FTTP challengers in developed markets: case studies and analysis - Analysys Mason document
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FTTP challengers in developed markets: case studies and analysis
FTTP challengers in
developed markets: case
studies and analysis
Stephen Wilson
FTTP challengers in developed markets: case studies and analysis 2
About this report
This case study report assesses the strategies adopted by non- CASE STUDIES
incumbent FTTP operators in developed markets.
▪ MásMóvil (Spain)
It also provides recommendations for non-incumbent FTTP ▪ Vodafone (Portugal)
operators that are hoping to find success in the fixed broadband ▪ Salt (Switzerland)
segment. ▪ Altibox (Norway)
It is based on several sources: ▪ Sky (Italy)
▪ Analysys Mason’s internal research such as the Western
Europe Telecoms Market Matrix
▪ interviews with stakeholders in the fixed broadband market.
K E Y Q U E S T I O N S A N S W ERE D I N T HI S R E P O RT W HO S H O UL D R E A D T HI S R E P O RT
▪ How quickly can non-incumbent FTTP operators increase fibre ▪ Strategy and product executives in companies such as MNOs, energy
subscriber conversion rates? companies and DTH operators that are considering launching retail fixed
▪ What is the optimal FTTP infrastructure investment strategy for non- broadband offers.
incumbent FTTP operators? ▪ Strategy and product executives in non-incumbent FTTP operators that
▪ How can non-incumbent FTTP operators differentiate their retail fixed wish to understand best practice on monetising deployments.
broadband offers? ▪ Strategy and product executives in incumbent FTTP operators that wish
▪ How important is having exclusive content for FTTP challenger to understand the threat posed by competitors.
operators?
7
The case studies in this report analyse the strategies adopted by non-incumbent
FTTP challengers in developed markets
Rationale for launching FTTP Retail offers and strategy
The case studies in this report show the reasons why different In this report, we use case studies to analyse the retail
players may choose to enter the fixed broadband market. For components of challenger operators’ FTTP offers. This includes an
example, MNOs may offer fixed broadband to compete in markets analysis of retail prices compared to those of competitors, as well
where the take-up of fixed–mobile convergence (FMC) bundles is as different features of bundles such as the broadband speeds
growing. DTH players may offer fixed broadband to protect their offered (including Salt’s 10Gbit/s offer in Switzerland) and any
core pay-TV revenue. Other players such as energy companies advanced Wi-Fi functionality.
may use fixed broadband services to diversify their businesses.
We also consider how video is positioned within these operators’
Infrastructure investment strategy offers. Some operators, particularly Sky Italia, place a greater
emphasis on traditional pay-TV offers, while others, notably
There are multiple routes through which challengers can enter the
MásMóvil, have focused mainly on FTTP plus mobile bundles and
fixed broadband market. They could choose to build their own
have added ‘pay TV lite’ options at a later date. We examine the
networks, as in the case of Vodafone Portugal and, to a lesser
extent to which these FTTP challengers are relying on exclusive
extent, MásMóvil in Spain. Altibox in Norway also has ownership
content in order to drive broadband adoption. Sky Italia’s
of the underlying FTTP infrastructure for some of its subscriber
ownership of most of the rights to Serie A Italian football is the
base through the Lyse Group of companies.
most prominent example of this, though Altibox in Norway has
There is also an increasing number of wholesale access options also previously emphasised exclusive content.
that operators can use for passive unbundling or active bitstream.
Results
Alternative infrastructure has become more widely deployed as
investors have flooded the market. Sky Italia is taking advantage The report analyses the results of FTTP challengers’ strategies in
of competition in the wholesale FTTP market by using passive terms of fibre conversion rates of premises passed and market
access on Open Fiber’s network, and MásMóvil has extensive shares of fixed broadband subscribers. In addition, we analyse
agreements for passive access to Orange’s FTTP network in financial KPIs such as fixed broadband revenue market share and
Spain. ARPU. We also provide a forward-looking view on how these
operators are likely to fare in the future.
8
This report looks at three types of challenger FTTP operator: MNOs, energy
company-backed operators and DTH pay-TV operators
MNOs Energy companies
MNOs are the most common type of FTTP challenger operator. We Energy companies have adopted a range of means to enter the
consider MásMóvil in Spain, Vodafone in Portugal and Salt in fixed broadband market, including being active only on an
Switzerland in this report. infrastructure level. Some energy company backed ISPs, such as
Altibox in Norway and Waoo! In Denmark, have built strong retail
We use case studies to examine the extent to which MNOs have
brands. Altibox has a franchising model and has achieved very
invested in their own FTTP infrastructure. Most MNOs have not
high take-up rates. We believe that energy companies with well-
built their own FTTP, although there are exceptions (such as
crafted strategies can become a force in the retail broadband
Vodafone Portugal). Many MNOs are able to use attractively
market, but the franchise model used in Norway may not be
priced wholesale fibre offers, particularly for passive access, in
replicable elsewhere.
order to grow their role in the fixed broadband market.
DTH pay-TV operators
The case studies look at the extent to which FMC bundles have
been used to drive fibre take-up. The MNOs covered in this report A number of DTH operators have entered the fixed broadband
have used various strategies; Vodafone Portugal has achieved market in Europe. Examples include Sky in the UK, Ireland and
high take-up without FMC plans. Italy, Viasat in Sweden, Cyfrowy Polsat in Poland, Bulsatcom in
Bulgaria and Telly in Czechia. Sky in New Zealand (unrelated to
None of the MNOs in this report have exclusive video content,
the European Sky operators) also intends to launch FTTP in 2021.
which reflects both the high costs of acquiring sports rights and
DTH operators are coming under increasing competitive pressure
the difficulties in monetising them while the fixed broadband
due to the success of OTT players, and many are launching
subscriber base remains relatively modest.
broadband to prevent churn in their existing pay-TV subscriber
All three MNOs covered in this report have achieved good results base while providing new revenue growth opportunities. The
in the FTTP market. This shows that MNOs can successfully gain launch of FTTP could help DTH operators to modernise their pay-
market share despite their late entrance to the fixed broadband TV offers by accelerating the move to IP video.
market. We believe that it will become increasingly important for
We believe that exclusive content from DTH players retains some
MNOs in developed markets to formulate a fixed broadband
importance and that the DSL take-up rates seen for Sky UK and
strategy as FMC bundles become more popular.
Ireland could broadly be replicated by Sky Italia.
FTTP challengers in developed markets: case studies and analysis
Contents Executive summary
Analysis
Case studies
About the author and Analysys Mason
FTTP challengers in developed markets: case studies and analysis 28
About the author
Stephen Wilson (Principal Analyst) is the lead analyst for Analysys Mason's Fixed Broadband Services and Fixed–Mobile Convergence research
programmes. He leads Analysys Mason’s annual FTTx coverage, capex and conversion forecasts, and other recent areas of focus include
examining the retail tariff strategies employed by operators for early launches of 5G fixed-wireless access (FWA). Stephen has more than 12
years of experience in the telecoms sector and is a graduate in Philosophy, Politics and Economics from St Catherine's College, Oxford
University.FTTP challengers in developed markets: case studies and analysis 29
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FTTP challengers in developed markets: case studies and analysis
PUBLISHED BY ANALYSYS MASON LIMITED IN DECEMBER 2020
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