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The Benefits of Quad-Play for Mid-Sized IPTV Service Providers

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The Benefits of Quad-Play for Mid-Sized IPTV Service Providers Fibre rollout project examples – Lyse and Altibox partners Eirik Gundegjerde CEO Lyse Tele AS Content Lyse, moving towards multiservice approach The Market Choosing infrastructure Sales strategy Network Buildout Geographical coverage Developing services Key figures Conclusions The Market & infrastructure Lyses strategic position Providing broadband services to regional customers Going for a lasting position in this emerging market, and offering high quality competitive services The infrastructure evaluation 10000 0 3 5 9 The fiber choice r -10000År 1 År Å År 7 År Serie1 Economical consequences -20000 -30000 What about the services? No single service could give us sufficient ARPU to finance this infrastructure We decided on FttH and a full set of 3P services The competition before and after FttH Coax: Get, Telenor Satelite: Viasat, Telenor xDSL: Telenor and others DTT: Riks-TV Mobile (HSPA ++): Telenor, Netcom, ICE, NwN The customer choice: several infrastructures and several services Key Question: How to introduce a new infrastructure and compete with the excisting vendors? Sales strategy Sell, then build Targeting residential areas in Stavanger region Customers already signed up on ISDN, DSL and cable- TV/satellite-TV from other vendors. How to reach the penetration goals? Detached houses, slightly above medium income. 42% signed up for triple play during our 4 week test sales. Our sales pitch was one-stop- shopping Future proofing the home. Cover the households needs From a marketing point of view, we address the household with our bundle. Next generation infrastructure Highspeed internet ”Magic” TV Lots of convenience And some discounted services like fixed line telephony Next to 100% hitrate if there are teenagers in the household Our offering IPTV SD and HD, 32-130 channels VoD, +400 films, major studios PoD, local news etc PVR Games, webcams etc. Internet access 10 to 100Mbps symmetrical VoIP 2 fixed lines (alarm/fax compatible) Multiple phone services Free calls in the Nordic countries One contract, vendor, invoice, call center. The process …. Analyse area Sell Build Deploy services 80% are doing their ”homework” The Network Buildout The buildout – Access Metro SME Core Network Network Network Residential POI Multitennant Services 10 GB ethernet 10/100Mb ethernet Gigabit ethernet Fiber Multiple Gbps Regional Metro & access network Ethernet all the way Capasity, latency, jitter Applications Fully symetrical services Standard 100/100 Mbps Easily upgradeble Network Neutrality Geographical Coverage Regional – National - International Our operation are very regional, with 80k subscribers at maximum in the Stavanger area The services can scale to a mill subscribers without any problem We decided to use a franchise model, and have franchisees sell and build in all other regions than our home market. Several utility companies, municipalities and private companies has signed up with the same model Today we have 33 franchisees that build in 186 counties in Norway, and 1 that builds in 9 counties in Denmark. Total customer potential Lyse and Partners is over 1 mill subscribers The Core structure 10Gbps ring in South-Norway 2,5Gbps ring in Mid-Norway 2,5Gbps ring Stockholm & Copenhagen 1Gbps ring in Northern Norway Metro network POI Core Main links Core Building FttH based on Altibox Franchisees Altibox in red areas Developing Services Whats this about? ”Fiber to the people” Minimum capex and aquisition cost Maximum uptake and service penetration Volume and reduced opex Long term investment How to deal with competition? Service innovation – you simply have to be best! From Triple to Multiplay….. TV- Internet- Telephone- Mobile- Alarm- Gaming- AMR- Sensor- services services services services services services services services IP New Services – Competition – Convergence Services – the big picture Regional services Converged Multi-play services services Intra services TV-services 51662233 (farmor) ringer Avvis Talepost Altibox subscribers can choose Basispakke 1: Viasat Gull Basispakke 2: Altibox Her ønsker jeg å Oppdatere med Flervalgspakken vår Regional Services Examples from this region Popular services on your cellular Manage your PVR through your cell phone Security & surveilance Figures Customer focus and sales methodology Before selling Segmentation & field studies before opening a new market The right customers The right area due to cost Average CAPEX is 2.600 Euro, mostly civil works Average sales cost is 150 Euro Totalt investments 200 mill Euro Average penetration 60% Among these we contract: 100% Internet (mandatory) 80% IPTV 80% Telephone The main benefits of multi-play: Market penetration where offered; 60% Churn: <1% Average monthly ARPU pre VAT: 90 Euro and increasing 115.000 subscribers at present Delivering 700 – 1000 new subscribers per week 135.000 Set-Top-Boxes Bandwidth consumption: next to 100 Mbps per High- usage family Conclusions Package as a benefit When doing initial market research and concept, we tested several levels of bundling In our market, a majority would prefer single supplier of a bundled package of installation, services and billing We concealed the fact that this service bundle was Internet, IPTV, and IP-telephony Spesialized on providing regional content We still focus on the content and user experience, and the fact that fiber is a high capacity longterm solution Service innovation Economics Sustainable economics: Number of choosable services are high Product penetration 10000 (100/80/80) Æ high ARPU 0 Area penetration > 60% 1 5 9 r 3 r 7 -10000År Å År Å År Serie1 Same services, technology and topology all over means -20000 lower OPEX -30000 Time-to-market for services IP – facilitates new service bundles and convergence Bandwidth & symmetrics Competes easily with incumbants and others Future Goals The Challenger to the Incumbent 60,00 % End 2012 50,00 % 400k subscribers 40,00 % 50 Franchisees 2q05 30,00 % 2q06 2q07 20,00 % Threaths 10,00 % Content owners puts exclusive 0,00 % r o a e n ox TM iv dr NGT Get b BKK n Tele2 lti A rights to popular content Tele Ventelo A Eids Regulation models that will decrease customer uptake and economics in the first fase The key question How to ensure that fiber infrastructure are beeing built? Commercial models Competition between several infrastructurs providing ”same” services Several service vendors competes on the FttH infrastructure as well Our experience from ”open” networks A rich uncle Low penetration of services In the future: Internet pipe will serve most services The customer choice … Why did they sign up, and what makes them stay and pay? Competitive New services - innovation Single point of contact Fiber and future proof technology Thank you for your attention!.
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