A Value-added Services Roadmap - Think "Hand-holding"

Today's press release from Radialpoint Inc. serves as a good reminder that - in the end - a little customer TLC may in fact be a value-added services offering! Amid all of the ado about "triple-play," "quad-play," and fixed-mobile convergence (FMC) solutions, there are business models being built around customer care and support.

Radialpoint has developed a business that helps broadband service providers deploy value-added services to their subscribers in a simplified manner. Right now, the company's emphasis is on Internet security enhancements, including parental controls, anti-spyware and anti-spam, and fraud protection. It has some well-known service provider customers, including Bell Canada, Aliant Telecom, BellSouth (AT&T), Verizon, Adelphia, ONO, and Ntl.

Today, Radialpoint announced some updates to its service in Radialpoint Security Services version 6.0. In addition to In addition to full Windows Vista™ compatibility and security enhancements across all core services, Radialpoint Security Services 6.0 also introduces two new services - PC Optimizer and Backup & Restore - to address consumer concerns regarding computer slowdown and data loss. Given Radialpoint's history in providing carrier-based solutions, the PC Optmizer and Backup & Restore functionality is a nice enhancement.

The data we're getting back from the industry on customer service support calls to service providers is significant. About one-half of calls to a service provider's help desk are "out-of-scope," meaning they're not connectivity related. If a help desk agent can ping a customer's modem and get a good response, then his or her job is finished. There are two problems with this scenario, however:

1. 1. A customer calling because of "slow Internet" service may have some unseen and unknown issue with an Internet cache that needs to be emptied or a C drive that may need to be defragmented. The customer service agent can't help with this in a proactive manner; and
2. Despite the fact that the help desk agent logged the call as "out-of-scope," it took anywhere from 9-25 minutes for the service provider to deal with that customer. That's extra cost, and it hits directly at the bottom line of a service provider that absolutely has to focus on the bottom line - increasing ARPU per customer, reducing churn, and attracting new customers in a highly-competitive landscape.

In addition, the maximization of potential revenues from value-added services can surely be supplemented with a back-up and safekeeping service for customer's data and multimedia files. Our own research (Managing the Digital Home: Installation and Support Services) indicates that there are specific segments of consumers willing to pay for online storage. Verizon recently announced a service called Verizon Online Backup that is aimed at small- and medium-sized businesses. We imagine that this type of service will trickle-down to more mainstream consumers in the next few years.

Amid all of the excitement that the digital home landscape offers, our advice is this: companies have much to gain by offering consumers some very basic and pragmatic services, and Internet security and backup are two key areas that are certainly targets. As recent reports such as Broadband Market Updates have indicated, there is money being left on the table without clear offerings. Consumers have indicated that they're willing to accept a certain amount of hand-holding and enhanced customer care, and there are businesses to be built around such support. We expect to see more announcements along these lines in 2007.