Triple Play. One Stop Shop.

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Triple Play. One Stop Shop.

  1. 1. Triple Play. One Stop Shop. Trends & Prospects for Operator Bundles Ian Fogg, Senior Analyst June 2006
  2. 2. Agenda <ul><li>(very) Brief Background about JupiterResearch </li></ul><ul><li>What Drives Providers to Launch Triple Play and Multi-Plays </li></ul><ul><li>Consumer Interest in TV, Broadband & Telephony Bundles </li></ul><ul><li>Positioning VoIP: ‘Unfix’ the Home Phone </li></ul>
  3. 3. Background: About me <ul><li>Coverage at JupiterResearch: </li></ul><ul><li>“ European Broadband & Consumer VoIP” </li></ul><ul><ul><li>Broadband: DSL, LLU, cable, WiMax, WiFi etc. </li></ul></ul><ul><ul><li>VoIP & Personal Technology </li></ul></ul><ul><ul><li>Emerging Platforms </li></ul></ul><ul><li>Business advice on current & future products </li></ul><ul><li>Prior experience includes: </li></ul><ul><ul><li>3g / UMTS mobile, digital cable TV, PDAs. </li></ul></ul><ul><li>Based in London, UK. </li></ul><ul><ul><li>http://weblogs.jupiterresearch.com/analysts/fogg/ </li></ul></ul>
  4. 4. About JupiterResearch <ul><li>Perspective, Context, Analysis, Advice </li></ul><ul><li>Business advice on new markets </li></ul><ul><li>Numerous forecasts, covering: </li></ul><ul><ul><li>W Europe: 17 countries, including Ireland </li></ul></ul><ul><ul><li>CEE: further 10 countries </li></ul></ul><ul><ul><li>US </li></ul></ul><ul><li>Based on primary consumer data </li></ul><ul><li>Both syndicated subscription research & custom research & consulting </li></ul>
  5. 5. The ‘Vicious Competition Circle’ Driving New Bundled Offers Source: JupiterResearch 6/2006 <ul><li>Lower Prices & Revenues: </li></ul><ul><li>Broadband </li></ul><ul><li>TV </li></ul><ul><li>Voice </li></ul><ul><li>Mobile </li></ul><ul><li>Providers Diversify: </li></ul><ul><li>Overseas </li></ul><ul><li>IPTV </li></ul><ul><li>VoIP </li></ul><ul><li>Mobile / MVNO </li></ul><ul><li>New Competitors: </li></ul><ul><li>for cable & satellite TV </li></ul><ul><li>for incumbents telcos in voice </li></ul><ul><li>for mobile ops </li></ul><ul><li>for ISPs </li></ul>Regulators Enable New Opportunities (LLU, MVNO, etc) Operators Feel Pressure to Create Cheap Bundles
  6. 6. Broadband Enables this Competition Crucible in the Digital Home & Outside Source: JupiterResearch (6/2006) Fixed Telephony Digital Home Mobile Television Satellite TV Ops ? Cable Ops CE Makers A summary of European operators’ multi-play strategies Arrows indicate major diversification paths Broadband Historic Telecom Ops Alternate telcos ISPs Mobile Ops
  7. 7. Today, Household Broadband Is Already Mainstream in Key Markets > 40% 30 - 39% 20 - 29% 10 - 19% < 10% Household broadband penetration 2005 Source: JupiterResearch Internet Access and Broadband Model, 5/06 (Western Europe only) 52% of all households in Netherlands and Denmark have broadband
  8. 8. Operators Are Looking Beyond Broadband as Broadband ARPU’s Fall to Drive Growth 33% of dial-up users unwilling to pay more for an ISP service Source: JupiterResearch Internet Access and Broadband Model, 5/06 (Western Europe only); JupiterResearch/Ipsos Consumer Survey (9/05), n = 1,571 (narrowband users, France, German, Italy, Spain, Sweden and UK) Percentage Decline in ARPU 2004 to 2005 Broadband Growth 2004 to 2005 Ireland Greece Rising broadband availability is the main factor in these two immature markets. The Correlation Between Broadband Growth and Broadband ARPU Decline
