Blurring the line between platforms
Recent manoeuvres in the telecoms industry in Ireland has marked the expanding choice of so-called ‘triple-play’ services however with such stiff competition the race is on to push things to the next level into the arena of ‘quad-play’.
Triple-play services can technically mean any combination of three services and is generally used in the communications industry. Companies that offer triple-play packages usually encourage users to buy into multiple services at once, offering them savings on the cost of buying each service independently.
Quad-play extends the same concept to all four communications services – namely home phone, broadband, mobile phone and television. Across Europe at the moment a number of providers have made this push beyond three-tier services, the closest example to Ireland being Virgin Media in the UK.
Companies like Eircom and UPC are already offering triple-play services to Irish customers, although the combination of services on offer differs.
For Eircom, the missing component is television but it is an area they have already dipped their toe in, most notably with a deal that allowed its broadband subscribers to watch Setanta Sports online.
“[The Setanta deal] has had a high appeal for sports fans and by way of usage we’ve had up to 70,000 in a week depending on what sporting event is taking place” says Gerry Culligan, director of consumer markets in Eircom. “We are also offering exclusive content on Meteor as part of our sponsorship deal with TV3′s The Apprentice which includes unseen clips and highlights from the TV show.”
In addition to content deals Eircom also piloted an IPTV service in Dublin in recent months, which aimed to see what interest their was in such a service in the future.
“We got a lot of really positive feedback from that trial recently, particularly in relation to the ‘video on demand’ component,” says Mr. Cullivan.
The reality is that companies like Eircom cannot afford to ignore quad-play, no matter what service it is that they are missing.
In recent months UPC has also started an aggressive marketing campaign against the telecoms company and its TV rival Sky, promising large savings to those who get their TV, phone and broadband from them instead.
So how has UPC’s push for telecoms market share impacted upon the market and the way Eircom is looking at television services?
“Obviously the competitive landscape is changing and in the same way we’re looking to expand into TV cable operators such as UPC have been looking to expand into fixed line services” says Mr. Cullivan. “I have no doubt that there is room for a third challenger in the TV market in Ireland.”
Besides its IPTV trial Eircom is also a shareholder in the commercial contract for a Digital Terrestrial Television (DTT) service, which will launch in the second half of 2010 if everything goes to plan before then.
However bundled services can – and in today’s converging world – should be about more than a cheaper monthly bill for customers. As the various devices used by consumers become more sophisticated so too do the applications and features they can handle, potential not lost on Mr. Cullivan.
“What I would classify as a ‘multi-play’ services is TV to the three screens, namely television, computer and mobile,” he says. “This is a key part of any future offerings and content deals would apply to the TV in your living room, your laptop if you’re on the move and even your phone.”
Another potential area of “convergence” is between phone connections. At the moment it is possible to configure a VoIP-enabled mobile phone so that it automatically switches from the cellular network to the home’s once it comes into wireless range. This can even happen mid-call meaning customers could end up paying home phone rates for calls they may on their mobile, assuming they do so at home.
Mr. Cullivan says these kinds of technologies are being looked at by Eircom at the moment but their reliability is an issue and it may be some time before there is a marketable equivalent available.
For Eircom, there is a logical path between its current situation and a TV offering whether it is done through DTT, IPTV or both. For a company like UPC, however, this is not the case.
The current UPC offering runs entirely through the company’s cable network and the huge investment made is allowing for additional services like high-speed broadband to be added in more areas. However there is nothing within that network that allows UPC to start offering mobile connections to customers too.
In the past this would have forced them to either win a mobile licence – none of which are available any more – or buy an existing mobile operator if they wished to compete in this area. Due to regulation changes the company now has the option of becoming a Mobile Virtual Network Operator (MVNO), effectively renting space on an existing network and selling the service under its own brand.
This is how Tesco have become mobile players in Ireland, operating from the O2 network and repackaging services under its own name.
As a result of this massive change becoming a mobile provider is significantly easier – and cheaper – than it ever was. Whether companies like UPC have any intention of utilising this in the near future remains to be seen, however, and a company spokesperson had not responded with the company’s current stance at the time of going to print.
For quad-play services in Ireland it is a question of ‘when’ and not ‘if’. Who will lead the charge, and how much of a head-start they can get on their rivals, also remains to be seen but what is certain is that the line dividing communications platforms is about to become more blurred than ever.