. Virtualized software running on the latest innovations in off-the-shelf processing and cloud infrastructure mitigates that challenge while providing the flexibility to scale for demanding computing tasks when required.
Operators are choosing to keep traditional iCMTS and CCAP invest in systems that will drive higher costs, translating to the subscriber’s bill and a worse internet experience. Legacy hardware solutions cannot offer service refinement, resulting in poor reliability and lower availability.
The latest virtualized core solutions offer upfront price-parity and price savings relative to those traditional iCMTS and CCAP, even before factoring in the long-term operational benefits. Switching to a virtualized core should be an immediate priority for cable providers.
Fiber as a differentiator
There are no one-size-fits-all solutions for connectivity. Some consumers prefer fiber and specifically want a fiber solution. Broadband service providers need solutions flexible enough to accommodate. Agreeing to serve enterprise accounts and high-demand residential customers from a fiber network is a great retention tool.
A vital component of a flexible broadband ecosystem is the ability to readily and efficiently support the addition of fiber-to-the-home (FTTH) infrastructure from any existing location. Sometimes called precision PON (see Precision PON: A Transformative Approach to Next-Gen Broadband), operators can strategically deploy fiber broadband from existing nodes and aggregation devices initially deployed to serve coax services. This allows the flexibility to deliver fiber-based internet cost-effectively to specific buildings or consumers without incurring the cost of widescale fiber construction.
A similar strategy can be employed for new developments or high-growth areas that favor fiber-based connectivity. The concept is identical to precision PON with the nuance that a fiber island deployment covers a defined geographic area, street, or community.
Consolidate and Extend: Optimizing Use of Real Estate
There are long-term commercial advantages to using virtualized infrastructure. Operators that invest in flexible, software-based broadband solutions coupled with DAA gain a competitive edge by efficiently capitalizing on points of presence like headend and hub sites.
Rent, space, power, and cooling represent significant recurring costs for a broadband provider. Increasing the capacity of each site or reducing the equipment can lead to an immediate return. Operators moving to DAA and virtualized core achieve up to 95% reduction in the space and up to 70% reduction in power consumption at these locations, resulting in tens of millions of dollars in aggregate annual cost-savings.
Centralized management enables operators to implement high-density effectively. These manned locations aggregate traffic from smaller unmanaged huts, shacks, and outdoor cabinetry to efficiently serve hundreds of thousands or millions of subscribers. Extended range coherent optics between the core and unmanaged sites enable operators to reach hundreds of kilometers in every direction from a core, allowing access to a larger serviceable market with fewer buildings and less overhead. Coupled with small-footprint outdoor cabinetry containing equipment that supports coherent optics and the flexibility to cascade aggregation devices, site construction is no longer a barrier to entry for new areas. Similarly, expanding the reach of last-mile networks through powerful FTTH and high-performance digital nodes, in the case of a coax plant, extends the service reach of an operator’s existing locations without compromising service quality.
Fight for subscribers
There are several ways that operators can elevate their broadband business and improve customer satisfaction.
Play the speed game: Virtualized core solutions coupled with full-spectrum DOCSIS 3.1 modems enable fiber-like speeds of 8 Gbps over existing DOCSIS 3.1 outside the plant. Even without a DOCSIS 4.0 rollout, operators can offer their subscribers enhanced speed tiers as a premium option. Given its low initial overhead and direct correlation to incremental revenue potential, full-spectrum DOCSIS 3.1 should be part of every operator’s near-term roadmap.
Wi-Fi is crucial: The Internet is only as good as in-home connectivity, so offering mesh Wi-Fi as an upsell to subscribers is necessary. Mesh networks scale with resident size, orientation of home offices, and placement of critical Wi-Fi-enabled devices in the premise, so flexibility to accommodate a wide array of scenarios with a high level of confidence is essential. Further, subscribers will pay for better Wi-Fi, so the correlation between the cost of incremental mesh Wi-Fi devices can be directly tied to revenue, making this a straightforward business case.
Open ecosystems make a difference: Underpinning the in-home strategy is the concept of an ecosystem that supports best-in-breed consumer premise equipment, even from a third party. Enabling operators to utilize the latest consumer premise models from any vendor means their subscribers will always enjoy a competitive turnkey option from the provider. It allows accommodating customers who want to supply their in-home gear or buy it upfront.
Double down on enterprise: Bulk accounts are often the heroes of the balance sheet. Offering a full-service portfolio to those clients, including options for fiber to the home, active Ethernet-managed Wi-Fi, and even traditional RF video used in gyms, can differentiate their broadband options. Providing a straightforward single-hand-to-shake increases the operator’s chance of securing the account and increases the revenue generated.
Neutral host networks: While this concept is still relatively new in the United States, it is common practice internationally. The latest virtualized cores offer a flexible multi-tenant portal so multiple broadband providers can co-exist within the same ecosystem. Monetizing investment by leasing infrastructure to virtual competitors is an attractive business-to-business revenue stream that can be layered on top of existing business-to-consumer sales. Selling network capacity to other providers is an incremental income for operators with a differentiated broadband experience at low risk of cannibalization. It can enable an operator to effectively capture value by serving more homes passed.
Dan Gledhill is the senior VP of broadband business operations at Harmonic.