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The market share of traditional CSPs faces new challenges from vertical integration trends that are creating superplatforms

The future of communications service providers (CSPs) hinges on their ability to leverage the Superplatform trend.
New Superplatform players are using creative combinations of devices, communication and entertainment services, direct-to-consumer channels, and extensible cloud platforms to give consumers greater choice and more secure, reliable revenue streams.

Take Netflix, for example. Current subscribers can watch over-the-top TV (OTT) content using their cable provider for bandwidth only, forgoing any additional cable content services or premium channels being offered through the CSP. In this way content offerings from companies like Netflix and Hulu can drive displacement of content services traditionally offered through the CSP, along with their associated revenue streams.

While this could be perceived as a threat to traditional CSPs, there are also collaboration opportunities inherent to the Superplatform trend. For example, rather than attempt to compete with the unlimited content plans that Netflix offers, CSPs can offer tiered service rates that allow Netflix subscribers to stream their favorite shows without incurring expensive bandwidth consumption overages. This type of supporting tactic may lower the cost for the consumer and generate greater consumer choice, utilization, and satisfaction. For the CSP, this complementary “right-sized” pricing tactic can discourage customers from switching bandwidth providers, thereby securing customer loyalty and reliable revenue streams.

CSPs can benefit from the Superplatform trend in other ways. They can leverage the huge investments that Superplatforms are making in individual device offerings, for example, such as the large consumption models being built around devices like eReaders. CSPs can gain current and prospective eReader owners as new recurring customers by providing incentives for using these devices on the CSP’s broadband plans.

Communications service providers can also leverage greater innovation in integrating digital communities and retail models. Superplatforms have created innovative new ways to reach the digital consumer directly through various outlets, including social media. Apple customers can access extensive product information, and then purchase products and services through multiple digital channels.

By everywhere in the digital ecosystem their customers are, Apple builds its brand, increases consumer interactions and reduces its cost to serve. The Apple Store app, for instance, allows customers in Apple’s retail outlets to purchase an item through their mobile devices, email themselves the receipt and walk out the door without interacting with any sales professionals.

As CSPs leverage similar tactics, they may find current customers upgrading monthly plans because of the incremental new value they can provide.

The rise of Superplatforms may provide CSPs with the opportunity to create growth in new areas by learning from and collaborating with unlikely market partners. To gain customer loyalty and associated revenue streams in the increasingly convergent digital world, leveraging the Superplatform trend should be on the agenda of all CSPs.