For the past quarter-century the Telecom industry in the US has been a veritable laboratory of business and marketing practice. The truth of such well-known ideas as “Creative Destruction” are being borne out as companies rise and fall in wave after wave of innovation, while the limits of others, such as product bundling, are also demonstrated every day.

The result has been a Wild West of marketing activity that only intensifies as the changes continue. Cable TV companies are offering broadband and phone service. Phone companies are offering broadband, television, and movies. Electric utilities may be offering all of these services soon. Satellite TV companies are in trouble. Wireless companies are stealing landline subscribers and may be offering TV. Verizon is trying to win by laying fiber to three million homes per year. AT&T is spending billions to solve exactly the same problem using DSL. Meanwhile Skype and other independents are offering almost free worldwide phone and picture phone service. Intense competition is forcing prices down and will certainly eventually lead to the destruction of several large household-word telecom companies. Who will survive?

Industry expert Arthur Middleton Hughes explains what these Telecom enterprises can do to continue to exist. Their salvation rests not in their technologies, Hughes explains, but in their marketing strategies. In highly readable, everyday language, Hughes provides a strategic marketing map for every player in the industry, showing how to apply sophisticated marketing tools to each industry sector and each technology. Key subjects covered include:

1. Customer churn reduction strategies
2. How to predict what subscribers will do
3. Customer lifetime value and segmentation
4. How mass marketing is threatened by Internet television
5. How real is the risk from Internet phone calls
6. How WiFi and WiMAX may make phone wires obsolete
7. Why the Triple Play may not be a winner
8. Why HDTV may determine the winners in the Telecom battle
9. What Telecoms of the future will look like
10. Strategic hot buttons for future marketing activities

If you are in Telecom, the marketing insights here could make this your survival manual. If not, you still will find invaluable insights to tailor to your company’s marketing strategies and programs. There are lessons here for marketers and business leaders in every industry.

Preface

Chapter 1 The Telecom Revolution: Creative Destruction and Packets

Recent Telecom Developments
Packet Switching
    Circuit Switching
    How Packets Were Created
    How Packets Get to Their Destinations
    Cable Types: Coaxial, Copper, and Fiber
    The Growth of Broadband
    The Invention of VoIP
    Internet Protocol Television: IPTV
    Broadcast over Power Lines
The Effect of Packet Switching on the Telecom Industry
    Who Owns the Pipe?
Take-Away Thought
Notes

Chapter 2 The Lifetime Value of Telecom Customers

What a Lifetime Value Table Looks Like
    WhyThese Terms Are Important
How Long Is a Customer Lifetime?
Churn Rate and Retention Rate
Landline ARPU
    Gross Profit and the Discount Rate
    Computing the Discount Rate from the Interest Rate
    Net Present Value (NPV) Profits
    Cumulative NPV Profit
    Lifetime Value
Alternate Lifetime Value Calculation Method
Strategy Development
What Are the Average Industry Prices and Costs?
Adding Broadband
The Triple Play
Why the TV ARPU May Grow with Time
Lessons Learned
Will the Churn Rate Go Down with the Triple Play?
Customers as Assets
The Computation Period
Including a Customer Retention Marketing Program
The Quadruple Play
Calculating the LTV for Customer Segments
Calculating the LTV for a Single Customer
LTV as a Predictor of Success
    Possible Strategies
    How to Do Your Own Calculation
    Keeping Management Informed
Conclusion
Take-Away Thought
Notes

Chapter 3 Churn Reduction in the Telecom Industry

Kinds and Causes of Churn
Kinds of Customers
The Importance of Cross-Sales
Predicting Churn
    Reducing Churn
    Measuring Success in Churn Reduction
The Value of Churners
Take-Away Thought

Chapter 4 How to Predict Telecom Customer Behavior

Outsourced Analytics
    The Principles behind Successful Analytics
Using PredictiveModeling for Cross-Sales
    What a Monthly Mailer Does Not Learn
    Details of a Prospect Database
    Further Results from a Prospect Database
    Geographical Coding of Your Prospect Database
Prospect Database Problems
    Why Would You Want to Use Direct Mail?
Take-Away Thought

Chapter 5 Marketing to Telecom Customer Segments

Segment Definition
Microsegmentation
Segment Strategy
    Infrastructure
    Action Plan
    Segmentation Enhancement, Hypothesis, and Analysis
    Strategy Development
    Content and Offer Development
    Distinguishing Segments and Status Levels
    How to Compensate Segment Managers
How to Set up Segments
Take-Away Thought

Chapter 6 Marketing Strategy for Telephone Companies

Where It All Began
Loss of Landline Subscribers
Implications of the Decline
Telephone Company Response
Benefits of the Triple Play
Does theTriple Play Improve the Acquisition Rate?
    Conclusion
How Phone Companies Are Providing Digital TV
Fiber to theHome: TheVerizon Method
Existing Copper Wiring: AT&T and Most Other Telcos
Advantages and Disadvantages of theTwo Methods
Will Phone Service, Wireless, and Broadband Become Commodities
    Broadband as a Commodity
    Phone Service as a Commodity
HDTV Bandwidth Requirements
The Threat of Naked DSL
The Threat of VoIP
Telco Situation Summary
Solving the Telco Problems—Ten Steps to Success
Take-Away Thought
Notes

