Consolidated Communications is aware that the ongoing growth in broadband consumption will lend itself to a usage-based or metered model, but it won't make its move until it sees how other service providers offer such a service structure.
Echoing a sentiment made by Cincinnati Bell's CFO earlier this week, Bob Udell, CEO of Consolidated, told investors during the Wells Fargo Tech, Media and Telecom Conference that it has the platform in place to offer metered broadband when it's ready.
"Do I see broadband evolving quickly into a tiered or metered model where you pay for use or pay for bandwidth utilized? We have had that capability because we want to seize that opportunity, but we won't be a leader," Udell said. "We'll watch the market."
Like other wireline-centric service providers, Consolidated is seeing bandwidth utilization rise amongst its consumer customers.
Udell said that the popular perception that telcos can't keep up with cable is no longer true.
Being largely a provider that serves Tier 2 and Tier 3 markets, the service provider's last mile network can support 89 percent of its marketable homes with 20 Mbps while 41 percent can get 100 Mbps, and 8 percent can get 1 Gbps FTTH service.
"Our objective from two years back was to stay in front of the speed curve," Udell said. "I think the traditional telco gets painted with a brush that our network capacities can't keep up with the cable guys, but when it comes to those of us that are more regional in origin and had the discipline for investment across our markets that's a flawed assumption."
Consolidated also recognizes that the entrance of Google Fiber has caused service providers to rethink how they deliver broadband, it says that there's no immediate need for 1 Gbps.
Nevertheless, Consolidated is offering a 1 Gbps service in select markets as a way to be prepared to respond to customers that want those speeds now and in the future.
"When you look at the way we manage bandwidth, we knew ... that there was going to be disruption with the 1 Gbps offering. A lot of people said there's no demand for that and it's true," Udell said. "The average utilization on a monthly consumption is 80 to 100 gigabytes a month, and when you look at the average speeds per second it's still below 20 Mbps."
One of the differentiators that Consolidated is trying to bring to all of its tiers is Quality of Service (QoS).
By enabling QoS throughout its last-mile network, the service provider can offer a good experience for customers regardless of the speed they purchase.
"We want to stay in front of that [speed] curve, and we know that by having quality of service in our network -- which we have had had in our consumer broadband product for years -- it allows you to use bandwidth more effectively," Udell said. "A 10 or 20 Mbps product may feel like a 50 Mbps cable co product because of the way you managed the upstream and downstream and put voice and video in a higher tier for real-time delivery."
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