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European BSPs Are Taking the MVNO Route To Quad PlayProduct Type: Market Research ReportPublished by: Yankee Group Published: October 2006 Product Code: R388-2269 Description Competitive Quad-Play Implementations Are Gaining MomentumTo compete effectively in the battle for customer loyalty, business service providers (BSP) are expanding beyond their traditional business lines. Although the majority of incumbent telcos have mobile subsidiaries, instances of alternative network operators (altnets) with direct ownership of cellular networks are rare. Notable exceptions include Neuf Cegetel and SFR in France, Wind in Italy, Sonae and Optimus in Portugal, Orange and Amena in Spain and Tele2, which is both an altnet and a mobile network operator (MNO) in Sweden. To up-sell customers to additional services, altnets are extending their brands and product portfolios to include competitively priced mobile packages. During the past 12 to 18 months, there has been a wave of initiatives by second- and third-tier BSPs to enhance their multiservice offerings by entering the cellular marketplace as mobile virtual network operators (MVNOs). A handful of cable operators have spearheaded the European altnets’ drive into quad play. Since 2003, UPC Broadband has offered a bundled fixed-mobile subscription product in conjunction with Austria’s third-ranking mobile operator, ONE; in August 2005, UPC Broadband introduced a prepaid service as an MVNO in the Netherlands. In Switzerland, Cablecom—which uses Sunrise’s network—launched a prepaid product in December 2005, followed by a postpaid subscription option in May 2006. In July 2006, Belgium’s Telenet launched Telenet Mobile—an MVNO service that offers competitive call rates and single billing with no subscription fee. In the same month, following its acquisition of the highly successful Virgin Mobile MVNO, the cable operator ntl/Telewest announced the United Kingdom’s first quad-play offer, enabling customers to choose any two, three or four subscription components for £20 (US$36), £30 (US$55) or £40 (US$73 per month, respectively. Among the region’s alternative DSL providers, France’s Neuf Cegetel has taken the biggest strides into quad play. Leveraging Cegetel’s ownership of SFR, the recently merged BSP launched its Neuf Mobile subscription offering in April 2006. In addition, it launched Neuf Talk Mobile—a hybrid fixed-mobile convergence (FMC) product combining GSM, VoIP and Wi-Fi technologies—to enable free domestic landline calls (as well as free calls to selected international numbers). The service—which requires a smart phone, dual-mode GSM/Wi-Fi handset or PDA—is free for customers that are equipped with the operator’s Neuf Box home gateway and receive broadband over a fully unbundled line, or that use one of its 32,000 community hotspots. In addition to its broadband and fixed telephony products, the pan-European operator Tele2 provides MVNO services in Austria, Denmark, France (where it reported more than 300,000 mobile subscribers in 2Q06), the Netherlands, Norway, Slovakia and Switzerland. However, Tele2’s foray into these mobile markets represents a triple play for the most part, because its only TV initiative so far is in the form of a joint venture with the Dutch altnet Versatel. Table of Contents
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