Fixed broadband: “Nothing more than backhaul” for consumers and SMEs, says Spark CEO

Spark held an investor update today 30 June, bombarding shareholders with around 120 slides detailing the market forces and trends underpinning its thinking for the next phase of transformation, its game-plans for competing, its approach to network investment and the impact of these on its longer-term financial and organisational aspirations.

CEO Simon Moutter opened by telling shareholders that Spark had transformed from being an international telco to a digital services company, that a digital customer experience was the “new source of market power” and that Spark still had a way to go.

“Customers want wireless everywhere and fixed broadband is nothing more than backhaul to a wireless hub (WiFi) in most consumer and SME situations,” Moutter said.

He said that, by 2020, Spark hoped to be “Mostly ex-copper, enabled by pervasive 4G and 5G wireless coverage and capability, together with rapid adoption of fibre access in urban areas [and] taking advantage of disruptive technologies like virtual assistants and machine learning at scale, to improve our business and better serve our customers.”

One example of this was given by Dr Claire Barber, CDO Spark Platforms, who revealed that Spark had been using ‘Tinkerbot’, “a first edition artificial intelligence robot trained by our customer-facing engineers, proactively looking for customers experiencing poor broadband performance and diagnosing and resolving their issue.” She said Tinkerbot had reduced call handling time and work effort by 40-60 percent.

Moutter said Spark’s strategy was being driven by three key insights: rapid advances in wireless capability and economics, together with scale uptake of mobile apps, meant customers are now strongly preferring wireless connectivity and digital self service; a larger than expected portion of the market is buying primarily on price, fuelling price competition and consequent margin pressure; reduction of unit costs to date has been good, but not enough for the future.

He said Spark needed to be better at serving price-sensitive customers by further developing its multi-brand strategy and must become “the lowest cost operator through radically simplified and digitised processes, products and services.”