BSkyB Becomes the Latest Entrant into the Broadband Price War

July 18, 2006 - Today BSkyB will become the latest entrant into the broadband price war by launching its high speed internet service, an endeavour that will likely incur several years of losses before becoming a profitable portfolio of services.

Motive argues that while BSkyB should be applauded for laying the foundation to become a major player in the digital home in such a daring way, it must carefully consider how the technology will stand-up in the consumer environment, if it is to keep customers in its bundle.

As with many cable, satellite and telecoms providers, BSkyB also plans to attract customers with the offer of cheaper calls through a new voice over internet protocol (VoIP) service. Motive points out that while free broadband and phone calls are certainly a massive draw for consumers, set-up and configuration of these services is often a tricky process and ongoing technical problems can be a major turn-off, causing customers to quit the entire bundle.

Delivering such services is complex. They involve multi-vendor technologies and nebulous infrastructure, which often fail to work when put together. This results in a troublesome service, frustrated customers, and fiercely increased demand on support resources - something that providers offering new services, such as BSkyB, are often unprepared for.

"In the quickly saturating triple play market, providers are rushing to launch new services and lure new customers," said Kenny Van Zant, head of strategy and corporate development at Motive. "However, in their haste, many providers overlook an issue of crucial importance - the management of the technology. Intelligent management automation, which allows the service to dynamically install, configure and repair itself, should be considered from the outset in order to shield complexities from consumers, keep support costs to a minimum and most importantly, deliver a positive end-user experience. If providers allow these services to go un-managed they will drain support resources and erode the bottom line."