Quadruple-Play Bundling Strategies Margaret Hopkins with Helen Nierinck, Alex Skeaping and Phil Todd Edited by Mark Chambers
Analysys Research Fixed Networks and Services Analysys Research Fixed Networks and Services online market intelligence service The Acceleration of Fixed Mobile Substitution in Western Europe: facts and figures Business Data Services: growth opportunities and forecasts for Europe 2007 12 Prospects for Local Loop Unbundling and Bitstream in Central and Eastern Europe European Cable: strategies for success Fixed Mobile Convergence in the Enterprise Voice Market Strategies for Selling More to SMEs: analysis of demand for broadband managed services and service bundles Fixed Mobile Substitution in Western Europe: causes and effects Opportunities for Non-traditional Players in Communications Markets Beyond Triple Play: forecasts for broadband valueadded services The Competitive Dynamics of DSL in Western Europe: prospects for local loop unbundling and bitstream Mobile Networks and Services Analysys Research Mobile Networks and Services online market intelligence service The Western European Mobile Market: trends and forecasts 2007 12 The Middle Eastern Mobile Market: trends and forecasts 2007 12 Seizing the Opportunities from Enterprise Mobility The Future of the Global Wireless Industry: scenarios for 2007 12 The World s Top Ten Non-voice Services for Mobile Operators Picocells and Femtocells: will indoor base stations transform the telecoms industry? Mobile Operator Strategies for Fixed Broadband Strategies for MVNOs Mobile Number Portability: strategies for operators and regulators Person-to-Person Mobile Messaging in Western Europe: forecasts and analysis 2006 11 Mobile Operator Performance: ARPU, churn, diversification and globalisation The Business Case for WiMAX The US Mobile Market: trends and forecasts 2006 11 Next-Generation Telecoms IT Analysys Research Next-Generation Telecoms IT online market intelligence service Billing and OSS Trends: the transition to telecoms IT The Next-Generation Bill: commercial and technical strategies World Telecoms BSS and OSS Markets: trends and analysis Published by Analysys Research Limited St Giles Court 24 Castle Street Cambridge CB3 0AJ UK Tel: +44 (0)1223 460600 Fax: +44 (0)1223 452800 Email: research@analysys.com http://research.analysys.com Registered in England No. 3977996 Analysys Research Limited 2007 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without the prior written permission of the publisher. ISBN 1 905495 47 1 September 2007
Contents 0 Summary ix 1 Multi-play strategies are a response to convergence 1 1.1 A multi-play package markets telecoms and entertainment together as a single product that aims to be greater than the sum of its parts 2 1.2 Families have limited budgets, of which multi-play packages aim to take an increased share 4 1.3 Some elements of multi-play packages are targeted towards families, while others are aimed towards individuals 7 1.4 Telecoms and media players approach the multi-play market with different strengths 12 2 Adding video to a telecoms portfolio is more difficult than adding telephony to a TV package 15 2.1 Pay-TV players own popular TV content, and can easily buy voice minutes 16 2.2 Fixed telecoms operators have to contend with a steep learning curve when launching video services 19 2.3 Mobile operators aim to eliminate the fixed telco from the home 22 3 Selected country profiles 25 3.1 Australia s incumbent continues to dominate the country s market 27 3.2 Bundled services are at the forefront of Austrian operators strategies 29 3.3 Fixed-line penetration has halved in five years in the Czech Republic 32 3.4 France has a particularly strong triple-play market 34 3.5 Operators in Hong Kong are pioneering IPTV and ultra-fast broadband services 37 3.6 Competition in Sweden has focused on speed rather than bundles 39 3.7 The UK has the highest pay-tv ARPU in Europe 42 3.8 US incumbents are planning ambitious fibre deployments 45 3.9 Other countries that have, or will soon have, quadruple-play bundles 49 4 The five key lessons for building a successful quadruple-play strategy 50 4.1 Triple-play bundles work, but quadruple-play packages are not yet proven 50 4.2 Quadruple-play bundles are about survival in the short term and positioning for the long term 52 Analysys Research Limited 2007 Contents
iv Quadruple-Play Bundling Strategies 4.3 Not all markets are ready for a quadruple-play package 54 4.4 Quadruple-play bundles are a commercial imperative in the long term 55 4.5 Quadruple-play packages are not easy to develop or market 55 Actions 59 Market intelligence services from Analysys Research 61 Reports from Analysys Research 62 Custom Research: meeting your information needs 63 Analysys Consulting 64 List of Figures and Tables Figure 1.1: Elements of a quadruple-play bundle 3 Figure 1.2: The benefits of a multi-play bundle 4 Figure 1.3: Share of family expenditure on telecoms and media in the UK, 1999 2005 Figure 1.4: Share of family expenditure on telecoms and media in Italy, 2001 4 5 6 Figure 1.5: Share of family expenditure on telecoms and media in France, 1999 2004 7 Figure 1.6: Different players abilities to deliver the elements of a quadruple-play bundle 13 Table 2.1: Multi-play SWOT analysis for cable and satellite operators 17 Figure 2.1: Revenue generated from popular and long-tail content 18 Table 2.2: Multi-play SWOT analysis for incumbents 20 Table 2.3: Multi-play SWOT analysis for new fibre operators and unbundlers 21 Table 2.4: Multi-play SWOT analysis for mobile operators 23 Table 3.1: Services offered by the primary telecoms operators in Australia 27 Table 3.2: Selected multi-play offers in Australia 28 Figure 3.1: Timeline of broadband