Research report
Triple-play pricing study 2Q 2011: pricing options for bundling
mobile
Martin Scott
September 2011
Triple-play pricing study 2Q 2011: pricing options for bundling mobile
2
Contents
Contents
Slide no.
4. List of figures and tables
5. Document map – Executive summary
6. Executive summary
7. Document map – Introduction and scope
8. This report examines current and historical
broadband, double- and triple-play pricing across
Europe
9. Usage profiles model the difference between ‘light’,
‘typical’ and ‘heavy’ users
10. Document map – Service speed evolution
11. Median cable and VDSL downstream speeds
converged, but the median speed of FTTH/B fell in
2Q 2011
12. Median advertised VDSL upstream speeds caught
up with FTTH/B in 2Q 2011
13. Consumer broadband is available for less than
EUR0.1 per Mbit/s per month in Romania, Sweden
and Ukraine
14. Document map – Country-by-country pricing
comparison
15. Residents of around half of European countries can
buy fixed broadband for less than EUR20 per month
16. Incumbent operators are increasingly offering the
cheapest double-play services
17. Fewer than half of European countries have reached
the ‘gold standard’ EUR30 per month for triple-play
services
Slide no.
18. Document map – Incumbent versus altnet
19. Most incumbents maintain high premiums for
standalone/ naked broadband services to cover the
cost of the local loop
20. Broadband-plus-voice prices are higher among
incumbents, because they benefit from customer
inertia
21. Cablecos can offer triple-play bundles at competitive
prices because they can recoup content costs
elsewhere
22. Document map – Promotional pricing
23. Fixed broadband promotions tend to have the
features of one or more of four basic types
24. Service providers must tailor price promotions to
local preferences
25. The most-aggressive pricing promotions promise
better-than-half-price broadband during a two-year
period
26. Document map – Price premiums for higher
speeds, and voice and TV services
27. The ultra-fast broadband premium fell to 14% in 2Q
2011
28. The price premium for voice and TV services varies
significantly between countries
29. Document map – Introducing mobility to fixed
bundles
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Triple-play pricing study 2Q 2011: pricing options for bundling mobile
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Contents
Contents
Slide no.
30. Mobile broadband pricing undercuts comparable
entry-level fixed broadband packages in most of
Western Europe
31. From triple-play to multi-play: converged operators
are finally bundling fixed and mobile services more
tightly
32. The price premium for mobile broadband varies, but
EUR10–15 per month is most common
33. Consumers save an average of 35% on mobile
broadband when they buy it as part of a service
bundle
34. Document map – How to use the pivot charts in
the data annex
35. How to use the pivot charts in the data annex
36. Document map – About the author and Analysys
Mason
37. About the author
38. Copyright and disclaimer
39. About Analysys Mason
40. Research from Analysys Mason
41. Consulting from Analysys Mason
© Analysys Mason Limited 2011
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Contents
List of tables and figures
Slide no.
6. Figure 1: Unweighted mean price per megabit per
second for residential fixed broadband access,
Europe and the USA, 2003–2Q 2011
9. Figure 2: Inputs into the voice usage profile
11. Figure 3: Unweighted median downstream
broadband speed by access technology, Europe and
the USA, 2003–2Q 2011
12. Figure 4: Unweighted median upstream broadband
speed by access technology, Europe and the USA,
2003–2Q 2011
13. Figure 5: Unweighted mean price per megabit per
second for residential fixed broadband access,
Europe and the USA, 2003–2Q 2011
13. Figure 6: Price per megabit per second of the ten
least-expensive services in Europe, 2Q 2011
15. Figure 7: Price of the least-expensive broadband
access service (without voice) for a typical user by
country, 2Q 2011
16. Figure 8: Price of the least-expensive DSL and voice
combinations for a typical user by country, 2Q 2011
17. Figure 9: Price of the least-expensive triple-play
service for a typical user by country, 2Q 2011
19. Figure 10: Price premium for the incumbent’s leastexpensive standalone broadband service in selected
countries, 2Q 2011
20. Figure 11: Price premium for the incumbent’s leastexpensive broadband and voice services in selected
countries, 2Q 2011
Slide no.
21. Figure 12: Price premium for the incumbent's leastexpensive triple-play service in selected countries,
2Q 2011
23. Table 1: Types of fixed broadband promotion
24. Figure 13: The relative attractiveness of broadband
pricing promotions, by country
25. Figure 14: The top-ten fixed broadband price
promotions, 2Q 2011
27. Figure 15: Comparison of the median price of
different types of fixed broadband service bundle for
a typical user, Europe and the USA, 4Q 2008–
2Q 2011
28. Figure 16: Relative pricing of the least-expensive
single-, double- and triple-play packages by country,
2Q 2011
30. Figure 17: Comparison of the least-expensive fixed
and mobile broadband services in selected European
countries, 2Q 2011
32. Figure 18: Distribution of the incremental price of
bundled mobile broadband on top of other fixed
services in a bundle, Europe and the USA, 2Q 2011
33. Table 2: Strategies for pricing mobile broadband as
part of a service bundle
35. Figure 19: How to use the pivot charts in the Tripleplay pricing study data annex
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Document map: Executive summary
Document map
Executive summary
Introduction and scope
Service speed evolution
Country-by-country pricing comparison
Incumbent versus altnet
Promotional pricing
Price premiums for higher speeds, and voice and TV services
Introducing mobility to fixed bundles
How to use the pivot charts in the data annex
About the author and Analysys Mason
© Analysys Mason Limited 2011
Triple-play pricing study 2Q 2011: pricing options for bundling mobile
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Executive summary
Executive summary


