- Language: English
- 769 Pages
- Published: June 2013
- Region: Global
From Triple-Plap To Quad-Play: Strategies, Business Models, And Best Practices
- Published: September 2007
- Region: Global
- 100 Pages
- Pyramid Research, Inc
Multi-play business models continue to gain in popularity across the telecom and media space. At the end of 2006, more than 40% of Canada’s households subscribed to a triple-play package, and nearly 40% of British households subscribe to some form of packaged bundle. The trend has shattered traditional service lines and compelled players with gaps in their portfolios to scramble to offer their own competitive bundles. Telcos have become strong players in the content space, with some starting pay-TV operations from scratch. Satellite players are beginning to offer VoIP; even steadfast pure-play mobile operators like Vodafone have felt compelled to get into the broadband business.
Is this all worth it? New report, From Triple-play to Quad-play: Strategies, Business Models, and Best Practices, provides an in-depth examination of the evolution of multi-play models. Building on case studies and examples from dozens of telco, cable, satellite, and other multi-play providers around the world, the report analyzes multi-play positioning (it’s about protecting the core), pricing (discounts dominate), and the bottom-line performance of triple play (mixed). The report also reviews the emergence of multi-play models driven by a new breed of players (mobile, satellite, WiMAX), and proposes a rethinking of the concept of quad play.
Assess the financial implications of long-term positioning strategies to develop a successful multi-play offering. The
detailed analysis of content acquisition models, from partnerships to IPTV build-outs, includes assessments of feasibility, technology, and content. The in-depth case studies will help you assess competition and identify telco
triple-play best practices and profitability. Use the included market forecasts to quantify the market opportunity.
Through case study analysis and market forecasts, identify best practices to drive penetration of triple-play subscribers
and mitigate competitive risk from fixed telcos and other multi-play providers. Use the included market forecasts to
quantify the market opportunity.
Position your offerings to triple-play service providers through a clear assessment of the impact of triple-play solutions
on their operational performance.
Financial services, investment firms
This report will help you assess the short- and long-term financial prospects for multi-play providers through a review
of the initial margin patterns of multi-play providers and forecast of the evolution of those margins.
Assess the threat of future quadruple-play providers on pure-play mobile operations. Develop your strategy now to
minimize the risk of churn to telcos and cable companies offering mobile voice as a key component of their strategies.
Content providers, aggregators
Assess the implications of bundled strategies on content acquisition, positioning, and cost.
Satellite DTH players
Assess possible responses to the evolution toward bundles, including the advantages and pitfalls of partnerships and outright acquisitions to fill gaps in service portfolios.
Key questions answered:
- Is triple play indispensable? Is quad play worth it?
- What multi-play value propositions have proven most successful?
- What is the current proportion of customers with bundled packages, and what is the expected evolution over
the next five years?
- Is triple play profitable? What type of impact does the evolution to bundles have on margin
- What is the optimal approach for service providers to filling the gaps in their portfolios? Acquire, partner, or
- How can pure-play satellite and mobile operators compete in a multi-play environment?
- Which players derive the most benefit from bundling? SHOW LESS READ MORE >
Section 1: The demise of pure play and the necessity of triple play
1.1 Options to fill the gap in the portfolio: build, acquire, or partner
1.2 The irrelevance of the “subscriber” and the advent of the RGU
Section 2: Multi-play positioning and pricing strategies
2.1 Discounts reign supreme
2.2 More than a single-bill proposal, quad play is about richer service combinations Country snapshot — Why Canada is one of the world’s leading triple-play markets
2.3 The flip side of discounts: potentially declining revenue
2.4 Revenue preservation through multi-play works better for some than others
2.5 Using “free” services to drive growth
2.6 Providing value beyond price
2.7 Can operators charge a premium for VoIP?
2.8 Multi-play offerings lacking TV will be a difficult sell in medium term
2.9 A segmented approach can extend the reach of triple play
2.10 The future of multi-play: from bundled services to blended services
Section 3: Service bundling and the challenge of regulations
Country snapshot — Brazil: service providers adjust to the challenge of regulating multi-plays
Country snapshot — Mexico: a convergence agreement and asymmetric regulations
Section 4: Measuring the bottom line: triple play will drive margins for some players only
4.1 Bundles are good for cable
4.2 Multi-play not as good for telcos, but they still need it
4.3 For satellite and mobile players, multi-play will hurt margins
4.4 Pure integrated players (FastWeb/Free Telecom) see high margins
Section 5: Bundled services forecasts
Section 6: Carrier multi-play profiles: positioning, pricing, performance
BSkyB: Using triple play to protect core TV business
A mix of technologies enables triple play
Triple play with free voice and broadband
Responding to competitive pressures
Triple play helps ARPU
Clearwire: Looking to partnerships to push WiMAX-based triple play
Triple play enabled by partnerships in the works
Discounts in exchange for customer agreements
Competitive prices but less value
An increase in ARPU
Quad play on the horizon with additional partnerships
Comcast: Pushing large bundled discounts, seeing top-line and bottom-line success
All-cable triple play
More aggressive on discounts
Triple play driving broadband growth?