  9. 9. Bundles Have Low Appeal for Today’s Dial-Up Users, Unless there is no Extra Cost Percentage of Narrowband Users Question: Thinking about your current Internet service provider, which of the following features could motivate you to switch to a more expensive package? (Select all that apply.) Source: JupiterResearch/Ipsos Consumer Survey (9/05), n = 1,571 (narrowband users, UK, France, Germany, Spain, Italy, and Sweden only) Motivating factors for dial-up users to spend more on a package from their ISP Just 12% of dial-up users interested in a bundled package
  10. 10. Examples of Providers Using Multiple Platforms to Reach Consumers, NOT the classic Triple Play <ul><li>Cable Companies: </li></ul><ul><ul><li>UPC/Chello NL trialling DSL & launching an MVNO </li></ul></ul><ul><ul><li>ntl UK now owns a DSL ISP, Virgin </li></ul></ul><ul><li>Satellite TV Operators: </li></ul><ul><ul><li>BSkyB bought DSL LLU provider, Easynet for fixed VoIP, broadband and IPTV services </li></ul></ul><ul><ul><li>CanalSat & TPS offering TV over DSL in partnership woth France Telecom, Free and other French DSL ISPs </li></ul></ul><ul><li>Telecoms: </li></ul><ul><ul><li>Swisscom offering mobile TV on Natel and IPTV via Bluewin, and buying into cable service with Teleclub stake </li></ul></ul><ul><ul><li>BT launching fixed VoIP and an MVNO </li></ul></ul><ul><ul><li>TDC and Portugal Telecom continuing cable TV and DSL in parallel. Former also launching IPTV on DSL. </li></ul></ul><ul><ul><li>Fastweb operating fibre to the home, while extending DSL reach. </li></ul></ul><ul><ul><li>France Telecom re-branding their ISP Wanadoo to Orange </li></ul></ul>Source: JupiterResearch (6/2006)
  11. 11. Operators are Becoming Platform Agnostic and Customer-Centric Fig x: Provider Strategy Choices in Europe MUNICATION ENTERTAINMENT ACCESS DATA COM Provider ‘plays’ VoIP IM Video Email IP TV Music Sport Games Cost Control SMS + BUSINESS BROADBAND Source: JupiterResearch 6/2006 <ul><li>The New Multi-Play: </li></ul><ul><li>Communication </li></ul><ul><li>Entertainment </li></ul><ul><li>Access data </li></ul>Brand(s) Strategy Must Deliver
  12. 12. Bundles Work Better for TV Operators than for Telecoms Operators Percentage of Consumers without Cable/Satellite DTV Question: Can you tell me which, if any, of the following factors would persuade you to switch to cable or satellite digital TV? (Please rank top three.) Source: JupiterResearch Consumer Survey (9/04), n = 3,054 (France, Germany, Italy, Spain, Sweden and UK only) Consumers’ Reasons to Switch to Digital cable or satellite TV (cheaper than purchased separately) (cheaper than purchased separately) Bundles Appeal Much More as a Hook For TV Upgrades
  13. 13. Telephony Bundles Appeal Most to Broadband Users; VoIP Enables Percentage of Narrowband Users Question: Thinking about your current ISP, which of the following features could motivate you to switch to a more expensive package? (Select all that apply.) Source: JupiterResearch/Ipsos Consumer Survey (9/05), n = 2,009 (broadband users, UK, France, Germany, Spain, Italy, and Sweden only) Just 16% of broadband users interested in a bundled package Motivating factors for broadband users to spend more on a package from their ISP At low end user cost, VoIP Enables this:
  14. 14. ISPs Have Control over Customer Relationships and Much (but Not All) of the Platform Platform- neutral Telco switched network Broadband + + Optional PSTN backup VoIP in the Home Last Mile Call Routing ISP/telco IP network Broadband CO Public Internet Public Internet Provider- controlled platform Source: JupiterResearch (1/06) Note: “CO” means central office.
