Quadruple-Play Bundling Strategies

SUMMARY

“Quadruple plays have yet to prove their effectiveness. However, ultimately, service providers will have no choice but to offer them in order to compete in the residential telecoms and media marketplace.” Margaret Hopkins, Analysys Associate

Multi-play packages have established themselves as important marketing tools in the residential telecoms markets of the USA, Europe and Asia. These packages allow service providers to offer discounts and other benefits that attract customers, leading to increased market share and reduced churn, while helping to protect against incursions from new competitors.

Triple-play packages, including either fixed telephony, mobile telephony and broadband or fixed telephony, TV and broadband, are available in a number of markets. Quadruple plays, which combine all four elements (fixed telephony, mobile telephony, broadband and TV), are still relatively rare outside the USA and there is some debate about their value. Respected commentators from the telecoms and media industries have said that there is no point in combining the personal mobile service with the household TV subscription. Nonetheless, there are quadruple plays on offer in at least a dozen markets and all residential telecoms and media companies need to assess the relevance of this strategy to their own market position.

Quadruple-Play Bundling Strategies answers your key questions:

• How successful are existing quadruple-play bundles?
• When is quadruple play appropriate and when is it not?
• Which market segments are the best to target with a quadruple-play offering?
• How can a quadruple-play package be marketed successfully?
• What potential is there for revenue growth in the residential market?
• How can quadruple play be used to generate new revenue?

Who should read this report

• Incumbent operators who seek to use broadband and mobile services to drive future revenue growth.
• New entrant fibre network operators who want to make the most of their network capacity and maximise their revenue.
• New entrant broadband operators who hope to take market share from incumbents and other ISPs in the residential market.
• Mobile network operators who aim to promote fixed- mobile substitution and capture the entirety of their customers' telecoms and media spend.
• Cable-TV network operators who want to build on their inherent ability to offer triple play, by adding the mobile component.
• Satellite-TV operators who want to add more interactivity to their services and strengthen their market position.
• Residential telecoms equipment vendors who need to know what features their equipment will be expected to offer in the future.
• Telecoms CRM providers who will be called upon to support quadruple plays with the software capabilities needed to integrate customer management and service provision.
• Financial institutions who are being asked to finance new network roll-outs in the telecoms and media sectors.

TABLE OF CONTENTS

• 0. Summary
• 1. Multi-play strategies are a response to convergence
  • 1.1 A multi-play package markets telecoms and entertainment together as a single product that aims to be greater than the sum of its parts
  • 1.2 Families have limited budgets, of which multi-play packages aim to take an increased share
  • 1.3 Some elements of multi-play packages are targeted towards families, while others are aimed towards individuals
  • 1.4 Telecoms and media players approach the multi-play market with different strengths
• 2. Adding video to a telecoms portfolio is more difficult than adding telephony to a TV package
  • 2.1 Pay-TV players own popular TV content, and can easily buy voice minutes
  • 2.2 Fixed telecoms operators have to contend with a steep learning curve when launching video services
  • 2.3 Mobile operators aim to eliminate the fixed telco from the home
• 3. Selected country profiles
  • 3.1 Australia's incumbent continues to dominate the country's market
  • 3.2 Bundled services are at the forefront of Austrian operators' strategies
  • 3.3 Fixed-line penetration has halved in five years in the Czech Republic
  • 3.4 France has a particularly strong triple-play market
  • 3.5 Operators in Hong Kong are pioneering IPTV and ultra-fast broadband services
  • 3.6 Competition in Sweden has focused on speed rather than bundles
  • 3.7 The UK has the highest pay-TV ARPU in Europe
  • 3.8 US incumbents are planning ambitious fibre deployments
  • 3.9 Other countries that have, or will soon have, quadruple-play bundles
• 4. The five key lessons for building a successful quadruple-play strategy
  • 4.1 Triple-play bundles work, but quadruple-play packages are not yet proven
  • 4.2 Quadruple-play bundles are about survival in the short term and positioning for the long term
  • 4.3 Not all markets are ready for a quadruple-play package
  • 4.4 Quadruple-play bundles are a commercial imperative in the long term
  • 4.5 Quadruple-play packages are not easy to develop or market

Actions

Figures and tables

• Figure 1.1: Elements of a quadruple-play bundle
• Figure 1.2: The benefits of a multi-play bundle
• Figure 1.3: Share of family expenditure on telecoms and media in the UK, 1999- 2005
• Figure 1.4: Share of family expenditure on telecoms and media in Italy, 2001- 4
• Figure 1.5: Share of family expenditure on telecoms and media in France, 1999- 2004
• Figure 1.6: Different players' abilities to deliver the elements of a quadruple-play bundle
• Table 2.1: Multi-play SWOT analysis for cable and satellite operators
• Figure 2.1: Revenue generated from popular and long-tail content
• Table 2.2: Multi-play SWOT analysis for incumbents
• Table 2.3: Multi-play SWOT analysis for new fibre operators and unbundlers
• Table 2.4: Multi-play SWOT analysis for mobile operators
• Table 3.1: Services offered by the primary telecoms operators in Australia
• Table 3.2: Selected multi-play offers in Australia
• Figure 3.1: Timeline of broadband bundles in Australia
• Table 3.3: Services offered by the primary telecoms operators in Austria
• Figure 3.2: Timeline of broadband bundles in Austria
• Table 3.4: Selected multi-play offers in Austria
• Table 3.5: Services offered by the primary telecoms operators in the Czech Republic
• Figure 3.3: Timeline of broadband bundles in the Czech Republic
• Table 3.6: Selected multi-play offers in the Czech Republic
• Table 3.7: Services offered by the primary telecoms operators in France
• Figure 3.4: Timeline of broadband bundles in France
• Table 3.8: Selected multi-play offers in France
• Table 3.9: Services offered by the primary telecoms operators in Hong Kong
• Figure 3.5: Timeline of broadband bundles in Hong Kong
• Table 3.10: Selected multi-play offers in Hong Kong
• Table 3.11: Services offered by the primary telecoms operators in Sweden
• Figure 3.6: Timeline of broadband bundles in Sweden
• Table 3.12: Selected multi-play offers in Sweden
• Table 3.13: Services offered by the primary telecoms operators in the UK
• Figure 3.7: Timeline of broadband bundles in the UK
• Table 3.14: Selected multi-play offers in the UK
• Table 3.15: Services offered by the primary telecoms operators in the USA
• Figure 3.8: Timeline of broadband bundles in the USA
• Table 3.16: Selected multi-play offers in the USA