CONTENT STRATEGIES
entertainment devices in their home.” Geyr is counting on mobile and broad- band subscribers opting to take additional services from O2 in the longer term. O2 UK’s retail wireline broadband
Internet access lines reached 0.6 million in the quarter to the end of March, up 56.3% year-on-year. The company’s total mobile base in the UK—excluding the Tesco Mobile MVNO for which it provides network services—increased 4.6% year-on-year to reach 21.4 million customers at the end of the first quarter. But total ARPU in the first quarter showed a 3.1% decline year-on-year in local currency to €24.0. O2 is already offering four different
services in the Czech Republic, but the number of customers taking a quad-play service is minimal. O2 says it had 138,000 TV subscribers at the end of the first quarter, up by 7.8% year on year, while retail ADSL customers reached 691,000, up 12.9% from a year earlier. But its mobile subscribers in that country currently number nearly 5 million. By comparison, AT&T says more than
three-quarters of its U-Verse TV custom- ers took a triple- or quad-play option by the end of the first quarter. Indeed, AT&T, Virgin Media and others are using the fact that they offer four services to help ramp up overall bundle take-up, allowing customers to take different permutations of services. AT&T in May began offering a new
version of its Choice bundled offering, with consumers able to bundle any of four services: U-Verse TV, broadband, fixed voice and mobile. AT&T claims customers that opt for a U-Verse Choice triple-play bundle could save $30-$45 a month compared to taking them as indi- vidual services, while quad-play customers could save up to $60 per month. That is a reflection of the fact that
bundles currently revolve largely around pricing rather than multi-platform serv- ices, something analysts say must change. “If you’re to get that real benefit of customer stickiness you need to move from just a converged bill to an actual converged offering, not just a converged price and contact for customer service,”
July/August 2010
www.totaltele.com
says David Russell, UK telecoms leader at PricewaterhouseCoopers. Some providers are starting to develop
multi-platform services that exploit the different delivery modes. Orange, for example, has a catch-up service that lets a user start watching a TV programme at home and then continue viewing it on another device such as a mobile phone. But more often than not, most of the
quad-play offerings are about marketing and single bills rather than service inno- vation. While AT&T boasts of cost savings of “hundreds of dollars” when a customer buys a four-service bundle, there is precious little value add in terms of services that exploit a customer having all four platforms. Virgin Media has been offering bundles
comprising mobile, fixed telephony, Internet and TV since 2007 in the UK. Take-up of three services was 61.9% according to the company’s first-quarter results (up from 57.6% in Q109), while 11% of Virgin Media’s subscribers take all four. Overall, the growth of quad-play penetration at Virgin Media has been slower than that of triple-play since launching the offers. “Virgin Mobile has a reputation for
having a customer base dominated by lower-end prepay users,” says Brian Potterill, director of PwC’s Telecoms
contract subscribers—including custom- ers taking a mobile broadband contract—a growth of 45% over Q1 2009; but at the same time it recorded a deactivation of 196,000 prepay subscribers, giving it 2.029 million down from 2.225 million at the end of last year. PwC says another issue, which may
prove to be a problem for all quad-play providers, is that mobile is fundamentally a different sell compared to products focused around the home. “The challenge is how to glue mobile into a quad-play offer,” says Potterill. “Mobile is sold to the individual rather than to the household as the others are. And with mobile, handsets are a big driver. The other products are not really in that mould.” Added to that, many consumers are
opting for mobile voice services instead of fixed voice services. Infonetics in new research says 70% of all North American voice subscribers were mobile in 2009, and says that will continue to grow as an increasing number of consumers go mobile-only. What’s more, fixed operators could be
better placed currently to drive quad- play services if it comes down to customer perceptions. Consumers are not yet asso- ciating mobile operators with quad-play offerings, according to research from PwC conducted last year with 3,000
‘The challenge is how to glue mobile, which is sold to the individual, into the quad-play offer’
Strategy Group. “This doesn’t fit with its [trailblazer] image in the fixed market,” which has seen Virgin launching super- fast broadband at speeds up to 50 Megabits-per-second and being the first to offer a digital video-on-demand service in the UK market. “They didn’t really have the customer alignment, between fixed and mobile, which may explain why [quad-play hasn’t] been a rip roaring success,” says Potterill. Virgin Mobile, which operates as an
MVNO, established its business on prepay services. But now the company is taking steps to redress the balance: In the first quarter Virgin Mobile reported 1 million
people across Austria, France, Germany, the Netherlands, Switzerland and the UK. “One of the things we observed is that mobile is the least effective anchor or starting point if you want to leverage a quad-play, while TV is the most power- ful,” says Russell. But that could change. “Mobile opera-
tors have a stronger relationship with their customer, so would be more likely to lead the deal [in the long run],” says Potterill at PwC. The rise of the smartphone, and the many multimedia apps available and better known by the wider public, is also giving mobile operators a stronger association with providing content.n
17
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36