CONTENT STRATEGIES BUNDLED SERVICES QUAD-PLAY QUANDARIES
Some service providers are starting to turn to quad-play bundles to keep customers and increase ARPU, but mobile is proving a particularly hard sell. By Ingrid Lunden
drive up average revenues per user. But they will need to find greater synergy from their bundles if they are going to compete on more than just price in the longer term. “As I look across Europe, most opera-
O
tors are in saturated markets and are looking for two things: ARPU and churn reduction,” says Stuart Orr, MD for Accenture’s Communications Practice in Europe. “Although quad-play is just start- ing to take off, where it’s proven to be successful it can have a dramatic reduc- tion on churn.” What’s more, even a small penetration
in quad-play can be a major contributor to revenues. PricewaterhouseCoopers (PwC) analysts in the Outlook 2010 report estimate that a quad-play penetration of just 5% can represent some 20% of reve- nues in terms of ARPU. Pyramid estimates multi-play revenues
across the Czech Republic, France, Germany, Italy, the Netherlands, Romania, Russia, Spain and the UK totalled €37 billion last year, up from €31 billion in 2008 (see chart), but says multi-play CAGR will slow from 18% last year to an average 7% between 2010 and 2014. France, a leader in IPTV and broad-
band services in Europe, is also showing the way when it comes to quad-play offer- ings. The leading telcos are already competing with cable and satellite provid- ers by offering IPTV-based services that they bundle with fixed telephony and broadband, and now they are including mobile in the mix. In June, Orange was finally given the go-ahead by the French regulator to provide quad-play services. The incumbent will be joining Bouygues, which started to offer quad-play bundles for 100 euros under the IDEO 24/24 brand at the end of May; and SFR, which in June launched its own four-service bundle, Illimythics Absolu, for €110.
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perators are starting to turn to quadruple-play bundles to attract and keep customers, as well as
Multiplay subscribers and revenues per household (Europe, selected) 160
n Dual-play n Triple-play n Quadruple-play — Average monthly household spending on multiplay services
120 80 40 0 2008 2009 2010 2011 2012 2013 2014 Source: Pyramid Research In May reports suggested that Orange’s
long-held TV ambitions in the UK were firmly back on the agenda after the mobile operator struck a deal to outsource its fixed network to BT. Orange will not comment, but a quad-play move would certainly fit with its wider strategy in other markets such as France and Poland. The only company providing true
quad-play services in the UK up to now has been Virgin Media. But a new digital TV service may see the quad-play space get a lot more crowded, potentially opening the door even for mobile opera- tors—which have already moved into fixed telephony and broadband with success—to sell TV services. Project Canvas, the proposed BBC-led Internet- based TV and video-on-demand service, was given clearance by the BBC Trust in June and is due to be launched next year. Canvas counts BT, TalkTalk and Arqiva among its founding partners. “I’ve met with strategy directors [for
UK mobile operators] and they are looking at Canvas as an option,” says Orr at Accenture. “As a route to market, Canvas is definitely something they are considering…The way Canvas has been designed does lend itself to wider use than just those in the consortia. It will become a big component for one or two of the other operators.” That would be a step-change for UK
mobile operators, which until now would have had to negotiate separate deals to offer the same level of television and video content as multi-play service providers BT, BSkyB and Virgin Media. Meanwhile Spain’s incumbent operator
Telefonica has set out its plans to launch quad-play services in all 25 markets in which it operates by 2012, as part of its Bravo initiative. But its UK mobile opera- tor, O2, which also provides fixed-line services, says it has “no current plans to launch our own TV service”. Instead it is focused on how to enable broadband customers to get the most from Internet- based TV services. “We are committed to giving our
customers a great quality experience when it comes to their home communica- tions needs,” says Felix Geyr, head of broadband at O2 UK. “At the moment this is focused on home broadband and home phone where we are committed to overturning poor customer experiences we see in the marketplace.” Geyr sees O2 as adding value to a TV
offering in the UK. “As more and more TV services are delivered over the Internet we again believe we can have an important role in helping customers get the most from these, whether that means having the right Internet connection in place through to taking them through the steps necessary to set up connected
www.totaltele.com July/August 2010
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Multiplay household ARPS
Multiplay households (millions)
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