Part 1: MSO Opportunities and Challenges
COVID-19 is An Opportunity for MSOs to Showcase New Era Leadership
Consumers will emerge from this pandemic with new digital skillsets and habits, and are likely to have put a higher value on quality and reliable home connectivity. According to GlobalData’s Emma Mohr-McClune, this may prompt MSO consumer strategy revisions, worldwide.
This blog is the first in a series looking to delve deeper into the cable operator, or MSO, market. The first two blogs written by Emma Mohr-McClune will look to examine some of the challenges and opportunities that lie ahead in this time of change. The last two blogs written by Emir Halilovic, will look to examine how these challenges and opportunities are affecting the underlying network infrastructure of these operators and how these changes may enable them to become even more competitive.
There's never been a crisis that plays so squarely to the strengths of the cable operator (MSO) community.
The COVID-19 response from some of the world's leading MSOs has been exemplary in terms of guaranteeing critical connectivity to financially vulnerable homes, national and federate state agencies, emergency services and hospitals within their respective franchises. In many cases, MSOs were among the first to commit to national obligations to keep citizens online.
MSOs have also moved fast to give voice to their community leadership roles. In North America, the member companies of NTCA pledged over $100 million in public service advertising (PSAs) for community health education. In Canada, Rogers Communications partnered with community NGO and aid organisations to address a number of lockdown welfare concerns, from food shortages and emergency response for women at risk, to mentorship programs for young home learners. COVID-19 has created an opportunity for MSOs to showcase this startling insight: Connectivity is welfare, both public and private.
But the pandemic has also served to highlight a number of opportunities that next-gen MSO networks are uniquely positioned to address.
It’s likely that tomorrow's consumer will put even more value on high-quality, reliable home connectivity – and not just as an emergency measure. That’s because consumers in lockdown are currently on a fast-track digital skills learning curve, gaining a new level of familiarity with digital use cases that will shape the society of the future, particularly around telehealth, remote working and online education.
Society is changing, and as much as we all fervently wish to see life go ‘back to normal’, it’s unlikely this new normal will resemble our lives before COVID-19.
The writing is already on the wall. Popular video conferencing platforms, from Zoom to Google Hangouts, have issued guidelines and video tutorials expressly for an entirely new, and unexpected, user profile: Seniors. Public health agencies worldwide are using the pandemic to pilot remote consultation services that weren’t predicted to become mainstream for several years yet. Enterprises are reassessing their previous business travel habits. Even dyed-in-the-wool distrust for the remote working model is under review: Potentially millions of dollars of office real estate savings hang in the balance. Some states are sensing the opportunity to force the issue. In Germany, the government has called for a new law to guarantee all Germans the right to work at home, even after the pandemic is over. Given German employers’ infamous distrust of the home working model, this initiative – in the midst of a national emergency – is remarkable.
The broadband providers best positioned to meet the challenges of this new normal will be those in the strongest and most flexible capacity and network management position. To that end, several MSOs have issued statements to the effect that they can handle the recent spike in COVID-19 related consumption, and then some.
Ironically, this position comes at the end of a difficult decade for MSOs. In response to increased competition from services such as Netflix, some cable operators have begun a long-term transformation journey using DOCSIS 3.1 and additional software-based cable access technologies.
At the outset of this journey, no one could have predicted the COVID-19 crisis, or the immediate demand path it would open up for heightened capacity, flexibility and scalability in traditionally off-peak times. Or the required shorter development cycle advantages and automation capabilities of software-managed networks that are now so critical to meeting the upstream use case consumption - pattern changes that the crisis is normalising.
The spikes in traffic that were forecast out for three, perhaps four years down the line, particularly around telehealth and online education, are today undergoing real-world scenario testing.
The MSO challenge then, is to make good on these opportunities, and devise a far nearer-term 2021 strategy that can better target a changed, post-crisis society with a more relevant portfolio of digital services.
What should that MSO portfolio look like? Which value-added benefits and services should be bundled together with cable TV and broadband to best meet tomorrow’s consumer appetite? The next blog in this series will make predictions about the shape of the future MSO bundle, together with the kinds of new partnerships and ecosystem investments required to make good on this opportunity.