A bigger wallet share

At the core of most debates over where and how much service providers should be investing in their networks is the question of whether consumers are willing to spend more of their discretionary income on new entertainment, information and convergence services.

It’s easy to make an argument in either direction because the answer isn’t that clear. Until a service exists, it’s impossible to know whether it will be popular enough to generate substantial new revenues. Ten years ago, if someone had asked if you would pay to download music onto a computer hard drive that fits in your pocket, you might have been perplexed, but today, those white earphones are seemingly ubiquitous, and podcasts have become a new method of communication.

A new survey of consumers who have been using TV caller ID for more than a year offers some insight into willingness to pay. Hargray Communications, an independent telco in Hilton Head, S.C., and Integra 5, which makes the software platform to deliver TV caller ID and more, found that half or more of the 4000 consumers surveyed were willing to buy additional services, such as e-mail and voice mail alerts on the TV or PC, and customer care messages, and that 80% of the households are willing to pay $1 a month per incremental service.

More than likely, it will be smaller service providers such as Hargray that first put these new services to the test, just as it was the independent telcos that first brought IPTV to market--but larger operators would do well to take notice. While there is a push right now to build the networks and introduce the basic video services into their markets to climb back into competition with cable on the bundle, telecom service providers are going to need new and differentiated services to compete, and the converged communications offerings could well be their best bet.

E-mail me at Cwilson3@telephonyonline.com.