bundles in Australia 29 Table 3.3: Services offered by the primary telecoms operators in Austria 30 Figure 3.2: Timeline of broadband bundles in Austria 30 Table 3.4: Selected multi-play offers in Austria 31 Table 3.5: Services offered by the primary telecoms operators in the Czech Republic 32 Figure 3.3: Timeline of broadband bundles in the Czech Republic 33 Table 3.6: Selected multi-play offers in the Czech Republic 34 Table 3.7: Services offered by the primary telecoms operators in France 35 Figure 3.4: Timeline of broadband bundles in France 35 Table 3.8: Selected multi-play offers in France 36 Table 3.9: Services offered by the primary telecoms operators in Hong Kong 37 Figure 3.5: Timeline of broadband bundles in Hong Kong 38 Table 3.10: Selected multi-play offers in Hong Kong 38 Table 3.11: Services offered by the primary telecoms operators in Sweden 40 Figure 3.6: Timeline of broadband bundles in Sweden 41 Table 3.12: Selected multi-play offers in Sweden 41 Table 3.13: Services offered by the primary telecoms operators in the UK 42 Figure 3.7: Timeline of broadband bundles in the UK 43 Table 3.14: Selected multi-play offers in the UK 44 Table 3.15: Services offered by the primary telecoms operators in the USA 46 Figure 3.8: Timeline of broadband bundles in the USA 47 Table 3.16: Selected multi-play offers in the USA 48 Contents Analysys Research Limited 2007
Quadruple-Play Bundling Strategies v Authors Margaret Hopkins (Analysys Associate) is Principal Analyst with Exegesys. She started her career in the Post Office Telecommunications Long Range Planning Department. During her 18 years working with Analysys, she has been lead author on many reports, including Business Data Services: growth opportunities and forecasts for Europe 2007 12, Fixed Mobile Convergence in the Enterprise Voice Market, Beyond Triple Play: forecasts for broadband value-added services, Scenarios for Enterprise Mobile Data Services 2006 11, VoIP versus Mobile: forecasts for the future of enterprise voice, The Business Case for Carrier Migration to VoIP, The Business Case for Broadband Entertainment, Delivering the Broadband Home, New Fixed and Mobile Services and Devices: forecasts 2003 2008, Broadband Value-Added Services for SMEs: market strategy and forecasts 2003 2008, Next-Generation Networks: integrated IP architectures and IP Voice Services: the return on investment for European service providers. She holds a degree in Engineering from the University of Cambridge and a Master s in Telecommunications and Information Systems from the University of Essex. Helen Nierinck (Research Analyst) specialises in desk research on, and financial analysis of, Central Europe and the Balkans, covering the fixed and mobile markets. Prior to joining Analysys in 2007, Helen worked as Business Development Manager for Focus Aviation, and as Marketing and Events Manager for Cambridge Investment Research. She has a degree in Modern Languages from the University of Cambridge. Alex Skeaping (Business Analyst) joined Analysys Consulting in 2006 and has contributed to a number of consulting projects for regulators, and for fixed and mobile operators, in Europe, Asia and North America. Alex holds an honours degree in Economics and Mathematics from the University of Durham. Phil Todd (Head of Custom Research) specialises in broadcast, media and digital content strategy for content providers, content distributors and equipment vendors. He has undertaken studies in market segmentation and quantification, B2B and B2C product development, customer satisfaction, brand metrics and online service strategies. He has specific expertise in price sensitivity and elasticity research for fixed and mobile services as well as research for online publishers. Phil also has experience of research within online and electronic delivery for financial services across Europe and, over a 20-year career, has conducted research on a global basis, including projects based in Europe, Singapore, South Africa and the USA. He has a degree in Psychology and English, and a Master s in Computer Science. Acknowledgements The authors would like to thank all those who assisted in the preparation of this report, especially all those who gave their time for interviews (whose details are given where they are quoted); Tony Lavender, Mike Grant, Catherine Viola, Rupert Wood and Renata Zakova from the Analysys Mason Group for their valuable comments and assistance; Laura Binkowski of Analysys Mason Group for help with data gathering and Mark Chambers of Analysys Research for editorial support. Analysys Research Limited 2007 Contents
vi Quadruple-Play Bundling Strategies Disclaimer Figures and projections contained in this report are based on publicly available information only and are produced by Analysys Research Limited independently of any client-specific work within the Analysys Mason Group. The opinions expressed are those of the stated authors only. Analysys Research Limited recognises that many terms appearing in this report are proprietary; all such trademarks are acknowledged and every effort has been made to indicate them by the normal UK publishing practice of capitalisation. However, the presence of a term, in whatever form, does not affect its legal status as a trademark. Analysys Research Limited maintains that all reasonable care and skill have been used in the compilation of this publication. However, Analysys Research Limited shall not be under any liability for loss or damage (including consequential loss) whatsoever or howsoever arising as a result of the use of this publication by the customer, his servants, agents or any third party. Contents Analysys Research Limited 2007
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