Dual and Triple Play services in Europe continue to focus on price competition with promotional pricing now the norm

 

“The gap has widened and now starts from 9 per cent (instead of 12 per cent) since the last survey only 3 months ago. Additionally in all of the 8 European countries surveyed (France, Germany, Italy, Netherlands, Spain, Sweden, Switzerland and the UK) there is widespread promotional pricing deployed for Dual-Play and sometimes for a pure Broadband only service, a sign of new frantic activity geared at encouraging customers to enter the bundled world,” stated Margrit Sessions, Managing Director of Tariff Consultancy Ltd, publishers of the research.

 

The findings come from the latest edition of the “Triple Play and FMC Journal” published by Tariff Consultancy Ltd, which provides a unique overview of the pricing and commercial issues for bundled service providers across Europe. The Journal provides the latest round up of the main product launches and results together with analysis of the product positioning of the main Triple Play operators in France, Germany, Italy, Netherlands, Spain, Sweden, Switzerland and the UK.

 

Increasingly the bundles of Broadband, fixed telephony & TV services are being presented at lower price points – typically at rates of from 30 to 40 Euro per month across Europe for a triple play service. At the higher end of the market providers are struggling to maintain premium pricing positions. In order to maintain a premium price point providers are responding with two types of pricing initiative:

 

·         Providers are reducing the cost of their headline top tier Triple Play services. As an example in Germany, the consumer arm of Deutsche Telekom, T-Home, has reduced its premium “Entertain Comfort” triple play package to 59.95 Euro per month from 69.95 Euro per month,

 

·         Providers are also introducing more content into the service to maintain a price point. An example is from Sweden where both Telia and Tele2 has increased the number of TV channels included in the TV package of both their triple-play offers.

 

Finally the use of promotional pricing is now widespread for dual-play and – in some cases – for single-play services (particularly high speed broadband as a loss leader). The price promotion appears to be successful in spurring the uptake of bundled services but has not yet been translated into a widespread adoption of triple-play services, where improving the take up rates for triple-play services has still to be effectively addressed by the majority of operators.

 

Promotional pricing is being used to advertise headline reductions, which vary from 3 months to 6 months, typically involving a time-limited half-price or a 10 Euro per month price reduction. The most aggressive example comes from the UK, where Virgin Media is offering a half price promotion based on a full 12 month contract for selected dual-play (Broadband & telephony) services. 

 

Finally, although fixed line Broadband services (typically using ADSL access) has been the cornerstone of the triple play service to date it is Mobile Broadband that is rapidly becoming the new growth product for the telecoms provider.

 

In Portugal for the first time in Europe, the number of Mobile Broadband subscribers has overtaken the number of fixed Broadband subscribers. The growth rate of Mobile Broadband services appears to be reaching a critical mass of users in other countries such as Ireland and Austria (although currently from a lower base). 

 

 “The rapid growth in Mobile Broadband adoption – which is being adopted by users who currently have fixed line Broadband as well – means that new types of telecoms bundle may have to be invented to accommodate the mobile data user, otherwise the bundled service provider will find itself absent from the most lucrative and fast growing sector of the market,” added Margrit Sessions, of Tariff Consultancy Ltd.

About the Triple Play & FMC Journal: Published as the successor to the FMC Newsletter the Triple Play & FMC Journal provides a unique research-based overview of the main issues of service bundling and convergence for fixed network and mobile operators with particular emphasis on pricing. Analysis of operator pricing is focussed on 8 main European countries (including France, Germany, Italy, Netherlands, Spain, Sweden, Switzerland and the UK). The Journal is available as a subscription service and is published on a quarterly basis at a price of GBP 895 per year (for 4 issues). More information is available on the company website at: www.telecomspricing.com 

 

About Tariff Consultancy Ltd.: Based in London Tariff Consultancy Ltd is a specialist research and consultancy organisation which is focussed on tariffs for fixed and mobile service providers on a global basis. More information is available on the company website at: www.telecomspricing.com