Number one in triple-play market share
Comcast quad play: beyond the bundle
NET Serviços: Using triple play to drive broadband share in Brazil
The first Brazilian player to offer triple play
Pricing: 20 package combinations
Competitive against telco/DTH bundles
Using triple play to drive broadband market share
Verizon Communications (US) — Triple play to protect voice, pushing fiber
A PSTN-inspired triple-play package
No major discounts here
Priced at the same level as cable, but not as discounted
Triple-play market share could be better
Virgin Media: Facing a challenging triple-play environment, and quad-play uptake is still slow
Early to the quad-play game
Insistent on discounting
Protecting the landline business
An increasingly competitive market for multi-play
Rising triple-play penetration but flat revenue
More mobile customers under contract
Vodafone Arcor: A mobile operator gets into DSL to maintain revenue share
Bundled service offers led by substitution
Mobile quad play opportunities: mobile TV and femtocells
VTR: A tiered approach to service bundles — one size doesn’t fit all
Three tiers of triple play
Number one in triple play
List of exhibits
Exhibit 1: Service providers’ strategic options for filling gaps
Exhibit 2: Impact of multi-play approach on Capex, Opex, revenue, and control
Exhibit 3: Sample approaches to building bundles
Exhibit 4: Triple-play bundle discounts
Exhibit 5: Triple-play penetration of households in selected markets
Exhibit 6: Canada key player presence by segment
Exhibit 7: Canada: Bell Canada and Rogers triple-play packaging
Exhibit 8: Subscriber market shares of Vodafone Italy and its competitors
Exhibit 9: Revenue market shares of Vodafone Italy and its competitors
Exhibit 10: Belgacom’s multi-play combinations provide a glimpse of PSTN’s inevitable demise
Exhibit 11: Service bundle regulation in sample markets
Exhibit 12: How Brazilian telcos do TV
Exhibit 13: Multi-play providers’ EBITDA margins
Exhibit 14: Telenet’s monthly ARPU and RGU per subscriber
Exhibit 15: Rogers’ EBITDA margin for consolidated business and for wireless and cable/telecom segments
Exhibit 16: The triple-play effect on Belgacom’s and Telefónica Chile’s fixed-line EBITDA margins
Exhibit 17: Triple-play provider Opex-to-revenue ratios
Exhibit 18: Global triple-play subscribers by region
Exhibit 19: Breakdown of Sky’s subscriptions at the end of June 2007
Exhibit 20: Prices of Sky’s bundles
Exhibit 21: Sky’s baseline triple play compared with most similar packages of BT and Virgin Media
Exhibit 22: Sky’s highest-tiered triple play compared with Virgin Media’s most similar package
Exhibit 23: Sky’s share of UK pay-TV market vs. its share of UK TV market including free satellite services
Exhibit 24: Net additions to Sky’s TV subscriber base
Exhibit 25: Evolution of Sky’s triple-play base and RGU per subscriber
Exhibit 26: Sky’s monthly ARPU
Exhibit 27: Triple-play market shares in the UK
Exhibit 28: Sources of Clearwire’s customer base as of March 2007
Exhibit 29: Clearwire’s broadband and bundle pricing
Exhibit 30: US broadband prices per download speed (US$ per Mbps)
Exhibit 31: Breakdown of Comcast’s subscription base, 2Q2007
Exhibit 32: Comcast bundle price vs. sum of parts
Exhibit 33: Comcast and AT&T pricing and discounts on bundles
Exhibit 34: Comcast’s video, Internet, and phone revenues
Exhibit 35: Comcast’s Internet, phone, video, and total ARPS
Exhibit 36: Comcast’s total RGUs, customer relationships, and RGUs per customer
Exhibit 37: Comcast’s triple-play subscribers and market share
Exhibit 38: Breakdown of NET Serviços’ 3.8m subscriptions as of 2Q2007
Exhibit 39: Price of NET Combo bundles vs. the sum of the services’ stand-alone prices, with percent savings
Exhibit 40: Price comparison of NET bundles vs. the stand-alone services
Exhibit 41: Savings from bundling with NET and Telefónica
Exhibit 42: RGUs increase since the launch of triple-play services
Exhibit 43: Subscriber growth since triple-play launch
Exhibit 44: NET’s financial results, same-quarter comparisons (1Q2006 vs. 1Q2007, 2Q2006 vs. 2Q2007)
Exhibit 45: Brazil’s broadband market
Exhibit 46: Brazil’s pay-TV market
Exhibit 47: Breakdown of Verizon’s 112m subscriptions as of 1Q2007
Exhibit 48: Price of Verizon Freedom bundles vs. the sum of the services’ stand-alone prices, with percent savings
Exhibit 49: Savings from bundling: Verizon vs. Comcast
Exhibit 50: Verizon’s residential PSTN lines in service
Exhibit 51: Verizon’s triple-play market share
Exhibit 52: Breakdown of Virgin Media’s 15.2m subscriptions at the end of June 2007
Exhibit 53: Price of Virgin Media’s bundles vs. the sum of the services’ stand-alone prices, with percent savings
Exhibit 54: Comparison of triple-play packages offered by Virgin Media, BT, and Sky
Exhibit 55: Virgin Media’s net additions for landline, television, and broadband
Exhibit 56: Virgin Media’s broadband and pay-TV market shares
Exhibit 57: Virgin Media’s unique customer relationships and RGU per customer
Exhibit 58: Vodafone’s bundles — the mobile pure-play way
Exhibit 59: Triple-play bundles in Germany
Exhibit 60: Price of Arcor/Vodafone bundles vs. the sum of the services’ stand-alone prices, with percent savings
Exhibit 61: Vodafone’s market share continues to decline in Germany
Exhibit 62: Vodafone retained the top spot in terms of revenue
Exhibit 63: VTR’s triple-play packages
Exhibit 64: Pricing and savings from VTR’s triple-play bundles
Exhibit 65: Comparison of VTR and Telefónica Chile triple-play pricing
Exhibit 66: VTR’s number of customer relations and RGU per unique customer
Exhibit 67: VTR’s number of double- and triple-play subscribers
Multi-play business models continue to gain in popularity across the telecom and media space. At the end of 2006, more than 40% of Canada’s households subscribed to a triple-play package, according to data. Similarly, British regulator Ofcom recently reported that nearly 40% of British households subscribe to some form of packaged bundle.
