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September 26, 2006 Making Broadband Triple Play Profitable: PortugalThis is the 12th document in the "Making Broadband Triple Play Profitable" series.by Lars Godell with Michelle de Lussanet, Lizet Menke, Ricardo Arruda, Andrea Carini |
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This is an excerpt
Executive Summary
Portuguese consumers don't appear very interested in triple play and do not want to pay a lot for the bundle. This means that incumbent telco Portugal Telecom will struggle to make money on its future 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 Portugal Telecom — if Portugal Telecom were to follow this strategy. We predict a cumulative per-subscriber loss of €1,753 in year 10, due to low revenue growth and massive backhaul costs. In addition to limited price tolerance from Portuguese consumers, IPTV-based triple play is also up against well-entrenched and inexpensive cable TV offerings and a DTT service likely to be free, thereby limiting revenue growth. What can Portugal Telecom expect if it continues down this path? High investment costs and lots of price and content competition for TV subscribers.
Features
Model: Portuguese Triple Play Generates Losses Of €1,753 Per Subscriber
This is an excerpt
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