Superficially, 2011 has been ‘business as usual’
for fixed operators. The exponential decline in the
price per megabit per second for fixed broadband
in Europe and the USA continues – falling to an
average of EUR4.1 per Mbit/s per month in the
second quarter of 2011 (2Q 2011). Tariffs
remained relatively static in the first half of the
year. Nonetheless, several notable shifts in the
service landscape may boost ARPU – namely
ultra-fast broadband and fixed–mobile bundling.
The price premium for ultra-fast broadband
continued to decline – to 14% in 2Q 2011. More
positively, VDSL services are proving to be solid
competitors to cable in the short term – median
downstream speeds for VDSL and cable modem
stood at 24.0Mbit/s and 24.6Mbit/s respectively in
2Q 2011. The median upstream speed for VDSL
has surged to 10Mbit/s.
Fixed–mobile bundling is widespread enough that
we can analyse the mobile element of these
bundles and categorise approaches.
Figure 1: Unweighted mean price per megabit per second for
residential fixed broadband access, Europe and the USA,
2003–2Q 2011 [Source: Analysys Mason, 2011]
80
Price per megabit per second (EUR per month)

70
60
50
40
30
20
10
0
2003 2004 2005 2006 2007 2008 2009 2010 2011
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Document map: Introduction and scope
Document map
Executive summary
Introduction and scope
Service speed evolution
Country-by-country pricing comparison
Incumbent versus altnet
Promotional pricing
Price premiums for higher speeds, and voice and TV services
Introducing mobility to fixed bundles
How to use the pivot charts in the data annex
About the author and Analysys Mason
© Analysys Mason Limited 2011
Triple-play pricing study 2Q 2011: pricing options for bundling mobile
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Introduction and scope
This report examines current and historical broadband,
double- and triple-play pricing across Europe

The Triple-play pricing study tracks the details of 1600 mass-market, fixed-broadband-based service bundles,
including fixed voice, mobile voice, mobile broadband and TV services. This tracker has grown out of work
that Analysys Research carried out in 2000 for the UK regulator at the time, Oftel, which involved taking a
snapshot of DSL prices and service levels in four countries. As prices and service levels have continued to
evolve rapidly, Analysys Mason has extended this study to cover all major Western European countries, a
number of Central and Eastern European countries as well as the USA. We have also added to the prices of
DSL those of cable-modem and residential fibre-based broadband services.