The trend has been fairly sweeping, shattering traditional service lines and compelling players with gaps in their portfolios to scramble to offer their own competitive bundles. Satellite players are starting to offer VoIP, and steadfast pure-play mobile operators like Vodafone have felt compelled to get into the broadband business. Multi-play hardly solves all service provider problems: it is costly and complicated, and for telcos at least, will not help margins in the short term. Yet it is also positive for revenue growth and a major step toward applications-blending — and inevitable for any player with any pretension to market leadership.
Building on an in-depth review of service provider multi-play marketing and performance, our analysis makes the following salient points:
- As traditional barriers to entry are shattered and revenue mainstays commoditized, multi-play has become indis
pensable to service providers in the telecom and media space. The pure play isn’t dead, but it will find the road ahead substantially tougher. At worst, service bundling appears to slow subscriber churn, and at best allows
the provider to drive revenue through market share gains and increases in average revenue per customer.
- To fill the gaps in their portfolios and offer multi-play, service providers have three major options: build, partner,
or acquire. Building is costly, but arguably the best option; acquisitions are similarly costly, but for many inevitable;
and we see service bundling partnerships as useful, but mere stop-gaps.
- We believe there should be a rethinking of the concept of quad-play toward a more flexible approach to bundling.
More than a single-bill value proposition, quadruple play in our view promises operators the ability to build a more
powerful multi-play offering.
- Multi-play offers are generally positioned to enhance the competitiveness of operators’ core services and preserve
core revenues. While this has worked for broadband and cable providers, we doubt the effectiveness of bundles in
pushing PSTN voice. Protecting the PSTN, as many carriers continue to do, has slowed multi-play uptake.
- More players are pushing “free” services within bundled packages, accelerating service commoditization; the
economics of free offers are not attractive, but their impact is unmistakable.
- For telcos getting into the TV business, the role of VoD in pay-TV adoption can be significant, particularly in markets where uptake has been slow. However, we are highly skeptical of VoD-only content models.
- Service bundling is merely a step toward applications convergence. Multi-play bundling thus become platform-agnostic — accessible from any device — and focused on the applications.
- Regulation has emerged as one of the key challenges to multi-play in mature and developing markets. The
regulation challenge usually boils down to a number of key issues: technology moving faster than regulation,
regulatory turf wars, and concerns around market power and competition.
- The impact of multi-play on the bottom line has been mixed. Cable providers generally see improved bottom-line
performance; for fixed-line incumbent telcos, bundled services do not slow the deterioration of fixed margins, and
in some cases exacerbate it. Pure players limited by their technologies to providing fixed-line services face rising
Capex and Opex, whereas alternative carriers are better positioned, owing to networks configured from the start
to offer multi-play.
- By our estimates, the number of triple-play subscribers worldwide grew 65% in 2006, to nearly 22.7m; we are fore
casting the global triple-play subscriber base to grow to nearly 95m by 2011, or around 17% of the global broadband
subscriber base. Western Europe and North America will drive this growth, with Asia following closely behind.
- Bell Canada
- Brasil Telecom
- China Netcom
- China Telecom
- Express Vu
- France Telecom
- Free Telecom
- GTD Manquehue
- Kabel Deutschland
- NET Serviços
- Neuf Cegetel
- Qwest Communications
- Rogers Communications
- Sprint Nextel
- Telecom Italia
- Telefónica Chile
- Telekom Austria
- TIM Brasil
- Time Warner
- Unity Media
- Verizon Communications
- Video Networks Ltd
- Virgin Media
- Virgin Mobile
- Vodafone Germany
- Vodafone Italy
- Way Brasil