  15. 15. Location-Free Appeals To Consumers Fixed Operators Must Unfix the Home Phone 21% of consumers would regularly divert their home phone to their mobile 17% interested in PC-based VoIP telephony regularly 27% of consumers interested in regularly using their mobile in place of their home phone Question: Thinking about your use of the Internet during the past year, which of the following activities did you conduct online monthly or more frequently? (Select all that apply.) Thinking about the way you communicate, if you had the option, which of the following would you be interested in doing on a regular basis (at least a few times a month)? (Select all that apply.) Source: JupiterResearch/Ipsos Consumer Survey (9/05 ), n = 4,288 (online users, UK, France, Germany, Italy, Spain, and Sweden only)
  16. 16. For ISPs, Hybrid VoIP Services That Unfix The Home Phone Will be Critical PC-based Last-Mile Broadband Telephony Evolutionary and controlled platform Source: JupiterResearch (1/06) Independent Internet Telephony Disruptive and platform-neutral Phone-based BT Communicator , Bluewin Phone , freenet , PlusTalk , T-Online Internet-Telefon Gizmo , Google Talk, MCI Web Calling for Windows Live (via Windows Live Messenger), sipgate , Skype, Vonage (softphone) , Yahoo! Messenger AOL Talk (US) , Dixons’ and Springvox’s freetalk, PhoneGnome, sipgate , SIPphone , voipGate, Vonage AOL Phone (Germany), Bredbandsbolaget (B2), BT Broadband Talk , cablecom (broadband phone), Free, freenet , NextGenTel, PlusTalk , Wanadoo Wireless & Talk Note: All services named are examples only; services offering options for hybrid PC and phone experiences are shown in blue type.
  17. 17. Broadband-Powered Competitors Will Co-Exist with Operators’ VoIP Customers ISP Internet Web browser Toolbars (e.g., Google, Skype, Yahoo!) Branded browsers (e.g., MSN Explorer) Desktop software (e.g., AIM, Google Desktop Search/Pack, iTunes, MS Messenger, Skype, Steam) Internet access ISP Web site ISP managed Retailed/unmanaged CPE Distribution of other firms’ products (e.g., e-mail, IM, search) The Broadband Value Chain and an ISP’s Role (in red) : Source: JupiterResearch (6/2006)
  18. 18. Some of the Relevant Recent Reports <ul><li>Independent Internet Telephony Build Consumer VoIP Propositions on Services, Not Just on Price </li></ul><ul><li>ISP Package Features Target Novice Users as a Foundation for Later Upsell </li></ul><ul><li>Broadband Home Gateways Build the Foundations for Provider Multi-play Strategies </li></ul><ul><li>European Digital Music Value Chain Making the Most of Small Margins and High Costs </li></ul><ul><li>Home Entertainment Networks in Europe Targeting Audio Networking Adopters, While Video Networking Remains Nascent </li></ul><ul><li>Consumer-Created Content Assessing Influence of Content-Contributing Online Consumers </li></ul><ul><li>European Broadband Access Forecast 2006-2011 Understanding Revenue Risks as the Broadband Market Matures </li></ul><ul><li>The Broadband Trojan Horse Learn to Live with ISP Disintermediation </li></ul><ul><li>European Online Advertising Forecast, 2005 to 2010 Responding to the Rise of Digitally Empowered Consumers </li></ul><ul><li>Online Video in Europe Strategies for Necessary Integration </li></ul><ul><li>European Media Consumption Consumer Survey, 2006 </li></ul>Source: JupiterResearch (9/05)
  19. 19. Thank you [email_address] http://weblogs.jupiterresearch.com/analysts/fogg/ http://www.jupiterresearch.com/

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