Chapter 7 Marketing Strategies for Cable and BPL

Growth of the Cable Industry
    Key Reasons for Revenue Growth
    Key Reasons for Lack of Subscriber Growth
Rising Cable TV Rates
Conversion to Digital
Premium Cable Services
Growth in Cable TV Advertising Revenue
The Impact of Netflix
Cable Broadband Subscribers
Cable Telephone Service
The Problem of Local Franchise Agreements
Satellite Competition
The Lifetime Value of Cable TV Subscribers
The LTV of Analog Subscribers
Digital Cable Subscribers
Premium Digital Subscribers
How Broadband Increases Subscriber Lifetime Value
Cable Phone Service Effect on Lifetime Value
What Smaller Cable Companies Look Like
How Cable Companies Get Subscribers for the Triple Play
    Know Your Market
The Wireless Opportunity: Quadruple Play
Contact Your Triple Play Prospects
Segmenting Your Customers and Prospects
How Do You Get in Touch with Your Most Likely Switchers?
Managing Your Prospects
Fighting Churn
How to Create Effective Direct Mail for Cable Services
Getting Serious about Digital and Laying Fiber
Broadband over Power Lines
    How BPL Works
Advantages and Disadvantages of BPL
    Marketing BPL
Take-Away Thought
Notes

Chapter 8 Marketing Strategy for Satellite TV

How Satellite TV Works
Difficulties of Satellite TV Marketing
How Satellite TV Is Marketed
How Satellite TV Companies Acquire Customers
What Satellite's Competition Is Doing
    The Importance of a Merger
What Churn Costs
    The Current Financial Situation
Reducing Churn in Satellite TV Customers
What Is Being Done Today?
Conclusion: The Future Is Bright
Take-Away Thought

Chapter 9 Marketing Strategy for Wireless

How It All Began
    Regional Wireless Companies
    Mobile Virtual Network Operators (MVNOs)
GSM versus CDMA
    Advantages of GSM
    Advantages of CDMA
Edge and EVDO
    Third Generation
    Fourth Generation
Wireless Application Protocol (WAP)
    The Importance of the Handset
SMS
TV on Cell Phones
VoIP on Cell Phones
    Spam on Cell Phones
    The Quadruple Play
    GIS on Cell Phones
    Ring Tones and Music
Buying Products with a Cell Phone
    Ads on Mobile Phones
    Prepaid Cell Phones
Marketing Strategy for Cell Phones
    Churn Problems
    Segmentation by Contract Type
Reducing Churn
    Case Study: Wireless Churn Reduction
    The Infrastructure of a Churn Reduction Program
    A Practical Churn Reduction Subscriber Loyalty Program
Conclusion
Take-Away Thought

Chapter 10 VoIP Marketing Strategy

How VoIP Works
VoIP Providers
Case Study: How Skype Got Started
    How Skype Works
    Skype and Ring Tones
    The Skype Marketing Strategy
    The Future for Skype
    Skype Competitors
VoIP Call Quality
    Call Centers and VoIP
    What Happens When Broadband Is Down?
    Security of VoIP Calls
    VoIP Cost Savings for Business
Case Study: Business VoIP User
Wireless VoIP
WiFi, WiMAX, and VoIP
Marketing VoIP
    The VoIP First-Mover Advantage
    The Philosophy of VoIP Consumer Marketing
The Future of Independent VoIP Services
Take-Away Thought

Chapter 11 IPTV and Individually Addressable TV Ads

Digital Television
    How Television Is Digitized
The Advantage of Digital TV and High Definition TV
Cable Company TV Problems
Phone Company Television Delivery Problems
    The Head-End
    The Access Network
    The Subscriber Site
Video on Demand
Marketing Telephone Television
    Phone TV Campaigns
    The End of TV Mass Marketing
Targeted Addressable Advertising
    A Set-top Box Database: Big Profits from Targeted TV Advertising
    The Privacy Problem and Its Solution
    How a Set-top Box Database Is Created
    A Practical Example: Advertising for a Ride-on Mower
    How Targeted Advertising Differs
A New Philosophy for Television Advertising
Take-Away Thought
Notes

Chapter 12 The Promise of WiMAX

How WiMAX Differs from WiFi
    WiFi Equipped Cell Phones
Will Municipal WiFi Networks Be Profitable?
WiFi Marketing Opportunity
    The WiMAX Advantage
    Sprint Invests in WiMAX
Why the Sprint WiMAX Network Could Be Successful
    The Rhode Island Project
    Cost of WiMAX to UMA Operators
Marketing Opportunities for WiMAX
A Look at the Future
    Which System, Ultimately, Will Win?
Take-Away Thought

Chapter 13 The Future of Successful Telecom Marketing

The Commoditization Problem
    Broadband as a Commodity
    Phone Service as a Commodity
    Why TV Will Not Soon Become a Commodity
    The Implication for Cable and Phone Companies
What Can Be Done?
High Definition Television: The Deciding Factor in Telecommunications?
    Case Study: Introducing Color TV
Marketing Strategies
A Checklist for Success
Lessons We May Have Learned
Take-Away Thought

Glossary

Index