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Europe Market Perspective / Vol. 7, Issue 1, January Edition
Pyramid Research, Inc, Jan 2007
MOBILE COMMUNICATIONS: Europe Regional: Fixed-Mobile Substitution from a Pure-Player Perspective
In May 2006, Vodafone launched Casa in Italy. The service is part of a broader strategy to leverage mobile technology to compete for demands traditionally served by fixed line technology. Europe Analyst Juliano Torii compares this strategy to that of integrated fixed-mobile operators such as France Telecom. He argues that despite the success of Casa against voice-only fixed services, the relative weakness of its complementary HSPA-based mobile data solution could force the company towards a more pronounced fixed line presence.
FIXED & MOBILE COMMUNICATIONS: Europe Regional: WiMAX vs. 3G Performance: Looking Beyond the Hype
Although press attention on WiMAX has diminished lately, considerable WiMAX activity is nonetheless still being witnessed in Europe. CMT Manager Ozgur Aytar draws on research from her recent report Can WiMAX Challenge 3G? Performance, Economics, and Opportunities to outline her latest thoughts on how WiMAX’s performance compares to that of 3G. Her examination shows that, in performance terms, there are no clear winners among WiMAX and 3G.
Extract:
Fixed-Mobile Substitution from a Pure-Player Perspective
In May 2006, Vodafone Italy launched Casa, a mobile package aimed at replacing traditional fixed line voice services. The service was complemented by the June 2006 launch of the “Super UMTS” broadband Internet box, a HSPA-based mobile Internet service offering download speeds of up to 1.8Mbps. Casa is a “homezone” type of service, allowing subscribers to make calls to fixed lines at a zero per-minute tariff when calling from an area assigned as home during the subscription process. The Internet box is an external mobile connective device that has been marketed as a substitute for fixed line DSL broadband for both laptops and desktops. Vodafone’s fixed-mobile convergence strategy is effectively one of pure fixed-mobile substitution, conditioned by its position as one of the few multi-market pure-player mobile operators in Western Europe. The operator’s two most recent attempts at accelerating the trend for its own benefit had significantly different outcomes: while Casa is successfully competing against its fixed line voice alternatives, Internet box and the related Casa Internet dual-play bundle seem to have been met with limited success, due mainly to the inherent limitations of current mobile broadband technologies. This seems to be forcing Vodafone into abandoning its previous non-committal approach towards a fixed line presence, leading to an increasing number of partnerships and own-branded fixed line services. Its continued commitment to fixed line will be influenced by the ability of future wireless technologies to compete effectively with DSL.
Vodafone’s Comparative Strategic Position as a Pure Mobile Player
Vodafone’s fixed-mobile convergence (FMC) strategy differs significantly from champions of the integrated operator model such as France Telecom. While FT has committed substantial resources to integrating fixed and mobile technology in a seamless solution, Vodafone has so far relied on pure fixed line substitution. The company has limited its fixed line exposure to partnerships with pure-players fixed operators (in Italy), with very small capital commitments through acquisitions or own-branded DSL (in the UK, Germany, and New Zealand). An interesting case to witness is Telecom Italia—despite being an integrated operator, the company has so far followed a non-committed approach to FMC, although its new Next Generation Network (NGN) project, if implemented, may change the picture.
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