Thursday, March 16, 2006

Tele2 first triple play mover in the Netherlands

Tele2 has started with the offer of triple play as first company in the Netherlands. The IP package contains telephone, internet and television. The television package contains 32 television and 21 radio stations; subscribers can also requests movies and television series on demand. BBC will not be available in the package. Subscribers will pay the first half year 40 euro per month and later 45 euro per month. This year the soccer games will be included, but in 2007 live images will cost 10 euro extra.

So far various telco and cable operators such as KPN, UPC and Casema have offered twin play with internet and telephone or separately terrestrial, digital television. Tele2 has now beaten KPN. This incumbent will offer triple play in one package by fast ADSL by the second quarter of the year.

The move of Tele2 is strategically. Tele2 moves with the experience of Versatel, which it acquired last summer for 1,34 billion euro. Versatel bought the rights to the highest division of the Dutch soccer competition. In the meantime it has gained experience in IPTV. But there is also another reason to be ahead of KPN, Scarlet and the cable operators. Versatel owns a glass fibre network, but this covers only 65 percent of the Dutch households. So it is essential for Tele2 to be the first mover.

Tele2 has learned from the Versatel experience. At the start if IPTV soccer Versatel boasted to have 100.000 subscribers before the beginning of 2006. It just reached 60.000 euro. For the triple play package Tele2 does not present a forecast, but the investors will not be happy with some ten thousands of subscribers, according to the operational manager G√ľnther Vogelpoel.

It will be interesting to see how triple play will be accepted by the household. Looking at the first reactions to the news items and in blogs, people are not too positive. There are many negative reactions about the Versatel/Tele2 help desk, bad signals and complete non functioning set-ups. Bad signals are still a problem for all the operators. KPN recently had to recognise that there are still problems with IP telephone as telephone interfere with internet signals.

It will be for the first time that cable operators will get full competition from telecom operators. So far they have had almost a monopoly on the distribution of television. They were late with the distribution of internet, when around 2000 they started to take internet seriously. They have also been active in telephone, but not fanatically. Now they will have to compete with telecom companies for triple play subscribers.

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