Quad Play: The Future Of Telecommunications
Is the power of four the future of our telecomms?
Quad play may sound like something children do in their lunch hour at school, but it represents the sharp edge of telecommunications. Quad play is the provision of four interconnected communications platforms in one cohesive bundle – landline and mobile phones plus TV and internet access.
Most of us currently pay separate companies for these services, spreading our custom among an ever-shrinking pool of increasingly dominant brands. Those companies would much rather provide all our communications services together, which is why the last fifteen years has seen a steady procession of mergers and acquisitions. BT’s state-approved takeover of EE is the latest example of dwindling digital competition, which can be traced back to the merger of cable companies NTL and Telewest, and their subsequent takeover by Virgin Mobile.
Today, Virgin is the only firm offering quad play to its customers, who receive hefty discounts on mobile phones when they take out a landline, internet and TV package. BT’s newly-acquired mobile division will provide them with a comparable range of services, while Sky’s own mobile network (sharing its infrastructure with O2) will launch later this year. The differences between these companies will be subtle, but the combination of services will be the same. Clever marketing can help to mask any differences, such as BT’s adoption of YouView. The £897 million acquisition of Champions League football has given BT’s broadcasting platform a USP, though YouView compares unfavourably with the content-rich TV services of rival platforms.
Quad play represents a gold standard among Telco brands because it maximises revenue streams, and provides greater control over consumers who won’t be furnishing rival companies with any revenue. It’s also proportionally harder to leave a Telco brand that supplies four separate services, particularly if rivals have different distribution methods. While TalkTalk have to piggyback on other firms’ infrastructure, customers with proprietary products like Sky TV dishes or Virgin cabling are less likely to defect elsewhere. There’s also greater potential for the Telcos to upsell ancillary products where significant profits can be made, such as On Demand content or additional mobile handsets.
From a small business perspective, it’s hard to overstate the importance of dependable phone and internet access. TV services are less relevant here, though consumers often end up paying for more services than they actually need if the price is competitive enough. However, this remains a theory rather than a proven business model; even in America, only 13 per cent of US households have a quad play package. More tangible benefits for corporate clients include the reduction in paperwork provided by one combined contract instead of several separate ones, and having a single point of contact when something goes wrong. There’s no risk of internet and a landline providers blaming each other for the sudden loss of vital broadband services.
It has been suggested by marketing experts that monthly packages below £100 represent a psychological tipping point. People become willing to pledge that sum to one company rather than paying a comparable amount to several firms in separate chunks. It remains to be seen whether that is achievable in the long term, given the huge cost of installing seven-core cabling across the UK, or creating a countrywide 4G network.
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