This year, the holidays had a different feel to them. Perhaps it was the endless box-office reports of sagging retail sales and predictions of massive retail closings and consolidations for 2009; or maybe it was the rash of layoff announcements; or possibly the black cloud hanging over the automobile industry. Regardless, consumers are being exceptionally cautious with their precious money as uncertainty lies ahead.

So what does this mean to telecom in 2009? We already are seeing accelerating consolidation of vendors and operators, as each tries to maximize their opportunities and reduce their costs. Startups will find it difficult to acquire funding and those that do will find it challenging to convince operators to take a chance on both their company and possibly their technology.

In these uncertain times, it is important and necessary to go back to the basics of business and realize the value of the customer. While new customer acquisition is certainly important, maintaining the existing customer base is equally if not more critical to long-term success. And with a strong competitive environment, it becomes a question of “what have you done for me lately?”

Customers don’t like to switch service providers. Perhaps it is because for such a long time they never had the choice. Or maybe it is simply the pain, the backside factor of changing e-mails, and/or numbers or going through the painful installation process. But with incentives flowing freely, customers are looking at all opportunities to save a buck.

Maybe it is time for operators to put in place a rewards system for its customers to let them know how much they are appreciated — kind of like frequent flyer programs (when they used to be really good). These programs could provide incentives for customers to stay with their operator — such as free upgrades, features and VoD movies, priority call handling/customer service, or even discounts on new CPE. Regardless, it could go a long way toward developing a new path to customer loyalty or at least give the customer reason to think twice about switching. While this is not a new or novel ideal, perhaps its time finally has arrived.

Teresa Mastrangelo is principal analyst at broadbandtrends, a service of The Windsor Oaks Group LLC, which is an independent market research and consulting firm specializing in the coverage of network transformation activity related to broadband infrastructure and services, including IPTV, VoIP and NGN.

Global third-quarter broadband subscriber numbers for 2008 are in the house and so far, broadband services are proving immune to the global economic meltdown. Quarter-over-quarter growth was up slightly and in line with typical seasonality for the third quarter. Surprisingly, the only broadband type to experience a slowdown was FTTH, as demand in Japan slowed during the quarter. Other broadband services, such as voice-over-broadband and IPTV services, continue to experience strong demand, with only small pockets of slowdown. So overall, it would be considered a good quarter for broadband growth.

The question is (and the one that I am asked frequently) whether this will continue. I can say that after reading quarterly reports from no less than 200 operators, there was scarcely a mention of any capex reductions for the current year and little, if any, talk of changes to next year’s capital spending plans. That’s good news for the rest of 2008, but things may prove differently going forward into 2009.

I can speak from personal experience that consumer concerns about spending went from cautious to frightened overnight during early October. It was immediately noticeable everywhere — the gym, restaurants, shopping malls, etc. Everyone is looking for a deal and that includes their telecommunication services. In just a one-week period, three people I know dropped their telco broadband and voice package and signed up for a less costly triple-play bundle from their cable operator, again proving the value of the bundle.

As consumers become more conscientious of their spending, it will be critical for operators to offer the best solutions to meet their needs. Similar to retail stores and automobile manufacturers, it will be necessary to offer discounts, free services and rebates in order to not only keep up demand, but also (and perhaps more importantly) reduce churn.

Otherwise, providers of fixed broadband services may find an increasingly challenging environment, especially as mobile broadband services and devices proliferate.

Teresa Mastrangelo is principal analyst at broadbandtrends, a service of The Windsor Oaks Group LLC, which is an independent market research and consulting firm specializing in the coverage of network transformation activity related to broadband infrastructure and services, including IPTV, VoIP and NGN.

This morning Verizon Communications Inc. (VZ) introduced a new term to the populous with Home Enterstayment – a term to describe families that are choosing to watch movies and shows at home ─ rather than an expensive night out. In fact, the term is so groundbreaking it hadn’t even made it into Wikipedia as of 4 p.m. EST on Nov. 3.

Lately, the media seems to be in portmanteau [to blend two (or more) words] overdrive as this word follows quickly on the heels of another annoying (and over used) portmanteau ─ “staycation” ─ not to mention those associated with celebrity couples or politics.

In the case of Verizon, it is using this term to promote new offers related to its FiOS TV service, primarily offering 90 days of free premium movie channels for signing up as a new customer by the end of the year, as well as discounts on its Home Media DVR product.

I’m not sure this term will find widespread adoption, especially since I could not find any other references to it on the Web. But my advice to Verizon would be to follow the K.I.S.S. principle and issue a press release that simply promotes its offers. Although the term did get my attention, it was for the wrong reasons, provoking a “you’ve got to be kidding” reaction.

Is it possible that since these families have chosen a “staycation” they might just have a little extra money to actually leave their house for entertainment? After all, the new Bond movie will only be shown in theatres. So if you want to save some money, go to a matinee and support your local theaters (and the economy) and not just Verizon.

Teresa Mastrangelo is principal analyst at [broadbandtrends, a service of The Windsor Oaks Group LLC, which is an independent market research and consulting firm specializing in the coverage of network transformation activity related to broadband infrastructure and services, including IPTV, VoIP and NGN.