Yorkshire challenger Connexin tag-teaming Calix to unlock SME as ‘experience provider’

Furqan Alamgir is no fan of altnet.

Or rather, the CEO and founder of Yorkshire-based network builder and service innovator Connexin has no affinity with the term as a descriptor of businesses such as his. For Alamgir, the tag does not even scratch the surface of the most important element of his business — delivering distinct, valued services to consumers and organisations.

Speaking at the Connected North event in Manchester, UK, he used his presentation to emphasise a purpose‑driven perspective on the role of network players. This is not a feelgood mission statement, but a deeply considered move to template a successful business model for the challenger broadband network service provider sector, and a wake-up call to peers that may be too obsessed with rollout, take‑up and connectivity speed metrics to develop a sustainable strategy.

“ Building a network is just the beginning: it’s about asking ‘what does that network do, and what can we do with it?’. ” 

Alamgir.

For Connexin, answering this question involves going beyond “dumb infrastructure”, to leverage the optical network terminal (ONT) equipment deployed in customer’s premises — to provide added value services beyond connectivity through a sophisticated, flexible platform layer.

Enter Calix.

From its early infrastructure‑building days, Connexin has worked with the US‑based communications‑focused platform provider, with a partnership that has evolved to enable the Hull-based challenger to develop relationships with, and services for, end‑users that start rather than end with installation of a router.

Platform approach bringing hard cash rewards and SME opportunity

The Connexin CEO said the numbers are proving the value of this approach, with average revenue per user (ARPU) in excess of £40‑per‑month (€46/$50), considerably above more usual UK service provider levels that sit between £20 and £30, with take‑up rates on bundles up 80% since the introduction of SmartHome. Connexin has also seen impressive 50% uplift in overall ARPU and a 70% reduction in post-install visits.

Provision of added value services is said to make for stickier customers, too, with retention rates considered industry‑leading, and the service provider performing well against a public scale both courted and feared by retail players — Trustpilot.  

Alamgir, however, considers that too few altnets are looking to this experiential approach to building their businesses, focused instead on “spreadsheets and talk about ‘homes passed’ and ‘take‑up rates’”.

Connexin’s platform‑based and service‑led approach is also being applied in the SME sector, which Connexin sees as a significant opportunity in the UK market, and one currently under‑exploited by the altnet community.

Calix champions the merits of becoming an “experience provider”

Also speaking at Connect North was Eoin Heaney, International Vice‑President for Calix, who reinforced Alamgir’s views on the most effective way to create value and stand out in the UK market.

Drawing on the Calix’s own transformation, which has seen it evolve from a hardware focus to become a cloud platform provider, and a history supporting challengers in the US market including Lumos Fibre and United Fiber, Heaney drove home the message that user experience is a key differentiator for ambitious service providers targeting both consumer and business customers, and that this can be best achieved through a software platform approach.

Heaney is upbeat on the “major achievement” of the UK’s altnet sector in accelerating build in recent years, but less so when it comes to marketing — “we really need to reset the industry”.

Foreseeing a future in the next few years when fibre will be ubiquitous, he considers that the current obsession with selling based on connection speeds will need to take a back seat.

The current limited engagement with customers seen from many altnets is having an impact on Net Promoter Scores across the industry, with Heaney ruefully noting the sector average is “not much better than the airline business”, which operates in negative NPS territory. The average score of 15 for service providers “does not reflect the value that the industry is creating”, he says.

To address this, Heaney believes the market needs to “move from being ‘connectivity providers’ to being ‘experience providers’”. Key to achieving this transition, says Calix’s international leader, is making the most of the troves of data that are available to service providers to identify and support the needs of end‑users.

Echoing the words of Alamgir and the Connexin strategy, he notes that service providers “know everything about your subscribers; you just need the right platform to be able to extract those insights and use those insights and actually market effectively and communicate effectively to your subscriber base”.

Heaney guides that Calix is already seeing the impact of this persona‑focused approach in the US market. “We have operators that don’t market speed at all”, he says, with marketing homing in on the personas they want to address with new products.

This is translating to “huge ARPU growth”, according to the Calix VP, citing a partner that sees 80% of its subscriptions coming from persona‑based solutions, which in turn is fuelling 15% ARPU uplift.

This approach cannot be isolated, however, and demands a long‑term philosophy. “Where we innovate, we have to continue to innovate”, says Heaney, pointing out that, what might be considered a novel differential today, can quickly become industry standard once its value is demonstrated.

“ You have to continue to innovate service level so that you actually do continue to add value in the context of the services you are offering subscribers… you monetise those services based on understanding your subscriber and talking to them in the language they understand. ”

Heaney.