While the race to the bottom has the potential to cripple profits margins, the race to the top has the potential to cripple brand credibility, as telcos continue to outgun each other with broadband speeds.
The UK Virgin Media team is now claiming to deliver ultrafast speeds as standard, with new packages available from March starting at 100 Mbps and rising to 200 Mbps for consumers, and 300 Mbps for business customers. The offer will certainly put the squeeze on competitors, who have to rely on Openreach infrastructure unlike Virgin Media, with the team claiming the current widely-available Openreach top speed is 76 Mbps.
“By beefing up our bundles we’re leaving our competitors in the rear view mirror, starting where they finish,” said Tom Mockridge, CEO of Virgin Media. “Eye-watering speeds, a better box and top-notch TV is a winning combination.
“More and more switchers tell us they are joining Virgin Media for our faster speeds and we understand why – whether it’s 4K Netflix, box sets in multiple rooms or online gaming, the best entertainment requires the best broadband and we’re making sure our customers are covered with these bundles at incredible value.”
It certainly sounds like an interesting marketing campaign, one which will attract attention of the impatient and data-hungry customer, however the clever use of ‘up to’ has the potential to rile up customers. This has been a sore point in broadband advertising for some time, with various campaigners calling for a review of the practise.
Under current advertising rules, Virgin Media can claim speeds up to 200 Mbps should it be able to prove 10% of customers can experience these speeds. As for the other 90%, who cares apparently. Whether Virgin Media is relying on this convenient advertising rule or whether it can actually deliver those speeds for a suitable percentage of customers remains to be seen.
That said, if experience is anything to go by, your correspondent is sceptical and has a suspicion this is the work of the marketing department, playing a game of one-upmanship with competitors. How much of an impact these competitive advertising campaigns have on brand credibility in the long-run is unknown for the moment, though operators are hardly the most trusted brands in the UK currently.
Openreach must be dreading these reports however. After a prolonged separation from BT Group, the last thing the wholesaler needed was another stick handed to the ‘Fix Britain’s Internet’ campaign. Over the next couple of days, you can expect numerous statements from the likes of Sky, Three, TalkTalk, Vodafone and the ever moaning CityFibre, comparing Openreach and its upgrade strategies to Satan himself. What more can we expect from companies who have made a habit of attacking the credibility of others as opposed to building their own brand equity.
With Amazon and Google launching smart home initiatives, have the telcos missed out on their chance to cash in on this market?
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