With the calendar turning to a new year, it's a good time for cable operators to consider how powerful trends like consolidation might affect their operational support systems and their billing and customer-care programs.
These trends will likely lead to more outsourced billing, greater application of Web self-care, rising expectations for speech-enabled integrated voice-response systems and growing consumer interest in subscription video-on-demand and voice-over-IP.
Let's start with consolidation. It's driving more MSOs to outsource their billing services. Rather than trying to merge two separate billing systems, MSOs often find it is more efficient to simply outsource the billing function to a third-party vendor.
And consolidation isn't going away. In 2001, the top 10 MSOs had 90% of all cable subscribers; in 1991, the top 10 had just 51%. Now that the AT&T-Comcast merger is complete, the top three have 64% of the market, according to a Kagan World Media estimate.
Of course, consumers provide another driving force. They're demanding better customer service these days. One way to provide that is through growing use of Web self-care for checking on the availability of services and for ordering services. More consumers than ever before will check the Internet first to resolve a customer-service problem. Fully 25% of companies surveyed expect to receive more than 20% of their customer care requests through Web self-care within two years, according to the Yankee Group. That's up from 11% of companies that receive at least 20% of requests through Web self-care now.
When customers do call their MSO, they want more ease in making contact. Speech-enabled IVR systems are growing in importance as more people use cell phones. When people are driving while talking on the phone, the last thing they want to do is try to punch a button on their keypad. This trend will cause cable companies to add speech-enabled IVR systems to their customer-service platforms in growing numbers.
Taking customer service to yet another level, SVOD gives consumers the flexibility to watch movies anytime they want for a flat fee per month. Consumers will tend to choose this option over standard VOD or pay-per-view. SVOD generated estimated revenue of less than $500 million in 2002, according to a Kagan estimate. But that's expected to grow to about $1.6 billion by 2006.
Consumers also want the option of turning to their cable company for phone service. That's where voice-over-IP comes in, and improved technology is boosting its use. The first end-to-end VoIP order management, provisioning, mediation, and rating and billing process was demonstrated in early December—a key step toward the cable industry's goal of routinely offering VoIP services.
Each of these trends is likely to pick up steam in 2003. Cable and broadband providers will want to make the proper adjustments to their billing and customer-care programs in order to address these trends and best serve their customers.