This report examines the results of the latest iteration of the Triple-play pricing study, for the second quarter of
2011, as well as data from previous versions, in order to benchmark trends in the pricing, bundling and
technical capabilities of fixed-broadband-based services. It considers:

the evolution of service speeds

the evolution in the price per megabit per second for broadband access

the relative pricing of broadband, double- and triple-play offers in countries benchmarked in the study

the latest trends in the promotional pricing of services, including an examination of what quantifies
typical promotional pricing and a list of the ‘top ten’ greatest savings for consumers

the price premium for ultra-fast broadband services, and voice and TV services

the difference in entry-level retail prices between incumbent and alternative operators

the value of mobile broadband services included in service bundles and the potential savings compared
with standalone mobile broadband.
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Introduction and scope
Usage profiles model the difference between ‘light’, ‘typical’
and ‘heavy’ users
Figure 2: Inputs into the voice usage profile [Source: Analysys
Mason, 2011]

Total country voice subscribers
Voice usage profile
Total country call volume
Average call duration
Line-rental tariff
Flat-rate portion of service tariff
Scalar for ‘light’, ‘typical’ and
‘heavy’ users
Per-minute voice and data tariff
Installation and set-up charges
Monthly price for basket of
usage
Promotional discounts
Bundled voice minutes
Data usage profile
Key:
Actual input
Modelled input

To provide an accurate benchmark of the actual
cost of services to consumers, usage profiles are
applied to the pricing study’s raw data (such as
line-rental charges and per-minute voice charges).
These profiles model the price that consumers will
see on their bill at the end of a month, and are
derived as per the process outlined in Figure 2.
Operators’ pricing strategies vary in different
markets. For example, some service providers
front-load consumer spend by applying ‘one-off’
charges for installation, set-up or CPE rather than
incorporating those costs with monthly access
charges. For this reason, we include and amortise
all of these one-off charges within our usage
profiles, over a 24-month period. (Note that we do
not include contract or service cancellation
charges.)
Derived value
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Document map: Service speed evolution
Document map
Executive summary
Introduction and scope
Service speed evolution
Country-by-country pricing comparison
Incumbent versus altnet
Promotional pricing
Price premiums for higher speeds, and voice and TV services
Introducing mobility to fixed bundles
How to use the pivot charts in the data annex
About the author and Analysys Mason
© Analysys Mason Limited 2011
Triple-play pricing study 2Q 2011: pricing options for bundling mobile
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Service speed evolution
Median cable and VDSL downstream speeds converged, but
the median speed of FTTH/B fell in 2Q 2011

The median advertised speed of DSL and cable
modem services were 8.0Mbit/s and 24.0Mbit/s
respectively in 2Q 2011. Median DSL speeds have
stagnated at 8.0Mbit/s, the upper limit for firstgeneration ADSL, because this technology
continues to account for just over half of all DSL
packages available from major service providers.
In 2Q 2011, 32% of cable modem services on the
market offered headline speeds of at least
50Mbit/s, compared with 22% in the fourth quarter
of 2010. Even if older generations of DSL no
longer effectively compete with cable modem in
terms of speed, VDSL continues to be a credible
contender: the median downstream speed of
VDSL increased to 24.6Mbit/s in 2Q 2011, staying
just ahead of the cable modem average.
Figure 3: Unweighted median downstream broadband speed
by access technology, Europe and the USA, 2003–2Q 2011
[Source: Analysys Mason, 2011]
Downstream speed (Mbit/s)

60
50
40
30
20
10
0
2003
All

2004
2005
DSL
2006
VDSL
2007
2008
2009
Cable modem
2010
2011
FTTH/B
The median downstream speed of FTTH/B and
apartment LAN services fell to 40Mbit/s in
2Q 2011. Some service providers have struggled
to increase the percentage of homes passed that
take a service. This may account for the increasing
number of lower-bandwidth services available at
cheaper prices.
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Service speed evolution
Median advertised VDSL upstream speeds caught up with
FTTH/B in 2Q 2011


