More providers = more choice = less provider investment or more owner investment…..where is the balance point?

More providers = more choice = less provider investment or more owner investment…..where is the balance point?

It is very typical that one provider is granted exclusive marketing rights at an MDU.  In doing so, an owner can maximize the available financial incentives from that provider and/or the provider will maximize the amount of capex it is willing to dole out on a new build property.  If your exclusive marketing agreement is with an incumbent cable operator or alternative private operator, chances are the telco is also providing services to your property.  Whether or not the telco has deployed or will deploy advanced services depends largely on property demographics, construction costs and demand.  In many existing properties, residents in this situation are left with triple play services from an incumbent cable operator and telephone/dsl from the telco.  In those instances where a telco would slowly build out advanced services based on demand and demographics, the property owner would be left both without financial consideration on those advanced services and without an agreement that controls their access and marketing rights.

 The opposite can also hold true.  In situations where a property owner grants marketing rights (in this case non-exclusive) to more than one provider, they can ensure that they have triple play advanced services available to their residents from two or more providers, for example the incumbent cable operator and incumbent telco.  This adds an additional element of complexity, while at the same time adds more choice for your residents.  You can layer on even more complexity, by bringing in a DirecTV or Dish Network reseller, to install one or more dishes to serve your property, thereby eliminating the need for unsightly dishes.  Unfortunately, the byproduct of all of this added choice is likely less provider financial incentives or capex a provider is willing to assign to building out the communication system at your new build property.

So the obvious question is:  where is the balance point.  This question is not so easily answered, and must be addressed using both objective and subjective criteria.  In the end, a property owner needs to find the delicate balance between multiple providers/more choice and the corresponding financial constraints that makes sense for their specific situation