Monday, August 20, 2007

TI ISP Alice ready to seduce the Dutch consumer

After Italy, Germany and France, Telecom Italia is set to conquer 15 per cent of the Dutch consumer market with its ISP service Alice. With a sharp offer, combining internet and telecom, Alice has to seduce dissatisfied consumers. The service will be run by Bbned, a subsidiary of Telecom Italia.

Bbned is not new on the Dutch market. The company has so far worked in the business sector of the market and has built up a good reputation. It has been successful in selling DSL solutions and in acquiring various glass fibre projects in the Netherlands such as the Amsterdam Cityring and the Rotterdam Port Authority.

But now Bbned will also run the consumer ISP service Alice, a service already introduced in Italy, Germany and France. Bbned can rely for its internet services on its experience in the business sector and the recently acquired ISP InterNLnet, which will give second line assistance to the help desk. For the telecom services Alice will make use of the services of the Telecom Italia subsidiaries Pilmo en Talk4free.

Alice will compete with the other ISPs with very sharp tariffs and conditions. In fact Alice will have to win over the dissatisfied consumers of KPN, Tele2 and the cable companies; they are accused of being expensive, inflexible, unreasonable in agreements, incompetent as far as help desks go and providing a lousy service. A survey by TNS NIPO on behalf of Orange Broadband showed that the majority of the respondents had the feeling that they paid too much for internet (53 pct) and telephony (69 pct).

In the internet package the speed is remarkable. Alice offers one speed up to 20Mbps and does not have other speeds, usually lower speeds as the other ISPs do. In the package is also a free telecom service to all fixed line subscribers included. All this for 30 euro a month. Given the speed of internet access this is really sharp as for example KPN and UPC ask almost double for this speed in combination with a telephone service.

The offer is simple. Administratively, the user does not have a fixed time contract with Bbned; the user can change monthly. The user will pay one month ahead. Besides the standard package a foreign telecom package is available at 20 euro for limitless worldwide calling, except for some countries where there is a limit of 500 minutes. A modem, installed by a user, is delivered at 10 euro and an installation engineer is available for 70 euro.

Will Alice make it in the Netherlands?. I personally think so. The absence of a fixed time agreement, the speed of the internet connection and the monthly fee will be the USPs. Dissatisfaction will do the rest. Of course the offer will be a challenge for the incumbent telcom KPN, as it dominates the broadband market through various brands like XS4ALL, Tiscali and the Net, but is unwilling to increase the speed or lower the tariff. Also the cable companies will get a problem as they have a differentiation of speeds and tariffs. For a speed of 8Mbps a user will pay almost 50 euros; originally this tariff was for 9Mbps but UPC decreased the speed from 9 to 8 Mbps without informing the users by e-mail or snail mail.

Cable companies have even more the problem of triple play. If one of the media is not working properly, user will threaten the cable company to discontinue the subscription for television, telephone and internet. I spoke to a UPC subscriber last week, who had problems with the quality of the analogue transmission of the television stations. A discussion with the help desk did not do him much good. He was advised to get some other cable fixtures, this while his present fixtures were replaced by a UPC licensed engineer last December. Reason for the change of fixtures would be the digital ether broadcast Digitenne in Almere. But this transmission tower was already in operation when the UPC licensed engineer replaced the fixtures last December. Absolute incompetence at the UPC help desk. This type of missers is a market chance for Alice. Of course Alice does not have a triple play as it lacks a television package, but even with the initial costs of Alice and a subscription to Digitenne the user will save money in less than half year.

Alice light the fire!

Blog Posting Number: 843

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