BOSTON – The four services of the so-called "quad-play" don’t go together quite as easily as some tend to assume, delegates to the 2008 CTAM Summit in Boston were told Monday afternoon.
There are such differences inherent with video, wireline voice, high speed Internet and wireless (especially wireless) that just selling a bundle of four – while it sounds nice and lucrative – certainly takes a lot more thought and creativity to do right.
Here in the States, cable operators haven’t yet made full leaps into wireless like some other companies around the world (“All of us in cable have pondered how wireless fits into our business,” said MSO president Nomi Bergman of Brighthouse Networks, while introducing the panel), so delegates listened to the experiences of three operators: France Telecom’s Orange; Hong Kong’s PCCW and Canada’s Rogers Communications.
All three organizations offer the four services in question and all market them somewhat differently from the other. For example, content differentiation is big for both Orange and PCCW. Orange has an exclusive on French first division soccer on all of its platforms, which has been key to its growth. So, if you want to see your favourite team on TV, wireless, or broadband, you had better be an Orange subscriber.
That would be like NHL hockey only being available on Rogers Cable – something that just wouldn’t – and can’t – happen in Canada. Even exclusive deals with programmers are frowned upon by the CRTC.
Because we can’t really do that in Canada, Rogers stresses connectivity, which works well, to a point, said chief strategy officer Mike Lee in his presentation to delegates during the “Phone + Mobile + Internet + TV – Does is Add Up?” general session.
That point of difference is the mobile offering. While television and Internet and wireline phone are all household items, the wireless phone – from the handset itself to the package purchased, is personal and difficult to stuff into a bundle of home services.
Jean-Marc Harion, VP business development for France Telecom, agreed saying that while broadband and television are very sticky products – and that all customers are very reluctant to leave their high speed Internet provider – it’s different in mobile where customers will often go to wherever the coolest phone is.
“If you have an exciting handset, people will switch,” he added.
“It’s not always about more bundles,” explained Lee about the assumption the quad play is just about making a giant, high margin basket of services. “We integrate wireline and wireless to the benefit of the consumer.” For example, one of the packages the company offers pairs wireline data and wireless data.
France Telecom’s Orange is a huge company with huge numbers. It operates in 220 countries and territories and earns more than 52 billion Euros a year in revenue. It has over 1.5 million IPTV customers and 13 million wireless subs.
For a company that was a traditional telco, TV was an absolute must for France Telecom, said Harion. “We want to deliver content everywhere,” he said, “with a consistent experience to all of our customers’ devices and handsets… we needed IPTV to boost our multi-play services adoption.” Without the TV portion, the multi-play content options simply “can’t be profitable,” he added.
The company has been offering IPTV and other ancillary broadband and wireless video services for four years now and derives 6% of its revenue from such content and any advertising it can sell around it.
Lee pointed to what his company is doing, along with the PCCW and Orange cases and showed three tombstones in his presentation representing the death of distance – which has already happened with the commoditization of the long distance market – the death of time – coming in 2011, he believes, when prime time viewing, for example, will be whenever the viewer thinks it is; and the death of place in 2016 – when viewers will be able to take any content with them, anywhere they wish.
“The network itself is going to disappear,” said Lee. “You won’t care as a consumer how the service got to you… just that it did.”
Cartt.ca editor and publisher Greg O’Brien is covering the 2008 CTAM Summit in Boston this week.
