Abstract
Overview
One of the trends over the past few years has been the shift towards the increasingly ubiquitous quadruple play. Sustained by their integrated subsidiaries and their market clout, incumbent telcos are the frontrunners here, and virtually all have by now introduced this type of offer. Meanwhile, cablecos and ISPs - e.g. Comcast in the US and Yahoo!BB in Japan - are joining the fray and launching their own quadruple play bundles.
Once confined to their respective core business areas, these players are now all competing with one another in the internet access, voice, TV and mobile services markets. As a result, with competition increasing and once novelty solutions becoming commonplace as providers are all tending to offer consumers more or less the same services, innovation has become both a central challenge and a strategic necessity for differentiating the offers, increasing ARPU and securing subscriber loyalty.
This report provides a detailed look at innovative bundles, whether true combinations of the quadruple play' s elements or more add-ons to a core service such as television, internet or mobile access. For each bundle, we offer one or several case studies, along with an assessment of market expectations for the service, the keys to its success, its potential for differentiation, its current popularity and its development prospects.
The report is structured around three main themes:
- technological innovation (fixed-mobile convergence offers, digital home),
- innovation through range strategies (bundles, innovative services),
- innovation through pricing strategies.
Key questions
- What innovations are we seeing in bundles?
- Which innovations enable operators to increase their market share and/or ARPU,
- and to secure subscriber loyalty?
- What are the market' s expectations in terms of innovation?
- What are the winning range strategies?
- What pricing strategies make it possible to increase market share?
Who should read this report?
- Telecom operators (fixed, integrated, mobile)
- Understand strategic positioning and marketing mix for the quadruple play market' s different types of provider
- Pinpoint the keys to success in the main innovative offers
- ISPs
- Analyse the innovative offers marketed by ISPs, in terms of services and pricing model
- Assess the stakes and challenges that quadruple play represents
- Equipment suppliers
- Identify the players present in the convergent device market and their strategies
- Assess investment opportunities
- Market analysts
- Analyse the state of competition over innovative service bundles
- Understand the strategic shifts in the quadruple play ecosystem
Operators analysed:
- 3 UK
- AT&T
- BellSouth
- BT
- Comcast
- Deutsche Telekom
- Fastweb
- France Telecom
- Free
- Korean Telecom
- O2
- Softbank Yahoo! BB
- Telecom Italia
- Telefonica
- Time Warner Cable
- Verizon
- Virgin Media (NTL UK)
- Vodafone
Table of Contents
Report objectives and scope
Introduction
1. Innovation through convergent access and continuity of service
- 1.1. Convergent fixed-mobile handsets
- 1.2. Fixed-mobile convergence services
- 1.2.1. Telecom services: unified numbering, unified voicemail, VPN, fixed-mobile videophony
- 1.2.2. Convergent portals
- 1.2.3. Convergent instant messaging
- 1.2.4. Fixed-mobile email
- 1.2.5. Fixed-mobile entertainment services
- 1.3. Convergent Web 2.0 services
- 1.4. Home network
- 1.4.1. Context
- 1.4.2. The digital hub concept
- 1.4.3. Examples of innovative offers
- 1.4.4. State of demand
2. Innovative marketing through the service line
- 2.1. The quadruple play
- 2.2. Broad line bundling innovations
- 2.2.1. Introduction: the need for a clear service line
- 2.2.2. Broad-line bundling strategy: the NTL Virgin Media example
- 2.2.3. Incentives to use more services: BellSouth
- 2.2.4. Free' s single triple play line
- 2.2.5. BT: broadband bundle line incorporating VoIP, Wi-Fi hotspots, routers and the phone
- 2.2.6. Naked DSL + mobile voice bundles
- 2.2.7. Convergent bundles: multi-network internet access
- 2.2.8. Bundles that include hardware
- 2.2.9. Bundles that include free installation
- 2.2.10.Bundles associated with other services
- 2.3. TV service bundles
- 2.3.1. Introduction
- 2.3.2. TV service lines
- 2.3.3. VoD and PPV
- 2.3.4. The PVR
- 2.3.5. HDTV
- 2.3.6. Interactive TV
- 2.4. Access-centric service bundles
- 2.4.1. Line of bitrates on offer
- 2.4.2. Services associated with access-centric offers
- 2.4.3. Innovative e-learning service: BT Learning Centre
- 2.4.4. ISPs' dedicated bundles
- 2.5. VoIP-centric service lines
- 2.6. Mobile service bundles
- 2.6.1. Introduction: portals and partnerships
- 2.6.2. Music
- 2.6.3. Mobile TV
- 2.6.4. Streaming video and VoD
- 2.6.5. Transactional services
- 2.6.6. Search services
- 2.6.7. Dedicated bundles
3. Innovation through pricing strategies
- 3.1. Introduction: overall shift to flat rates, and even unmetered offers
- 3.2. High-volume and unlimited offers
- 3.2.1. ISPs' unlimited offers
- 3.2.2. Mobile operators' high volume offers
- 3.2.3. Fixed-mobile family fleet
- 3.3. The low-cost approach
- 3.3.1. Approach taken by Swedish mobile operator Tele2/Comviq
- 3.3.2. Approach taken by French ISP Free
- 3.4. Free offers
- 3.4.1. Free fixed voice: the commoditisation of voice
- 3.4.2. Free BB
- 3.4.3. Free Mobile
- 3.5. Fixed-mobile substitution offers
- 3.5.1. Fixed-mobile substitution for voice: the home zone
