At this year’s European FttH Summit in Munich Benoit Felton presented some research on the different market approaches adopted by a broad spectrum of established European NGA project. His work identified that successful projects make a conscious decision to either to aggressively develop market share or to adopt a premium position in the market.

As a rule of thumb, many incumbents tend to prefer a premium position for their NGA services as a means of managing their transition from their existing first generation services, while new entrant NGA providers were more varied in their approaches. But one thing was clear from Benoit’s findings – successful NGA schemes need to be very clear about which approach to adopt; sitting on the fence or having an ambiguous market strategy is a mistake.

I decided to write this up now for two linked reasons reasons. At the moment many Local Authorities across the UK are starting to contemplate the reality of delivering their Local Broadband Plans which will include demand stimulation and community engagement. Secondly, there are a growing number local schemes either starting out or in advanced stages of development at the moment.

For both groups understanding the importance of Benoit’s findings is a first important stage.

• For local authorities contemplating demand stimulation and galvanising their communities to maximum effect, while understanding the market position of their likely delivery partners will provide a critical insight into what its reasonable for their chosen partner to do, and where their own demand programme will need to focus;
• Community-based schemes generally would be suicidal to adopt an exclusive premium position within their towns and villages, so starting to consider how to optimise their market footprint will be critical to their success.

So what is it that defines a premium market position and separates it from an acquisitive one?

A common error that people in the technology sector make is to forget that there are other people than technophiles – that market’s contain more than just innovators. Every once in a while its worth pulling out a “Marketing 101″ crib sheet and  reminding ourselves of Everett Rogers ”Diffusion of Innovations” model.

A premium market position is one that squarely attracts the “Innovators” and “Early Adopters” – here bandwidth sells. Simple messages that liberally mention fibre and big headline speeds are all that really matter:

“All you need to know is you get a Gig”

This is the message that reaches the people who happily queued all night for the iPad 3 when they already had iPad’s 1 & 2 – technology as a religion!

This approach is likely to reach the dizzy heights of perhaps 20% take-up – something an established company managing the migration from existing, lower-cost services would be happy with as a base-camp position but is likely to be unsustainable for anyone else.

Everyone else needs a reason to buy NGA. Most people aren’t moved by gigabits or have a view on the glass v copper debate. For these people its all about services – what you can do with it.

For Rogers’ “Early Majority”, that’s easy – these are typically adept users of technology and avid consumers of media. Content providers like Netflix and Love Films, and the greater responsiveness of the PlayStation Network are already making a good start with an embarrassment of riches coming down the line from the cloud. Reaching these customers is also not complex – many in the Early Majority will be on Facebook and Twitter so developing a dialogue is not difficult.

Persuading the Early Adopters and the Early Majority will help you reach break-even on a typical fibre project but it won’t get you into profit. For that you need to reach out to the “Late Majority”. This is a group of society that are less comfortable with technology and will often be quite utilitarian in their uses – on-line banking, booking a holiday, Tesco on-line orders, and so on. This group may already view today’s average broadband speeds as excessive – here not only doesn’t bandwidth sell, it may actually be a turn off.

However, a key constituents of the Late Majority will typically be older people and people on lower incomes; the kinds of groups that are more likely to be users of public services. The transformation of public services is the single most important way to attracting the Late Majority to technology in general and especially NGA networks.

Healthcare and independent living solutions that enable people to stay in their rural homes longer, and education programmes aiming to raise the ambitions of children and help adults back into work will be key to encouraging the Late Majority to go on-line. The flexibility and power of the experience that can be delivered by NGA networks makes this, to enlightened innovators, a far better starting point for developing novel services than first generation broadband – but get it wrong and the damage will be much longer lasting than if you get your media play slightly wrong for the Early Majority.

So Local Authorities looking to develop effective demand stimulation programmes could do much worse than look to the way they deliver their own services first – reach out to the Late Majority yourself and push your delivery partners to reach the Innovators and Early Majority, something they should naturally do well. Not only will you deliver much better take-up levels and secure economic outcomes, you may also save money!

And for community-led schemes. The term may have gone out of fashion already but this is Big Society territory.

Develop a fast broadband service, mould it into a triple-play bundle but then focus on local services - things that actually make a difference to people. Sell your triple play – market your local services.

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