AT&T announced the launch of ConnecTech, a bold move into the home tech support market, and a direct shot across the bow of competing services from Best Buy, Circuit City, and others. ConnecTech will offer “television and home theater installation and personal computer and home network setup, plus an extensive list of repair services.” Home tech support services are growing among the telecom service provider community. Both large and small carriers are seeing the natural evolution of supporting customers in the home with the entertainment and broadband solutions they are increasingly marketing. Rather than just selling a service, these types of support services allow service providers to strengthen customer relationships by helping simplify the growing complexity of installing and managing entertainment and broadband products and services. Of course they also hope to gain some competitive advantage, and make a little money at it too.

It remains to be seen if this is a good business move from a dollars and sense point of view. But I do believe this is a smart move from a competitive positioning point of view. Despite all the cool applications that broadband and entertainment convergence products can do, they can create potential areas of frustration with customers. The average customer has no interest in configuring their wireless router, but they do have an interest in enjoying the experience and convenience a properly configured wireless router can deliver. Service providers that enable that experience and convenience only strengthen their relationship with customers, as well as enhance their brand and visibility. These types of enhancements also strengthen a service provider’s ability to effectively compete. Of course all of these benefits are only won if the tech support service works. By that I mean, technicians show up on time, calls to customer service are answered quickly (and by human beings), and technical problems are resolved to customer’s satisfaction the first time. If expectations are poorly met, these tech support services could backfire and do just the opposite – weaken customer relationships and brand equity. Moral of the story – if you launch these services – make sure they work - the first time. If not, you’re better off without them.

According to a recent survey conducted by Rubicon Consulting, 47% of iPhone users switched wireless carriers to AT&T to gain access to the iPhone. That equates to 1.4 million new accounts for AT&T, which possibly would not be with them if not for the iPhone. That’s a nice weapon to have in your arsenal (I wonder how many of those new customers are former disgruntled Sprint customers). Another encouraging metric for AT&T is the incremental revenue generated by existing AT&T customer who upgraded to an iPhone plan, which according to Rubicon’s survey results, equates to $19/month. If you believe Rubicon’s math, AT&T’s 3 million iPhone customers now contribute an additional $2 billion/year for AT&T (although a hefty sum of that figure is revenue shared with Apple).

The iPhone experiment has proven that a wireless device, and its manufacturer, can move markets. Prior to the iPhone, the prevailing thought was wireless carriers needed to heavily subsidize devices, or consumers would not adopt them. So much for that line of thinking. Make the right device with the right features and millions will line up, regardless of carrier and subsidy. Look for a string of competitors to try to imitate this enviable success.

If you take a look at AT&T’s latest quarterly numbers, you have to be impressed with the apparent competitive advantage that the iPhone has given them, at least initially. They added 6 million gross wireless subscribers, which is the best on record for quarterly growth in the wireless industry. That beat their 2006 4th quarter comparative number by almost 10%. They had a total net addition of 2.7 million subscribers, 1.2 million of which were postpaid net additions, which amounts to an impressive 37% gain from the previous year’s 4th quarter, also a record. Churn was also reduced by 10 basis points from the previous year’s 4th quarter. At the end of the 4th quarter, AT&T had 2 million iPhone customers. AT&T claims that 40% of those current iPhone customers came to AT&T from other carriers.

It’s somewhat difficult to draw comparisons to their chief rival Verizon, because Verizon won’t report 4th quarter results until January 28th. But it’s safe to say that the iPhone had a definite positive impact on their record growth numbers and provided them a solid competitive advantage. Its impact will surely grow as well, because AT&T reported that wireless data revenue grew by 57% and now represents 20% of their total wireless revenue and $12/month of wireless ARPU. The iPhone is a data heavy device and will only add to these data numbers. Early returns look good for AT&T and their decision to become the exclusive iPhone retailer.

Cable MSOs are now beginning to roll out on screen caller ID into their video packages. The service provides a screen pop on the television, identifying incoming caller information. Cable MSOs are now beginning to realize what many smaller IPTV players learned long ago. On screen caller ID is an inexpensive, yet valuable competitive differentiator. It’s one of those applications that was developed with little fanfare in the beginning, but early adopting IPTV operators soon began to realize how valuable it was. Consumers love it, and many a smaller video provider has used it as effective bait to lure subscribers away from both cable and DBS operators. Looks like the secret is out. Smaller cable companies like Wide Open West have recently launched the service. Comcast says it will make the service available in the next 12 – 18 months.

Read this Cable360Net post for more details.