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August 30, 2006 Making Broadband Triple Play Profitable: Austriaby Lars Godell with Michelle de Lussanet, Lizet Menke |
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This is an excerpt
Executive Summary
Austrian consumers appear interested in cable-based triple play, but do not want to pay a lot for the bundle. This means that incumbent telco Telekom Austria will struggle mightily to make money on its IPTV-based triple-play offering. Forrester's new, detailed, bottom-up P&L model looks at the profit potential from 15 main revenue categories across 17 countries and shows that the vendor-recommended solution that requires significant deep fiber investments would be financial suicide for Telekom Austria — if Telekom Austria were to follow this strategy. We predict a cumulative per-subscriber loss of €2,286 in year 10, thanks to low revenue growth and massive backhaul costs. In addition to limited price tolerance from Austrian consumers, IPTV-based triple play is also up against well-entrenched and inexpensive cable and satellite TV offerings, thereby limiting revenue growth. What can Telekom Austria expect if it continues down this path? High investment costs and lots of price and content competition for TV subscribers.
Features
Model: Austrian Triple Play Generates Losses Of €2,286 Per Subscriber
This is an excerpt
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