The biggest fear of one new LTE operator is that the industry will fall into the same trap as with 3G – devaluing the new service from day one. Mark Liversidge, CMO of Hong Kong’s CSL, was one of the keynote speakers at the TM Forum’s Management World Asia event in Singapore last week and his words may resonate closely with others embarking on the LTE route.
Liversidge said that very often we start at the position of having this bright, shiny new technology and then struggle to give the consumer or the businessman a really strong value proposition that makes them part with additional incremental revenue for that service. It seems the industry has created a substitutional effect because we constantly bring to the market new services and products at the same price as the old to drive up volumes and encourage take up. The result is an immediate devaluation of the new services and products which cannot be recovered.
It appears CSL wants to avoid this for LTE and when it begins to market LTE it will do so as a premium service that will provide the best possible seamless experience to its customers. This could prove to be quite a challenge in a market that is saturated, ultra-competitive and over-serviced.
The situation in Hong Kong is exacerbated by the fact that a number of local networks are subsidiary businesses of larger non-telco corporations that don’t rely on profitability for their continued operation. Heavy, almost ludicrous discounting is rife, and churn is a constant problem. Offering a premium LTE service at a premium price will be a bold move and even though the supporting reasons are sound it will be interesting to see if the market agrees.
Of course, it is not all about speed and bandwidth, Liversidge was careful to point out that supporting services and products that operate best in the LTE environment will have to be made available to add value and some level of stickiness. Cloud services come to mind immediately and will almost certainly be targeted at the SME, enterprise and corporate customer base.
It will interesting to see how CSL responds if and when the competition resorts to its old discounting habits.