The median advertised upstream speed of DSL
services slowly moved towards the theoretical
maximum of the ADSL and ADSL2+ standards in
2Q 2011, reaching 0.88Mbit/s (the maximum is
1Mbit/s).
Figure 4: Unweighted median upstream broadband speed by
access technology, Europe and the USA, 2003–2Q 2011
[Source: Analysys Mason, 2011]
10
Upstream speed (Mbit/s)
(Logarithmic scale)

By contrast, the upstream speeds of cable modem
continued to increase quickly, from 1.5Mbit/s in
4Q 2010 to 2.0Mbit/s in 2Q 2011.
The difference between the upstream speeds of
VDSL and cable modem is becoming more
pronounced – the median upstream speed of
VDSL services increased to 10Mbit/s in 2Q 2011,
up from 2Mbit/s in 4Q 2010. The upstream speeds
achievable with VDSL are an important
differentiator for these services relative to cable
modem. The majority of DOCSIS3.0 cable
upgrades to date have not implemented channel
bonding in upstream channels, meaning that the
services have more-limited capacity than VDSL.
1
0.1
2003
All

2004
2005
DSL
2006
VDSL
2007
2008
2009
Cable modem
2010
2011
FTTH/B
The median speed of upstream fibre and A-LAN
services maintained its historical level of 10Mbit/s.
This speed continues to be sufficient for almost all
current applications, although symmetric 100Mbit/s
services are available: 14% of the fibre/A-LAN
services offered upstream bandwidths of
100Mbit/s or higher in 2Q 2011 – as was the case
in 2010.
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Service speed evolution
Consumer broadband is available for less than EUR0.1 per
Mbit/s per month in Romania, Sweden and Ukraine

The price per megabit per second for residential
fixed broadband access continues to decline
exponentially. It fell from EUR7.5 in 4Q 2009 to
EUR4.9 in 4Q 2010 and then to EUR4.1 in
2Q 2011.
Western European countries are generally
expensive in terms of price per Mbit/s. The
exception is Tele2 in Sweden, which offers a
1Gbit/s residential service for EUR88.8 per month.
This makes Sweden the only Western European
country where one of the ten least-expensive
services is available on a per Mbit/s basis.
Romanian incumbent Romtelecom has previously
offered the cheapest service by this measure; a
100Mbit/s broadband service from the operator
costs EUR9.3 per month, but currency fluctuations
made the Tele2 deal better value in 2Q 2011.
Figure 5: Unweighted mean price per megabit per second for
residential fixed broadband access, Europe and the USA,
2003–2Q 2011 [Source: Analysys Mason, 2011]
Price per megabit per
second (EUR per month)

80
70
60
50
40
30
20
10
0
2003
2004
2005
2006
2007
2008
2009
2010
2011
Figure 6: Price per megabit per second of the ten leastexpensive services in Europe, 2Q 2011 [Source: Analysys
Mason, 2011]
Tele2 (Sweden)
Romtelecom (Romania)
RCS & RDS (Romania)
Vega (Ukraine)
Volia (Ukraine)
Balticum (Lithuania)
Baltkom (Latvia)
Lattelecom (Latvia)
TEO LT (Lithuania)
UPC (Romania)
0.00
0.05
0.10
0.15
Price per Mbit/s (EUR)
0.20
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Document map: Country-by-country pricing comparison
Document map
Executive summary
Introduction and scope
Service speed evolution
Country-by-country pricing comparison
Incumbent versus altnet
Promotional pricing
Price premiums for higher speeds, and voice and TV services
Introducing mobility to fixed bundles
How to use the pivot charts in the data annex
About the author and Analysys Mason
© Analysys Mason Limited 2011
Triple-play pricing study 2Q 2011: pricing options for bundling mobile
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Country-by-country pricing comparison
Residents of around half of European countries can buy
fixed broadband for less than EUR20 per month
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Percentage of sites
45
40
35
30
25
20
15
10
5
0
Ukraine
Romania
Lithuania
Latvia
Estonia
Slovakia
France
Turkey
Poland
USA
Belgium
Bulgaria
Austria
Croatia
Sweden
Norway
Netherlands
UK
Finland
Italy
Slovenia
Greece
Czech Republic
Ireland
Denmark
Switzerland
Spain
Price (EUR PPP per month)
Figure 7: Price of the least-expensive broadband access
service (without voice) for a typical user by country, 2Q 2011
[Source: Analysys Mason, 2011]1

