Best Practice Promotions: Convergence
2012.12.30   |   58 pages   |   Fixed-Mobile Convergence

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In the earlier Maximising Wireless Profit (MWP) Convergence Watch - Key European Markets (October 2012) we highlighted a significant upturn in the level of competition amongst telecom providers trying to hold on to existing customers whilst also poaching new customers from competitors. The decline in economic conditions across Europe has led to a vicious circle as customers reduce consumption and attempt to optimise their telecom spend on tariffs by seeking out better deals, further exacerbating competition and price reductions.

As reported in Convergence & Bundling: Promotional Offers (November 2011), customers are increasingly used to purchasing their communication services as a bundle and have become more savvy when weighing up the savings and overall benefits they receive through convergence of supply.

All operators engage in discounting and it is a widely used and accepted tactic. However, there is a risk of the discounted price becoming the future expected price and operators may then find they have to further reduce the cost of the proposition beyond the original discounted price point.

In addition to price competition and discounting, almost all operators provide value added services and benefits in order to attract and keep customers. These benefits and services include TV channels and premium content, online movies, attractive mobile phone and mobile broadband tariffs, handset and USB modem subsidies, handset insurance, music services, cloud storage, faster fixed broadband network speeds, home entertainment and gaming accessories.

There are still many promotions focused on consolidation arbitrage (i.e. supply convergence) and discounts that last for a fraction of the total commitment length (e.g. the first six or 12 months of a two-year contract). However, network convergence now represents the largest proportion of propositions and promotions, stimulated by the rollout of high speed VDSL and fibre network services capable of delivering advanced network services such as online movies, complemented by LTE 4G networks.

This report examines a selection of dual-, triple- and quadruple-play promotions and propositions, highlighting the tactics used by operators to attract and retain customers and concludes with a selection of tactics and incentives operators can use to increase the attractiveness of their own converged propositions.

Keywords: dual-play, quadruple-play, Bundling, Fixed Mobile Convergence, triple-play,

Table of Contents
1 Overview 1
2 Introduction - MNO Promotional Goals 2
2.1 Background to the Report 2
2.2 Report Content 2
2.3 Currency and Conversions 3
2.4 Further Questions and Feedback 3
3 Tactics Promoting Convergence 4
3.1 Discounting, Subsides and Value Add 4
3.1.1 Convergence Definitions 5
3.1.2 Convergence Promotions Coverage 5
4 Supply Convergence 10
4.1 Introduction 10
4.2 A1 Austria 10
4.2.1 Home Internet, Phone and TV 10
4.2.1.1 Mobile Component to Bundle 10
4.2.1.2 TV Component to Bundle 11
4.2.1.3 Opting for Faster Broadband Connection 11
4.2.2 A1 Combine and Save Options 11
4.3 O2 Germany 14
4.3.1 Broadband and Phone and Mobile Broadband 14
4.4 1&1 Germany 15
4.4.1 Broadband and Home Phone Doppel-Flat Promotion 15
4.5 Kabel Deutschland 16
4.5.1 Broadband and Home Phone Promotion 16
4.5.2 Adding a Mobile Connection to the Dual-Play Bundle 17
4.6 Orange Spain 18
4.6.1 Broadband, Home Phone and Mobile Combine and Save 18
4.7 TIM Italy 19
4.7.1 Broadband and Phone 19
4.7.2 Fibre Broadband and Home Phone 20
4.8 Vodafone Qatar 21
4.8.1 Fibre Broadband and Home Phone 21
5 Device Convergence 22
5.1 Introduction 22
5.2 3 Austria 22
5.2.1 3Mediabox Internet and TV 22
6 Network Convergence 24
6.1 Introduction 24
6.2 Belgacom Belgium 24
6.2.1 Broadband and TV with Home and/or Mobile Phone 24
6.3 Swisscom 26
6.3.1 Broadband, TV, Home Phone With the Option to Add Mobile 26
6.3.2 Incentive to Add Mobile Phone or Mobile Data Subscription 27
6.3.2.1 Data Benefit 28
6.4 M1 Singapore 29
6.4.1 Fibre Broadband and Home Phone - Targeting Online Gamers 29
6.5 Virgin Media UK 30
6.5.1 Broadband, TV and Home Bundles 30
6.5.2 Mobile Benefits and Deals for Virgin Media Customers 31
6.6 Etisalat United Arab Emirates (UAE) 33
6.6.1 Fibre Broadband, Home Phone and TV 33
6.7 AT&T USA 34
6.7.1 Broadband, Home Phone, TV 34
6.7.2 Adding Mobile to Broadband, Home Phone and TV 36
6.7.3 Extending The TV to Mobile 36
6.8 Orange France 37
6.8.1 Internet, TV and Home Phone Packages 37
6.8.1.1 Adding a Mobile Broadband and/or Music Subscription 38
6.8.1.2 Incentive to Switch ISP 38
6.8.1.3 Associated Promotional Incentives 38
6.8.2 Orange Open Quad-Play Plans 40
6.9 SFR France 41
6.9.1 Broadband, Home Phone and TV 41
6.9.2 Multi-Packs - SFR Box With Mobile 42
6.9.3 SFR Mobile Broadband and Tablet Promotion 44
6.10 Bouygues Telecom France 45
6.10.1 Broadband, Home Phone, TV and Mobile 45
6.11 Free France 46
6.11.1 Broadband, Home Phone and TV With Mobile 46
6.12 Telia Sweden 47
6.12.1 Broadband Package Bundled With Music Accessory 47
6.12.2 Telia TV Initiatives 48
6.13 Deutsche Telekom 48
6.13.1 Broadband, Home Phone and TV 48
6.14 Vodafone Germany 50
6.14.1 Broadband, Home Phone and TV 50
6.14.2 Vodafone LTE Home Broadband and Phone Promotion 50
6.15 Vodafone Spain 51
6.15.1 Broadband & Home Phone With TV Option 51
6.15.1.1 TV Component 52
6.15.2 New Broadband, Home Phone and Mobile Proposition 52
6.16 Optimus Portugal 54
6.16.1 Broadband, Phone and TV with Mobile Broadband 54
7 Conclusions and Recommendations 56
7.1 Conclusions 56
7.2 Recommendations 57
  Appendix - Feedback Questions 59

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