Beyond Triple Play: forecasts for broadband value-added services

Table of Contents

0 Summary

1 Triple play adds a revenue stream but not much profit

• 1.1 Broadband operators will not be able to offset falling ARPU by increasing subscriber numbers for much longer
• 1.2 Network roll-out is expensive and TV struggles to pay for it
• 1.3 Can broadband operators add profitable services to their interactive networks?

2 There is a huge range of bundles and pricing strategies

• 2.1 Operators are adopting different pricing strategies
• 2.2 In the last two years, France has been the most competitive broadband market
• 2.3 Value-added services fall into four main groups
• 2.4 Value-added telecoms has a lot to offer
• 2.5 Interactive entertainment is an exciting new area which can reduce churn
• 2.6 Virus protection and WiFi modems are the current favourite IT add-ons
• 2.7 Home management is an area where broadband can bring benefits to users
• 2.8 Portals offer the chance to carry advertising
• 2.9 Broadband operators have a particular set of strengths

3 Some revenue streams are easier for broadband operators to tap into than others

• 3.1 Broadband operators dominate the communications value chain
• 3.2 Broadband operators are struggling to find a role in the entertainment value chain
• 3.3 Portals are a dying service, but community Web sites are probably the replacement
• 3.4 Telecoms-related products and services are more promising
• 3.5 Broadband operators can exploit priority content

4 Broadband operators may have to live with a commodity business

• 4.1 Telecoms operator branding is strong and can be limiting
• 4.2 Broadband operator skills are a good match for telecoms services, but not so good for some of the other services
• 4.3 Fixed broadband operators have some extremely valuable networks

5 Value-added services can fill the gap as triple-play revenues decline

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List of Figures and Tables

• Figure 0.1: Forecast revenues for the four main groups of residential broadband value-added services and three other sources, Western Europe, 2002-12
• Figure 1.1: Broadband ARPU in six Western European countries, 2002-6
• Figure 1.2: Broadband penetration in six Western European countries, 2002-12
• Table 1.1: A simple business case for VDSL
• Table 2.1: Top-of-the-range bundles of broadband services offered by leading Western European service providers
• Table 2.2: Key launches and service developments in broadband offers in France, 2002-6
• Figure 2.1: Major broadband technology announcements in France, and growth rates of broadband lines, 2001-5
• Figure 2.2: Services mapped by bandwidth and number of parties
• Figure 3.1: Value chain for TV over broadband
• Figure 4.1: A comparison of telecoms operator brand strengths
• Figure 4.2: A comparison of telecoms operator skills
• Figure 5.1: Sources of revenue in the Western European residential broadband market, 2002-12
• Figure 5.2: Forecast revenues for the four main groups of residential broadband value-added services and three other sources, Western Europe, 2002-12
• Figure 5.3: ARPU from broadband value-added services in Germany, 2002-12
• Figure 5.4: ARPU from broadband value-added services in France, 2002-12
• Figure 5.5: ARPU from broadband value-added services in Italy, 2002-12
• Figure 5.6: ARPU from broadband value-added services in Spain, 2002-12
• Figure 5.7: ARPU from broadband value-added services in Sweden, 2002-12
• Figure 5.8: ARPU from broadband value-added services in the United Kingdom,2002-12
• Figure 5.9: Revenues from broadband value-added services and device sales, as a percentage of total broadband value-added service revenue in six Western European countries in 2012
• Figure 5.10: Potential revenue from priority distribution services in Western Europe, 2006-12