Last week BSkyB became the latest entrant into the broadband price war, by launching its free high speed internet service. This is undoubtedly a very daring endeavour. Firstly, BSkyB has no telecoms heritage. Secondly, this service is widely predicted to incur several years of losses before becoming profitable.
BSkyB isn’t the only firm prepared to risk short-term loss for long-term profitability. Over recent months, free broadband services have become a necessity as service providers scrap to gain full control of the digital home. We’re also seeing cable, satellite and telecoms providers rolling out new services left, right and centre. Many are pairing up or even buying each other to make sure they can offer the 4-play bundle. So, while broadcaster BSkyB is set to offer cheaper calls through a new VoIP service, BT is about to launch its IPTV offering and NTL has snapped up Virgin Mobile so it can add mobile to its mix. It seems everyone wants a piece of the broadband pie.
As providers rush to roll out new services to this quickly saturating market, there is a concern that they haven't fully considered how the technology will stand up in the consumer environment. While free broadband and phone calls are certainly a massive draw - as is cheaper and more flexible TV - set-up and configuration of these services is tricky. I for one would be completely turned off by technical problems. If these turned out to be ongoing, I wouldn't think twice about quitting the entire bundle.
The multi-vendor technologies and nebulous infrastructure involved in such roll outs spell complexity - something we don't want in our homes. In their haste to launch new services and lure new customers, I suspect many of these providers have overlooked the management of this technology.
This broadband gold rush certainly makes for interesting times, but with providers already struggling to get basic customer support right, if left unmanaged, 4-play could drain support resources and erode providers' bottom lines, while leaving consumers frustrated and dissatisfied. Providers must think about how the technology can be managed from the outset, if they are to be successful in the digital home.