The Planning Fallacy: Why Broadband Providers Miscalculate Time and Costs – And How to Fix It

By: Tom Lasonde | Read Time: 6 mins.

What It Is: The planning fallacy is a cognitive bias that causes businesses across industries to underestimate the time, cost, and resources needed to complete projects, from infrastructure builds to product launches. This bias leads to overly optimistic predictions, often resulting in unexpected delays and budget overruns. In the broadband industry, this can manifest in underestimating network expansion timelines, product rollouts, and responses to market competition, causing financial strain and operational inefficiencies.

The term “The Planning Fallacy” was first coined by psychologists Daniel Kahneman and Amos Tversky, describing the cognitive bias that leads individuals and organizations to underestimate time, costs, and risks associated with projects.

Why It Happens: The root cause of the planning fallacy is optimism bias—the tendency to believe that projects will go smoothly and according to plan. Several psychological and industry-specific factors reinforce this bias:

• Ignoring historical data – BSPs may assume that a network expansion or market entry will proceed without major setbacks, even when past deployments suggest otherwise.
• Anchoring bias – Initial estimates often set unrealistic expectations that become difficult to revise, even as obstacles arise.
• Social pressures – Leadership, investors, board members, and stakeholders push for aggressive timelines, making teams reluctant to adjust their forecasts.
• Failure to account for unexpected challenges – Regulatory hurdles, supply chain delays, permitting issues, and workforce shortages frequently disrupt even the best-laid plans.

Real-World Examples: Our team has explored reasons behind this common challenge, examined real-world examples from our industry and identified four easy strategies to help you avoid this common pitfall.

• Example #1 – Competitive Response Strategies: Competition is an ever-evolving challenge. Competitors frequently tweak their product capabilities, pricing tactics, and advertising messaging. Sometimes, a competitor may drop a major product, such as video, or enter or exit a market entirely. BSPs often underestimate the impact of these shifts, and the response time needed to adjust pricing, upgrade service offerings, and improve customer retention efforts. When a reactive strategy is implemented, the competitor has gained significant market share.
• Example #2 – Video Product Launches: BSPs launching new streaming or IPTV video services often assume a quick go-to-market process. However, these launches can significantly affect the customer experience. Most people resist change, so operators must support adopting new platforms while smoothly retiring legacy systems. To ensure success, operators should conduct a deep dive into customer experience and identify various use cases that must be addressed. Using this knowledge, they should carefully design the packaging, pricing, and internal and external communication plans to maximize customer engagement and minimize churn.
• Example #3 – Fiber Network Expansions: Many BSPs are embarking on fiber network expansions in 2025. While the technical and construction challenges are significant, operators often underestimate the business planning needed to maximize the opportunity fully. A successful operator will develop a comprehensive marketing strategy before and during the launch phase, conduct a thorough competitive analysis, and structure pricing and packaging based on these insights. Beyond that, top-performing operators invest in training sales representatives to match each customer with the optimal service package, ensuring a seamless customer experience and long-term satisfaction.

How to avoid the planning fallacy: BSPs can mitigate the planning fallacy by shifting from intuition-based estimates to data-driven planning. Here’s how:

1. Get external perspectives – Engaging external experts can be invaluable for major projects or strategic initiatives. Industry professionals with firsthand experience can offer insights that help anticipate challenges and navigate complexities, reducing the risk of falling into common planning biases that can derail efforts.
2. Break down large projects – Segment network expansion, service rollouts, and competitive responses into smaller, more manageable tasks.
3. Plan for contingencies – Instead of assuming smooth execution, incorporate buffer time and contingency budgets for unexpected challenges.
4. Regularly Reassess and Adjust – Establish checkpoints throughout a project to revise timelines and budgets based on actual progress. A best practice for broadband providers is to conduct a quarterly competitive intelligence review. Clients who adopt this approach can proactively respond to shifts in the competitive landscape, ensuring that pricing, service offerings, and market positioning remain optimized.

The bottom line: BSPs operate in a fast-moving and highly competitive landscape where underestimating project timelines and costs can have significant financial consequences.

• By recognizing the planning fallacy and implementing structured planning techniques, BSPs can create more realistic timelines and budgets—leading to greater efficiency, fewer surprises, and improved profitability.

We offer BSPs a free consultation to explore strategies, discuss potential challenges, and examine initial timelines and budgets.