Home internet providers need to demonstrate sensitivity to the exceptional circumstances of their customers. They need to show empathy by doubling down on their customer retention efforts and avoiding points of friction such as price rises or service blackouts. Finding the right balance will mitigate a post-crisis rush to switch.
6. Home internet providers should address customer concerns about their spending ability or risk paying the price later.
The economic consequences of COVID-19 will be felt in the long term. Home internet providers who assume business as usual risk overlooking the sensitivity of this issue.
A third of households (33%) state they are trying to pay less for their communications and content services during the current crisis.
The issue is even more stark among those who genuinely identify an issue with payment. Almost a quarter (23%) of households state they will have difficulty paying their bills in the coming months. This number more than doubles to a staggering 48% for 18- to 24-year-olds.
Home internet providers need to be sensitive to their customers’ financial concerns, now and in the future. They must adjust their offering and pricing, develop a specific approach for the value-conscious segments and position themselves as empathetic to customers’ changing financial situations.
7. Wireless operators have earned the right to broaden ambitions and conquer the home.
COVID-19 is a catalyst for the long-term aspirations, explicit or otherwise, of wireless operators to take more control of the home.
The overall perception of wireless operators is that they are handling the current crisis much better than most. 88% of mobile customers state the quality of their connection to be unchanged or better, while 66% think wireless operators are performing well in the crisis overall. This strong perception may have to do with wireless operators’ abilities to rapidly pivot services to meet current needs. Could this positive halo effect play out longer term?
When asked if they are considering switching their current home internet provider, 28% of households identified they would likely switch to a wireless operator. This 28%, which is significant, correlates closely to age with younger demographics, 18- to 24-year-olds, most likely to switch from fixed to wireless (33%).
Wireless operators should pivot their efforts to position themselves as viable alternatives in the minds of potential consumers, while current home internet providers should take steps to counter insurgent competition.
8. Wireless operators need to do more to convince customers that 5G matters.
If wireless operators are to sell the benefits of their services as an alternative to fixed broadband, they need to do a better job communicating their messages.
With the increased demand for internet use, this is the opportunity to accelerate the 5G push for mobile internet. At one level, the news is positive, with almost a quarter of consumers (24%) saying they are considering a 5G connection as a result of the crisis. Yet, when asked a similar question prior to the current crisis, over a third of consumers were considering switching (37%).
The opportunity, as well as the challenge, for wireless operators is the large group (36%) in the middle who seem ambivalent about 5G. The ability of wireless operators to convert some of this group to have genuine interest in 5G could go a long way to determining the speed of 5G adoption.
9. Massive growth in streaming media usage – including from first-timers – signals favorable future OTT growth potential.
Almost half (47%) of households claim increased use of content streaming services. A large slice of demand is being satisfied by free services (60% say they have signed up for free trials). The heavy consumer usage during shelter-in-place combined with a willingness to test new offerings could lead to accelerated monetization over time. In fact, 15% of subscription video on demand (SVOD) free-trial users say they intend to become paying customers at the conclusion of the promotional period. Further, the advertisement-based video on demand (AVOD) platforms gaining new users are primed to realize revenue growth when the advertising market regains its footing if customer retention metrics hold in the post-crisis phase.
Importantly, streaming service providers must balance the near-term marketing benefit of offering free trials with the rapidly expanding over-the-top (OTT) competitive landscape. Consumer entertainment budgets are finite; securing paid subscriptions and reducing churn is a strategic and financial imperative for OTT players.
In an early look at the longer-term impacts for both linear and streaming media, 27% of total respondents agree that their viewing habits will permanently change as a result of COVID-19. In the 18- to 34-year-old age group, this number is even higher, with 43% saying that a permanent change is coming. If these preliminary indications prove to be durable, the migration of consumers away from existing pay-TV offerings will accelerate; however, the ability to access sports content, which largely resides within the “legacy” video ecosystem, remains a powerful force against consumer change (see #10 below).
Home internet providers should urgently reinforce their end-to-end value propositions around streaming. They should build on the relatively recent marketplace and pivot toward offering connectivity solutions like broadband, in-home WiFi solutions, voice-driven remotes and packaging third-party OTT offerings with existing service bundles.