We were talking to an old friend at a big broadband equipment vendor (Calix) recently, and he put an idea into our heads - what if telcos looked beyond high speed Internet (HSI) services and deployed broadband connections to their customers for other services without requiring Internet?

Now this isn’t a brand new idea - vendors building broadband equipment for “neighborhood node”/DLC  deployments - have long trumpeted the concept of enabling broadband on every line and for any service. Indeed, the trend for this sort of equipment (and a big part of Calix’s value prop) is to make access concentrator devices flexible enough to provide any service on any port - POTS, various DSL flavors or even fiber.

The logical outgrowth of deploying such equipment is that getting a broadband connection into any particular customer’s premises won’t take a lot of extra Capex or Opex. In fact, there might be cost and operational advantages to “turning on” broadband to all customers up front rather than waiting for customers to sign up for HSI services.

Here’s the logic: for most telcos, HSI subscribers make up 10% or 20% of customer base (more or less - depending upon the level of cable competition, etc.);  Almost 100% of customers, on the other hand, subscribe to voice services. Getting more of those voice customers to try out HSI has been the primary marketing challenge for years now - and one that often required big “giveaways” like free modems, free installation, months of highly discounted service, etc. Even with all of these “freebies,” telcos face lower-than-desired take rates and relatively high churn for their HSI services.

But the advent of cheap (for both the provider and the customer), reliable, and feature-rich VoIP services gives telcos a reason to get broadband up and running to customers who’ve not yet taken the leap and decided that they really need high-speed Internet.  In this scenario, VoIP becomes almost a Trojan horse - a platform from which other broadband-enabled services can flow.

Now of course, deploying VoIP to existing voice-only customers will require some investment from telcos - but there are gains to be had for the telco. In terms of the voice service itself, telcos can benefit from the lowered costs of an IP infrastructure, while simultaneously offering customers a more feature-competitive voice service that matches what cable multiple system operators (MSO) (not to mention pure play VoIP providers) are making available to consumers.