Communications Technology: Archive

Swaps, clusters, mergers, takeovers. These are the buzz words of todays communications industry. With the deals each day getting more complex, as exemplified by AT&Ts stunning winning bid for MediaOne, its critical that we as an industry pay attention to the potential impact these network shuffles can have on customers.

In the excitement of the chase, its easy for the deal makers to forget how all these mergers, swaps and takeovers can impact the folks who buy the services we are trying to sell. No matter the owner, customers still want reliable service, accurate and timely bills, and quick response to trouble calls. Its critical that your operational support systems be prepared to handle the influx of new subscribers.

Failure to smoothly bring the new customers into your fold jeopardizes the current revenues your company receives from them. But more importantly, your multiple system operator (MSO) also puts at risk any future cash it may earn from the new, advanced services that you, the engineer, have been working so hard to upgrade your network to deliver.

According to Forrester Research, current cable subscribers pay an average of $34 per month for TV service. However, if you add high-speed Internet access ($40) as well as local and long distance phone service ($50), monthly bills could top $120 for an MSO. (See sidebar.) Customers buying all three services from cable companies will become a significant market after 2001 and account for 11 percent of cable subscribers in 2005. You dont want to lose those potential revenues by fumbling the customer transfer.

You also need to remember that customers are very price sensitive. If they feel unloved, theyre apt to move to a cheaper provider. (Theyre likely to do this anyway.) Forrester Research reports that 55 percent of those who switched Internet service providers (ISPs) or online service providers did so because of price.

Cable TV service also is subject to the same price pressures. The companys research reveals that given a choice of providers, 5 percent of subscribers would leave their cable company with no price difference, 12 percent would jump ship just to save five bucks a month, while half the cable population (53 percent) would switch to save $10 a month. Offering customers a bundle of services that costs less than if theyd purchased each service separately is one way to protect against this sensitivity to price.

However, if your service stinks and theres a lower priced competitor, then nothing can save you.

Average Monthly Household
Expenditure

Local Phone:      $24.53
Long Distance:   $23.45
Cable:               $33.55
Cellular:             $33.97
Pager:               $11.72
Internet:             $18.46
Satellite:            $40.15

Source: Forrester Research

Youre probably tired of everyone badmouthing the cable TV industry. So, let me share a personal example of how one telephone company left its customers in the cold as a result of all this merger mania.

First off, I have to say that Im one of the 55 percent of consumers who switched ISPs because of price. In other words, Im cheap. I signed up for AT&Ts free Internet service for a year, and when my year expired, paid the amazing rate of $4.00 for four hours of access. When AT&T had the nerve to raise the price to $10.00 for 10 hours, I switched to MCIs bargain rate of $3.00 for 3 hours. (Im obviously not a Web junkie at home.)

Then began the merger trouble. WorldCom wanted MCI. As a result of the Federal Communications Commissions attempt to keep MCI WorldCom from capturing too large a share of the Internet market, the FCC forced MCI to sell its Internet customers and backbone. Cable & Wireless was the "lucky" winner, paying $1.75 billion. C&W is now suing MCI for what it calls sabotage and noncooperation during and after the transaction.
But I digress ....

Cable & Wireless e-mailed me in September to tell me that it was now my ISP. Then, I waited for a bill ... and waited and waited. Some three months later, I finally got a bill for $14.95 for one months service. So I called C&W, and yes, the customer service agent acknowledged, the company had made a mistake and billed me for the incorrect amount. She assured me the billing system was being fixed, and next time Id receive an accurate bill.

Well, another month rolls along, and I receive my next bill. This time its for $3.00, but it shows the previous $14.95 as a past due charge. In addition to being wrong, the other annoying thing about these bills is they are for the period three months prior. In other words, the bill is postmarked the 20th or so of the current month, the invoice is dated the 25th of the prior month, but the billing period is for the month before that. I have a hard enough time remembering what I did yesterday, let alone three months prior.

So now, my husband is annoyed. He calls the customer service number, presses "2" for existing account inquiries, and gets the message that due to the high volume of calls (I guess everyone else was annoyed with their bills), it will be 20-30 minutes before the call will be answered.

He waits, and waits, and waits for probably 40 minutes. When he finally talks to a live person, lets just say that the agent is less than impressed with our $3.00 account and doesnt do anything to convince us that the problem has been fixed. Somehow in all the billing mess, weve also managed to overpay and now have a credit. We ask if we can receive a new bill, showing the amount we actually owe. Not possible, says the agent.

Well, my husband isnt someone who gives up easily. In spite of the earlier 40 minute wait, he calls back. This time he selects "1" to order new Internet or long distance service, and what do you know, an agent immediately picks up the phone. (I wont tell you what I think of a company that understaffs its support lines for existing subscribers when it knows it has a major billing problem, yet staffs up its lines for new customers.)

In fairness to C&W, the new agent doesnt transfer the call in spite of the sneaky way my husband got through to a live person. She apologizes for the confusion, and says shell ask for a new bill, but doesnt know if well be able to get one. (We never did get a corrected statement, but the next bill at least was finally accurate.)

Why does this matter? Because C&W cares about my $3.00? No. Because the carrier now wants to sell me long distance service, and has been e-mailing me and including notices in my bill that I can buy phone service for 7 cents per minute on weekdays and 5 cents per minute on the weekend. Needless to say, after all the trouble Ive had getting a $3.00 Internet bill, Im not interested in compounding the problem by adding my phone service to the account.

C&W is an international telecommunications carrier with the potential to sell me not just Internet access or phone service, but all manner of advanced telecommunications and video services. But, because it took the company so long to generate its first bill, and then when the first two bills werent even accurate, I wont be buying additional services from the company, and I imagine other customers are thinking the same thing. Thats an important lesson that cable can learn from its telco brother.

Theres a lot of money at stake here. By 2005, Forrester predicts cable subscription revenues will top $61 billion ($38.3 billion video, $11 billion cable modem, $11.4 billion cable phone). Dont risk those revenues. Make sure your support systems can handle both new customers and new services on your network. - CT

Jennifer Whalen is editor of "Communications Technology." She can be reached in Potomac, Md., at , ext. 2057, or via e-mail at .