Enhancing the Broadband User's Experience through Value-Added Services (VAS)

Value-Added Services (VAS) for broadband providers represent a suite of additional features or services that complement the basic internet connectivity offering. These services enhance the user experience, offer greater security, convenience, or entertainment, and can be a significant source of differentiation and revenue for internet service providers.

Many VAS offerings are made available to customers free of charge.

• Free services may be offered to ISPs’ entire customer bases or included in certain service tiers to help differentiate offerings. These services offer benefits including improved customer satisfaction, fewer truck rolls (in the case of technical support), and differentiation against competitors and other tiers of service.
• Adoption of paid services are more common among younger consumers, higher-earning households, those with children at home, and smart home households. Smart home households are particularly interested in smart Wi-Fi capabilities and remote access and automation tools, while parents are particularly interested in parental control capabilities and data use management tools.

The decline of traditional pay-TV and home phone have been ongoing for many years but are entering into a critical phase where services may no longer be worthwhile for smaller ISPs to maintain. To offset these declines, internet service providers are instead turning to alternative bundle types incorporating other service offerings. Leading cablecos have launched MVNO services incorporating mobility, which have met with success. They are also increasingly adding in new value-added services that build on their core value proposition of internet connectivity.

Parks Associates tests the following value-added services in its consumer surveys regularly.

1. A streaming video service
2. A technical support and monitoring service
3. A service that monitors or improves Wi-Fi in your home
4. A service that allows you to manage data use by connected devices in your home
5. A service that enhances parental control of online or mobile activities
6. Systems that allow you to access or control parts of your home remotely
7. A service that reduces ping time, latency, or lag when playing online video games
8. A whole-home cybersecurity service
9. Fall detection or health monitoring service

To better explain these services, we have defined these value-added services in the following ways:

• Streaming Video Service: This could include access to exclusive video content or partnerships with popular streaming platforms. ?
• Technical Support and Monitoring Service: Offers dedicated support for technical issues, and proactive monitoring of the network to ensure optimal performance. ?
• Service that Monitors or Improves Wi-Fi in Your Home: This could involve advanced router technology or software that optimizes Wi-Fi signal strength and distribution. ?
• Service that Allows You to Manage Data Use by Connected Devices in Your Home: This service helps users monitor and control how much data is being used by devices, ideal for plans with data caps. ?
• Service that Enhances Parental Control of Online or Mobile Activities: Provides tools for monitoring and restricting online content accessible to children. ?
• Systems that Allow You to Access or Control Parts of Your Home Remotely: Part of the broader smart home ecosystem, allowing control over lighting, temperature, security cameras, etc., from anywhere. ?
• Service that Reduces Ping Time, Latency, or Lag When Playing Online Video Games: Targeted at gamers, this service promises a smoother online gaming experience. ?
• Whole-Home Cybersecurity Service: Offers comprehensive protection against online threats for all devices connected to the home network. ?
• Fall Detection or Health Monitoring Service: Targets health-conscious individuals or those with medical needs, offering alerts and monitoring for falls or health metrics. ?

Streaming video services are the most widely adopted VAS with the most universal appeal.

Streaming video services are popular among all demographics of internet service subscribers regardless of age or income level. Those with children at home are somewhat more likely to receive streaming video from their ISP than those without children, but a large percentage of those without children still receive the service.

Other services are more highly adopted among the tech-forward segments of the population, including younger and higher-earning households as well as parents. Smart home households are particularly interested in VAS offerings, especially around home networking.

Smart home households and remote workers are two market segments that ISPs target heavily due to their need for quality internet connections and networking equipment.

This is an excerpt from Parks Associates s research Broadband: New Demands and Bundling Opportunities. This study assesses adoption of services and service bundling, service ARPU, upgrades and downgrades of broadband, and perception of broadband speeds received among US households. It also compares perceptions among various groups of consumers, including those with mobile data services.

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