Marketing Strategies Key In Increasing Broadband Take Rates

Posted: October 9, 2017

Eighty-seven percent of telcos consider free installation of fiber internet as their single biggest marketing promotion, according to a new survey by NTCA–The Rural Broadband Association.

Marketing plays a key role as companies try to win customers and to recoup the significant investment needed to deploy fiber. The NTCA survey provided insight into how telcos succeed:

Broadband marketing promotions

  • Packages of bundled services was considered key according to 84 percent of respondents.
  • Seventy-nine percent of providers use price promotions.
  • Other promotional efforts have less traction. Free modems, free introduction to a service, training classes, discounted computers or tablets, and free software are much less used.

Broadband take rate

The overall broadband take rate is about the same this year at 72 percent, compared to 73 percent last year. However, customers do want higher speeds, which is an advantage for companies with fiber-based networks.

For example, the number of customers subscribing to plans with download speeds of 25 Mbps or greater doubled, going from 8 percent to 17 percent. Similarly, the number of customers using between 1 Mbps and 4 Mbps connections dropped this year, going from 16 percent to 12 percent.

While the take rate has not shifted dramatically, providers work toward gains as they hope to recoup some of the deployment costs. Pricing remains a challenge, and the study offered perspective on national trends:

Typical charges of NTCA members

  • Most fiber-based broadband services cost between $39.95 and $59.95 per month.
  • The broadband take rate for customers who have 25 Mbps or higher is about 17 percent. The highest take rate is 24 percent, for customers who have between 10 and 25 Mbps.
  • Almost every provider who took the survey says they face competition from at least one other service provider in some portion of their service area. They compete with national ISPs, fixed and/or mobile wireless internet providers and satellite broadband providers.
  • Cable companies, electric utilities, local ISPs and neighboring cooperatives also are potential competitors.Most providers realize it will take time to recover the build-out costs. Increasing the take rates will help, and that’s the goal of most marketing departments.