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Both European telcos and cable TV operators have em-
braced the quad play, however.
“European telecoms and cable operators increasingly
offer bundled products, delivering combinations of pay-TV,
broadband and fixed-line and mobile voice as a package,”
say analysts at Standard and Poors. “Bundling can help op-
erators generate higher revenues by cross-selling services to
increase the number of customers and average revenue per
user (ARPU), and raise customer loyalty, reducing churn
rates by up to 50 percent.”
Few U.S. telcos are so sanguine. “From our perspective,
having owned wireless and wireline assets on a common
footprint, we spent a good amount of energy trying to find
that magical combination of triple play plus wireless to cre-
ate an exceptional value for customers,” John Stratton, Ve-
rizon executive vice president said. “In our experience, be-
yond a bottom of bill discount, we did not see a compelling
case or the buyer moving in one direction to consolidate
those services because they serve very different needs.”
One reason cable wants to get into the mobile business is
quite simple: mobility is where the majority of the revenue
opportunity now lies in the communications business. By
conservative estimates, global mobile revenue is about twice
as large as global fixed revenues.
From 2014 to 2019 fixed network service revenue will
grow from $1.0 trillion to $1.1 trillion at a compound an-
nual growth rate (CAGR) of 0.8 percent, according to
Insight Research. Mobile revenue will grow from $1.1 tril-
lion to $1.3 trillion at a CAGR of 3.3 percent. By 2019 the
mobile market will be 25 percent bigger than the wireline
market, according to Insight Research. Other estimates,
such as by researchers at Ovum, peg mobile revenues at
twice the size of fixed revenues by 2019.
Notably, in many regions such as Asia and Africa,
mobile revenue will outstrip fixed revenue by even
wider margins.
In the United States, and now in some other regions
such as Europe, cable TV operators have emerged as
the biggest competitors to telcos, have taken leadership
of the high-speed access market, have emerged as the
second-biggest providers of consumer voice, are a sig-
nificant presence in small business voice and data mar-
kets, and are preparing for assaults on the enterprise and
mobile markets.
Those developments will have significant impact – both
positive and negative – on all other ecosystem participants.
Fixed and mobile service providers are going to lose market
share and face more pressure on profit margins. Customers
are going to gain options.
Channel partners might, or might not, benefit. Mobile
and enterprise tend to be products suppliers can sell direct,
to a great extent.
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