KPN’s triple play will take time

The third leg of the Dutch incumbent telco KPN’s triple play experiences some difficulties. KPN had promised a national service by the second half of 2006, but told the press that it would be 2007 when national roll-out would be realised.

KPN decided in 2005 to go the triple play way. The company had almost everything it needed in order to realise its strategy: Internet ADSL. But the company had to start building up its expertise in the television field. It used to have, as the cable company Casema was part of it, but had to split off for monopoly reasons. Its only foothold in the television was a department taking care of broadcast transmission facilities. So when KPN decided that it was going to be a triple play company, it started to move fast.

KPN had bought a share in the digital terrestrial broadcast service Digitenne as it was also the partner that would deliver the transmission facilities. Digitenne was a joint venture of the Dutch broadcast companies and the broadcast antenna park Nozema. When that company went on sale, KPN was there to acquire it as part of its triple play policy. However the acquisition is moving slower than expected and now causes a slow-down for KPN on the introduction of the national digital television network.

In the meantime KPN has worked on its content side. It has developed the service KPN Mine, which has agreements with 60 television channels and 70 radio channels. This portfolio is larger that the portfolio’s of the cable companies, which usually have less than 40 television channels (I have 32 television channels and 39 radio channels; but who has time to see them all). There is an on-demand service with some 500 movies delivered by Warner Bros and Blockbuster Entertainment. In the second quarter of 2006 KPN had 230.000 subscribers; a rise of 23.000 subscribers.

It will be quite a job for KPN to fight the cable operators as KPN is still seen as a telecom company and not a television company or combined telecom and television company. In order to get subscriptions in it will have to use all the present clients it has already in ADSL (1,9 million), VOIP (156.000) and mobile (8,3 million). Of course the fixed line subscribers still form a large group of potential triple players to be addressed. But given the fact that most of them do not have an ADSL subscription with them will be a difficulty. Besides the fixed line business of KPN is declining as they lost 253.000 subscribers in the last half-year, of which 165.000 clients in the second quarter.

The delay of the national roll-out is no good news for KPN. For the cable operators it is good news as they can organise themselves better after the acquisitions (Multikabel, Casema, Essent Kabelcom). Also the common promotion of the cable operators Cable Digital can be prolonged.

Tags: triple play, kpn

Blog Posting Number: 468