Customer is king, and extracting the greatest value from a loyal customer is becoming the number one priority for the communications industry, says a report out today from Ernst & Young. The report, ‘The Connected Society: Winning the Battle for the Customer’, tackles the issues of online content provision, the broadband local loop, and consumer wireless communications.
E&Y says it expects business to redefine itself around ‘customer exchange values’ rather than ‘profit margins’. Meeting the demands of the customer is seen as the highest priority for communications executives, higher than regulatory and technological issues.
The report calls ‘content packagers’ i.e. web portals as the gatekeepers of the connected society and says that successful communications companies will become or tie up with high-value content packagers, failure to do so will result in displacement. The ability for portals to create one-to-one personalized marketing to a user will be a driving force behind their successes. E&Y expects a handful of dominant players in this field, coupled with a larger number of niche content aggregators. These big fish will be able to leverage their brand loyalty to extract more revenue from their customers.
On the issue of broadband consumer internet access, the report finds, unsurprisingly, that bandwidth will be a key issue in increasing internet usage globally, and that customers will demand more as they realize what they can do with it. However, the transmission medium race is not a clear cut one. In the US in 2002, 8 million homes will access the internet via cable, with a little over 4 million using a Digital Subscriber Line, with ISDN. But the report says: there will not be one technology winner.
One thing the report does make clear is that wireless communications will overtake fixed line sometime around 2008. It identifies four stages of evolution of the mobile market, the third of which is currently taking place, with the mobile beginning to substitute the fixed line. The final stage will, according to the report, see the replacement of fixed lines entirely by cellular devices, for voice and broadband data, with users customizing these smart user terminals like they would a PC.
