Measuring the effectiveness of bundles: a European perspective

EXECUTIVE SUMMARY

• IN A NUTSHELL
• KEY MESSAGES

BUNDLES AND X-PLAY: A STOPOVER ON THE ROAD TO CONVERGENCE

• DIFFERENTIATING BETWEEN BUNDLES AND X-PLAY
• THE DESTINATION IS CONVERGENCE

THE ROLES OF SERVICE BUNDLING IN CORPORATE STRATEGY

NEW METRICS FOR A NEW ERA

• CURRENT PERFORMANCE MEASURES ARE INSUFFICIENT
• PRODUCING NEW METRICS IS NOT AN EASY TASK

BUNDLES: NO LONGER A DIFFERENTIATOR

• BUNDLES ARE NO LONGER UNIQUE IN MATURE MARKETS
• BUNDLE COMPARABILITY: AN OPPORTUNITY
• CHURN ONE, CHURN ALL

BUNDLES AND X-PLAY: THE FINANCIAL IMPACT

• ARE BUNDLES A PANACEA FOR DECLINING REVENUE GROWTH?
• THE SILENCE IS DEAFENING
• SO WHAT FINANCIAL DATA IS AVAILABLE AND WHAT CAN IT TELL US ABOUT BUNDLES?
• BUNDLE DISCOUNTS ARE COUNTERPRODUCTIVE TO MARGINS
• BUNDLES ARE NOT A COST-SAVING MEASURE
• X-PLAY ADDS INCREMENTAL REVENUES

FUTURE BUNDLE AND X-PLAY STRATEGIES

• WHY BOTHER WITH BUNDLES?
• FILLING YOUR BASKET AT THE INFOTAINMENT SUPERMARKET

• TABLE 1: NEW METRICS NEEDED FOR A CONVERGING SECTOR
• TABLE 2: EXAMPLES OF EUROPEAN OPERATORS' PRODUCT BUNDLES

• FIGURE 1: CONVERGENCE ROADMAP
• FIGURE 2: TELEFONICA' S PSTN SUBSCRIBERS IN RELATION TO LAUNCHES OF BUNDLE OFFERINGS, 1Q05- 3Q07
• FIGURE 3: WESTERN EUROPEAN INCUMBENTS' DOMESTIC FIXED REVENUES, 2005- 2007
• FIGURE 4: AVERAGE QUARTER-ON-QUARTER DOMESTIC FIXED REVENUE GROWTH* FOR WESTERN EUROPEAN INCUMBENTS, 2005- 2007
• FIGURE 5: AVERAGE ARPU FOR EUROPEAN INCUMBENTS, 2005- 2007
• FIGURE 6: AVERAGE QUARTER-ON-QUARTER VOICE AND BROADBAND ARPU GROWTH FOR WESTERN EUROPEAN INCUMBENTS, 2005- 2007
• FIGURE 7: VIRGIN MEDIA BUNDLE VERSUS UNBUNDLED PRICE
• FIGURE 8: VIRGIN MEDIA CONSUMER CABLE ARPU AND CUSTOMERS, 4Q05- 3Q07
• FIGURE 9: COSTS AND SAVINGS ASSOCIATED WITH BUNDLE OFFERINGS
• FIGURE 10: BROADBAND ARPU GROWTH BY SERVICE PROVIDER IN FRANCE
• FIGURE 11: THE X-PLAY SERVICE-ORIENTED SHOPPING BASKET