- 3.5.2. Mobile internet access
4. Conclusion: to each his offer
Figures
- Figure 1: Mobile penetration (end of 2006)
- Figure 2: Broadband penetration in households (2Q06)
- Figure 3: Pay-TV penetration in households (2006)
- Figure 4: Viewer interest in personalised TV programming1
- Figure 5: Reasons for downloading music
- Figure 6: Dual equipment levels
- Figure 7: Example of a convergent portal: Telecom Italia
- Figure 8: Users' interest in mobile IM
- Figure 9: Interest in mobile email
- Figure 10: 3UK' s Slingbox offer
- Figure 11: Cyworld portal
- Figure 12: Comcast' s Ziddio portal
- Figure 13: The digital home according to Free
- Figure 14: The digital home according to Sky
- Figure 15: Digital devices in the home
- Figure 16: Number of devices per household
- Figure 17: Adolescents' personal equipment
- Figure 18: Growth of the broadband subscriber base by geographical zone (million)
- Figure 19: Content uploaded to the web
- Figure 20: Home networking practices
- Figure 21: Means of transferring content from the PC to the TV
- Figure 22: Means of transferring content from the PC to the stereo
- Figure 23: Growth of the UK telecom market (K EUR)
- Figure 24: Vendor market share in the UK
- Figure 25: Virgin Media (NTL UK) quadruple play offer
- Figure 26: Growth of NTL Virgin Media bundle customers
- Figure 27: BellSouth' s quadruple play
- Figure 28: France Telecom' s Business Everywhere offer
- Figure 29: Sky' s line of access services, with free installation
- Figure 30: Pay-TV penetration in households
- Figure 31: Example of a Free mini-package
- Figure 32: Sky' s line of TV services
- Figure 33: The Sky Anytime multi-device VoD offer
- Figure 34: Interest in VoD (1) according to consumer age
- Figure 35: Verizon' s one-touch programme guide
- Figure 36: Average screen time per week, by age
- Figure 37: Interest in time-shifted viewing (1), according to age
- Figure 38: Interest in personalised programming (2)
- Figure 39: Interest in the PVR (3), according to age
- Figure 40: Time Warner' s PVR offer
- Figure 41: FastWeb' s PVR offer
- Figure 42: Interest in HDTV1, according to home equipment
- Figure 43: Interest in interactive mode, according to age
- Figure 44: Typology of the main optional paid services marketed with access
- Figure 45: Interest in mobile music
- Figure 46: Medium-term segmentation of mobile TV offers
- Figure 47: Main mobile TV and video business models
- Figure 48: Vodafone' s mobile TV offer
- Figure 49: Interest in mobile TV
- Figure 50: Interest in mobile video
- Figure 51: 3 UK offer
- Figure 52: The Bratz mobile offer for pre-teens
- Figure 53: Examples of simplified mobile handsets
- Figure 54: 3 UK X-Series offers
- Figure 55: Orange UK Free BB offer
- Figure 56: Virgin Mobile USA "Sugar Mama" offer
- Figure 57: Example of a home zone cell
- Figure 58: Indicator of location in the home zone
- Figure 59: SFR France Happy Zone offer
- Figure 60: Example of a substitution box: Vodafone
- Figure 61: Positioning of innovative bundles with respect to Use-IT market segmentation
Tables
- Table 1: Convergent fixed-mobile handset offers and projects
- Table 2: The BT Fusion offer
- Table 3: Orange France Unik offer
- Table 4: Unified number service offers and projects
- Table 5: Unified voicemail services
- Table 6: Fixed-mobile videophony service offers and projects
- Table 7: Convergent portal offers and projects
- Table 8: Operators' convergent IM offers and projects
- Table 9: Operators' convergent fixed-mobile mail offers and projects
- Table 10: Vendors' shifting market positions
- Table 11: Incumbent telcos' positioning on the quadruple play (in their home market)
- Table 12: Cableco positioning on the quadruple play
- Table 13: ISP positioning on the quadruple play (excl. incumbent telcos)
- Table 14: Positioning of the different telecom players in the UK
- Table 15: Virgin Media product line for each service
- Table 16: Line of bundles marketed by Virgin Media (ex-NTL) in the UK
- Table 17: The Free offer
- Table 18: Examples of FMC internet access offers
- Table 19: Time Warner Cable' s line of TV services
- Table 20: Verizon' s FIOS TV offer
- Table 21: Free' s line of TV services
- Table 22: NTT subsidiary Plala' s VoD offer in Japan
- Table 23: Properties of the Time Warner Cable PVR
- Table 24: Basis functions common to all PVRs
- Table 25: Distinguishing features of operators' PVR solutions
- Table 26: Features of the Sky HD offer
- Table 27: Downstream speeds (theoretical peak) offered by a selection of leading ISPs in Europe, Asia and the US (end of 2006)
- Table 28: Typology of the main optional paid services marketed with access
- Table 29: Examples of incumbent telcos' dedicated bundles
- Table 30: Convenience services offered to VoIP subscribers
- Table 31: 3 Italy' s mobile video offer
- Table 32: Targeted mobile service bundles
- Table 33: Billing plans
- Table 34: Examples of VoIP offers
- Table 35: Examples of mobile operators' high-volume offers
- Table 36: Details of 3 UK' s X-series
- Table 37: Verizon Wireless rate plan
- Table 38: Examples of residential FMC group plans
- Table 39: Free BB offers in the UK
- Table 40: Sky line of access services
- Table 41: Orange UK' s line of access services
- Table 42: Examples of residential voice substitution rate plans
- Table 43: Examples of residential data substitution rate plans
