Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Belgian cable observatory - 12 septembre 2017 - IDATE DigiWorld

281 views

Published on

Context and status of Belgian broadband market - A well-developed market - Copper unbundling not a major success - Fresh momentum for a rigid broadband market

Situation in retail standalone and bundled TV market - Market dynamics: market evolution and market shares - Consumer prices compared - Service quality compared

Wholesale aspects: underlying market observations - Wholesale pricing approaches in Europe - Access prices for cable: - Quality of cable access: Cable KPIs and comparison with BRUO/BROBA

Published in: Technology
  • Be the first to comment

  • Be the first to like this

Belgian cable observatory - 12 septembre 2017 - IDATE DigiWorld

  1. 1. Belgian Cable Observatory Brussels, 12 September 2017
  2. 2. Wholesale market Retail TV and bundled market Cable opening at a glance Context and status of Belgian broadband market - A well-developed market - Copper unbundling not a major success - Fresh momentum for a rigid broadband market Situation in retail standalone and bundled TV market - Market dynamics: market evolution and market shares - Consumer prices compared - Service quality compared Wholesale aspects: underlying market observations - Wholesale pricing approaches in Europe - Access prices for cable: - Quality of cable access: Cable KPIs and comparison with BRUO/BROBA Cable observatory Agenda
  3. 3. www.idate.org © IDATE DigiWorld 2016 – p. 3 Belgium enjoys a well-developed broadband market… NGA coverage (% of HH; FTTH, VDSL, DOCSIS 3.0; June 2016) Share of NGA broadband in all broadband lines (% lines, December 2016) Source: European Commission, IDATE A European leader in coverage as well as take-up of high-speed broadband 0% 25% 50% 75% 100% BE NL ES LU UK DE FR IT NGA other Source: European Commission
  4. 4. Copper unbundling failed in Belgium Opening of the copper infrastructure SOURCE: EC Implementation reports ... but competition is weak…
  5. 5. … intra-modal competition has run out of steam Source: BIPT Competition essentially a duopoly between Proximus and local cable-co Fixed residential BB market shares (% of subscribers) Take-up of telco wholesale products
  6. 6. Importance of cable opening To create competition on the bundled offers, entrants need access to the different components of the bundled offers • When a component is not easy to replicate, access needs to be imposed Economic literature shows that infrastructure-based competition is stronger and more sustainable than service-based competition • Entrant which rely on regulated access need to invest But access is not easy to impose and requires a strong regulatory strategy  Access prices  Access quality  Strong and quick regulator  Good data and market monitoring Opening of cable may provide fresh momentum for rigid broadband market
  7. 7. www.idate.org Situation in retail TV and bundle markets
  8. 8. www.idate.org © IDATE DigiWorld 2016 – p. 8 Bundling is the name of the game Convergence is progressing rapidly Take-up of multi-play bundles (subscriptions; end 2016) Source: IDATE based on BIPT 0 500 000 1 000 000 1 500 000 2 000 000 2 500 000 3 000 000 3 500 000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2-play 3- play 4-play
  9. 9. TV remains popular – especially if bundled with other services 3- and 4-play bundles make up almost 50% of TV market Cable analogue TV switch-off not completed (TV subscriptions) Source: BIPT Standalone TV 1 605 000 Internet+TV 266 000 Internet+TV+ mobile 261 000 Internet+TV+fixed telephone… Quad-play 837 000 Other bundles with TV 190 000 0 1 500 000 3 000 000 4 500 000 2010 2011 2012 2013 2014 2015 2016 analogue analogue and digital digital
  10. 10. Market dynamics: new entrant’s steady progress shows users appreciate choice TV subscribers by operator Orange Belgium making healthy progress Voo: not availableSource: Van Dijk, operator reports *includes SFR subscribers * 0 400000 800000 1200000 1600000 2000000 2400000 S1 2012 S2 2012 S1 2013 S2 2013 S1 2014 S2 2014 S1 2015 S2 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Orange Telenet Proximus Voo & others Quarterly TV net adds (000s) 3,0 5,2 7,1 15,8 16,4 14,5 -13,7 -4,1 -8,4 -11,1 -21,2 65,7 26,0 18,0 14,0 17,0 27,0 17,0 -40 -20 0 20 40 60 80 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Orange Telenet Proximus
  11. 11. www.idate.org © IDATE DigiWorld 2016 – p. 11 However, Belgian users do not enjoy most favourable pricing conditions... International benchmarks show prices levels are elevated in Belgium BE FR DE NL 68,19 57,19 0 10 20 30 40 50 60 70 Median offer (with line rental or cable TV subscription included) EU28 45,16 54,03 41,15 47,72 56,9 0 20 40 60 UK 42,81 53,62 35,27 53,19 55,09 0 20 40 60 2016***2015***2014** 49,55 52,98 36,3 59,6 55,16 0 20 40 60 Source: IDATE based on BIPT Source: European Commission, BIAC 2016 * Weighted avg., incl. VAT; ** 30-60 Mbps, ***30 – 100 Mbps 3-play subscription (EUR PPP/ month) 3-play subscription* (EUR PPP/ month)
