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IPTV and the drive for ARPU uplift

14 марта 2008

While much of the global IPTV market is still in its infancy, in some markets telecoms providers are already looking past the customer acquisition phase to boosting revenues from their TV offerings.

But while some believe they can increase average revenue per user from their customers, others are looking at more indirect ways to make TV pay.

IPTV services in some markets, certain Western European countries in particular, are more mature than in others and as such operators are in the second stage of deployment.
That is, "they capitalise on their customer base... [and] work on ARPU development," said Nicolas Bry, director of products and service at France's Neuf Cegetel, told attendees at the IPTV World Forum in London this week.

is one of the world's most advanced IPTV markets and competition between the major operators is fierce. The standard price for IPTV is €29.90 per month, a figure set by Free, the first operator to launch, as long ago as 2003, and "it has never moved since," said Bry.

In addition to plans to boost its 750,000-strong TV customer base to 1 million this year, Neuf Cegetel is keen "to develop ARPU and to reduce churn," Bry said. 

One way the operator hopes to boost ARPU is by launching additional pay-TV channel bouquets at prices lower than those already on the market.
It offers a €20 package, which includes movies and adult content, and a €10.90 packages, including kids TV, sport, information and news. The latter "has met with great success," said Bry, explaining that all entry-level channel bouquets in France cost around €20.

Boosting video-on-demand usage is also key to Neuf Cegetel's plans.

"We have built a next-generation VoD interface," said Bry, which provides users with easy access to on-demand content.
In addition, "we have worked on marketing our content," and launched special promotions, such as weekend rates for video-on-demand.

But not all IPTV providers are confident in their ability to get a greater share of the consumer's wallet.

Value-added services, such as VoD and gaming, are vital, said Joao Mendes Pedro, IPTV business manager at
Portugal's Sonaecom, adding that the company has 25% VoD penetration of its TV customer base and has managed to maintain VoD penetration at between 20% and 30%, despite some fluctuation.

IPTV and the drive for ARPU uplift"We are not very optimistic about getting a lot of money from the VAS we have so far," said Mendes Pedro.

But he went on to say that he is not worried about not generating revenue from VAS, "at least right now," since these services act as a differentiator for the telco's TV offering.

"I would launch services for free if they would give me... differentiation versus my competitors," he said.

Indeed, many believe that if telecoms operators can amass sufficiently large subscriber bases – and differentiation will be key to that – then the revenues will come from advertising.

"[IPTV is] a massive opportunity to get significantly more data out of your user base," than any traditional broadcaster, said Geoff Todd, director of new media at NDS.

"You should be connecting with the advertising providers." That is the source of revenue, he added.

"Telcos... need to move from being gorillas... to being guerrillas," added Eugene Sarmiento, head of sales, development, content and media at Ericsson, noting that market segmentation, customisation and personalisation will attract users to IPTV and will draw in the advertising revenues.

Источник: Total Telecom

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