Customer service should come first, says Sickinghe

Expanding its activities in the mobile market and ensuring customer service remains at the forefront of its concerns will be the prime strategic marketing objectives of Belgian cable operator Telenet, CEO Duco Sickinghe told the CTAM Europe cable marketing conference in Lisbon yesterday.

“The most important metrics at Telenet are not financial. They are customer-related,” Sickinghe told attendees at the conference. He said that 40% of Telenet staff bonuses were based on customer satisfaction, giving employees a direct incentive to make sure customers remained at the centre of their concerns. Customer care, support for community initiatives and a marketing strategy (built around Telenet’s “Shake” concept) that communicated the benefits of triple-play in a way that consumers can understand had enabled the operator to build market share in Flanders. Sickinghe pointed out that Telenet had originally been set up to deliver broadband only and had never had the comfort of a strong legacy cash-flow base from CATV access.

Sickinghe said the main competitive threat to Telenet came from mobile, and in particular from Proximus, the mobile arm of incumbent telco Belgacom. He said that about half of Telenet’s customers took mobile services from Proximus, which left the operator vulnerable to the threat of bundled mobile-broadband offers. This lay behind Telenet’s decision to establish itself as a full MVNO and also to bid for 3G and 4G mobile spectrum when it becomes available next year. He said that the company would be able to continue to provide “pure-play” cable metrics to its investors while investing separately in mobile. Once it acquired spectrum it would be able to offset the cost of building a network infrastructure by sharing the costs with partners.

In a wide-ranging keynote speech, Sickinghe also said that a price-based competitive strategy for a capital expenditure-intensive business like cable was “suicidal” and argued that HDTV would give cable a strong competitive advantage against ADSL. He also said that Telenet had put interactive capability at the centre of its TV strategy, as Flemish subscribers were not interested in “hundreds of foreign channels”, and that he did not believe that over-the-top web-based TV would be a major competitive threat, as broadcasters were recognizing that they could not make money from it and would withhold rights according to their commercial interests.