  12. 12. www.idate.org © IDATE DigiWorld 2016 – p. 12 … in particular the evolution of bundle prices may give rise to concerns Evolution of communications price indices Source: Statistics Belgium Long-term upward price trend for service packages 2013 avg. = 100 80 90 100 110 120 130 fixed telephony mobile telephony Internet access bundles
  13. 13. www.idate.org © IDATE DigiWorld 2016 – p. 13 No favourable trend for consumer - but competitive offer by cable entrant Source: vanDijk, IDATE based on operator web sites TV TV + BB TV + BB + mobile 56,0 53,7 47,0 55,0 30 40 50 60 Retail price of basic TV + Broadband offer (EUR) SFR Box white (50Mbps-150GB) + TV Telenet Basic Internet (50Mbps-150GB) + TV Digitale Voo Toudoo TV + Internet (75 Mbps-200GB) Proximus Pack Internet comfort (100 Mbps-illimité) + Proximus TV 40 50 60 S1 2013 S2 2013 S1 2014 S2 2014 S1 2015 S2 2015 S1 2016 S1 2017 Q3 2017 Evolution of retail price of basic TV + Broadband offer (EUR) SFR Telenet Voo Proximus 22,2 25,9 27,0 0 5 10 15 20 25 30 Retail price of standalone TV offer (EUR/month) SFR TV Basic Telenet Digitale TV Voo Voocorder 15 20 25 30 S2 2015 S1 2016 S1 2017 Q3 2017 Evolution of retail price of standalone TV offer (EUR/month) SFR Telenet Voo 60 65 70 75 S2 2015 S1 2016 S1 2017 Q3 2017 Evolution of retail price of TV + broadband + mobile offers (EUR/month) Orange SFR Telenet Voo Proximus 64,0 71,0 68,7 69,0 71,0 0 50 100 Retail price of basic TV + Broadband + Mobile (tel&BB) offer (EUR) Orange Love + Dolphin SFR Box white (50Mbps-150GB) + TV+Silver Telenet Basic Internet (30Mbps-150GB) + TV Digitale + King Voo Toudoo TV + Internet (75 Mbps-200GB) + VOOmobile Wahoo (300 min-2GB) Proximus Pack Internet comfort (100 Mbps-illimité) + Proximus TV
  14. 14. www.idate.org © IDATE DigiWorld 2016 – p. 14 Quality of Service: no provider progressing on all aspects Source: BIPT * part of Telenet group 360 74 152 146 169 128 68 152 169 182 0 50 100 150 200 250 300 350 400 Average time needed for solving disruptions of the internet service ( in hours, 95% of cases) 99,0% 97,3% 94,3% 96,1% 90,7% 99,8% 96,6% 93,5% 94,4% 95,5% 80% 100% Respect of arranged date for delivery of the internet service (% of cases) 8,3% 2,8% 6,2% 5,8% 8,9% 5,9% 2,8% 6,6% 5,5% 7,5% 0% 2% 4% 6% 8% 10% Frequency of service disruptions on a monthly basis (in %) * * * * Some progress on disruptions – but no so much on repair times Improvements at ‘first-time right’, but three out of five players regress in respecting delivery dates 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 4,0% 3,9% 2,0% 1,8% 3,4% 1,8% 2,6% 2,7% 1,6% 1,5% 0,0% 0,5% 1,0% 1,5% 2,0% 2,5% 3,0% 3,5% 4,0% 4,5% Complaints about initial functioning of service (% of installations)
  15. 15. www.idate.org Wholesale aspects
  16. 16. Several methods to regulate access prices • Price cap • Benchmarking: • difficult to find correct benchmark • Retail Minus and Economic Replicability: • Complex calculation of “minus” factor • Wholesale tariff dependent on retail price strategy, difficult to come with “disruptive” offer • Difficult to account for promotions • Cost orientation • Should ensure access and cost orientation when costs are correctly calculated => Retail minus methodology was chosen by the Belgian Regulators Setting wholesale tariffs a crucial challenge for NRAs, competitors and markets Cost-orientation is the most widely used approach in practice Source: BEREC Price control method used in 2016
  17. 17. Wholesale prices Source: BE: BIPT wholesale price calculator, reference offers Monthly fees (EUR/access line; BE: bundles) 0 5 10 15 20 25 30 35 Standard -limited Standard - unlimited Boost - unlimited Telenet Nethys (Voo) Proximus BROBA w/o voice Numéricable (FR) Cost-orientation seems to offer more attractive conditions for challengers
  18. 18. Quality of service: line activation 10 16 22 15 25 55 0 10 20 30 40 50 60 80% 90% 100% without visit with visit 9 19 45 11 22 45 0 10 20 30 40 50 60 95% 99% 100% without visit with visit Threshold values are not directly comparable, but cable KPIs do not seem more challening than Proximus’ BROBA and BRUO Source: reference offers Line activation (working days) cable BROBA VDSL2 8 18 42 10 20 42 0 10 20 30 40 50 60 95% 99% 100% without visit with visit BRUO
  19. 19. Quality of service: Repair time Source: reference offers; * assumption: working day = 8.5hrs 8,5 68 17 102 0 20 40 60 80 100 120 w/o splicing with splicing 90% 95% 8 16 17 34 17 25,5 34 68 0 10 20 30 40 50 60 70 80 80% 90% 95% 99% degradation interruption Repair time (working hours*) cable BRUO/BROBA VDSL2
  20. 20. Conclusion of this edition… Opening of cable market is still very recent Encouraging start: more subscribers than any alternative operator’s TV bundle ever before in the Belgian market But…. No tangible impact on retail price evolution Only one single wholesale customer Regulatory framework evolving, impact remains to be seen For the observatory: need of more precise data on the investment in infrastructures, broken down by type of infrastructures … it’s too early to draw a conclusion!
  21. 21. Q&A We’re happy to take your questions – here are ours … • Are the selected indicators relevant to assess the effects of cable opening? • Do our data give the right picture of the market evolution? • Could you provide us with more precise data on network investment?
  22. 22. www.idate.org Thank you!

×