This metric compares the least-expensive fixed
broadband services by country. Some consumers
have to pay the incumbent for line rental in order to
receive fixed broadband services. In these cases,
we include this charge in the calculation, but
assume that no call charges are incurred.

Allowing for purchasing power parity (PPP), the
price of the least-expensive broadband service
varies significantly between countries. Entry-level
broadband in Spain is around six times more
expensive than in Ukraine.

There is little correlation between fixed broadband
penetration and the relative price of entry-level
services. Factors other than price have a
significant impact on fixed broadband penetration,
including infrastructure coverage, operator choice
and the time since services were launched in the
country.

Double-play services are actually cheaper than
entry-level broadband prices in countries such as
Germany and the UK.
Line rental
Broadband subscription charge
Fixed broadband site penetration
1
Purchasing power parity (PPP) exchange rates are used to compare
the relative affordability of services in different countries.
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Country-by-country pricing comparison
Incumbent operators are increasingly offering the cheapest
double-play services
Figure 8: Price of the least-expensive DSL and voice
combinations for a typical user by country, 2Q 2011 [Source:
Analysys Mason, 2011]

Double-play service prices provide the ‘truest’
indication of the cost of broadband services
because most consumers subscribe to both fixed
broadband and fixed voice services.
40

Double-play packages, in which fixed broadband
and voice services are explicitly sold together,
increasingly offer a better deal for consumers than
purchasing the two services separately, because
they often include bundles of ‘free’ minutes, unlike
many standard incumbent line rental services.

DSL-based players continue to offer the cheapest
double-play packages in 20 of the 26 countries
where we observed double-play bundles. This is
partly because cablecos often include cable TV in
service bundles.

The number of incumbents offering the cheapest
double-play service in the market has increased –
we observed incumbents that had undercut all
major altnet competition in eight countries,
compared to six countries in 4Q 2010.
35
30
25
20
15
10
5
0
Latvia
Romania
Denmark
Estonia
Austria
Sweden
Ukraine
UK
Ireland
Germany
Slovakia
Switzerland
France
Poland
Netherlands
Italy
Slovenia
Croatia
Belgium
Bulgaria
USA
Norway
Greece
Turkey
Spain
Price (EUR PPP per month)
45
Extra line rental charge (EUR/month)
Broadband subscription charge (EUR/month)
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Country-by-country pricing comparison
Fewer than half of European countries have reached the
‘gold standard’ EUR30 per month for triple-play services
50
40
30
20
10
Broadband subscription charge (EUR/month)
Greece
Spain
Slovakia
USA
Switzerland
Belgium
Ireland
Croatia
Netherlands
Czech Republic
Italy
Slovenia
Norway
Poland
UK
Bulgaria
Germany
France
Austria
Latvia
Romania
Denmark
Estonia
0
Sweden
Price (EUR PPP per month)
Figure 9: Price of the least-expensive triple-play service for a typical user by country, 2Q 2011 [Source: Analysys Mason, 2011]
Extra line rental charge (EUR/month)
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Document map: Incumbent versus altnet
Document map
Executive summary
Introduction and scope
Service speed evolution
Country-by-country pricing comparison
Incumbent versus altnet
Promotional pricing
Price premiums for higher speeds, and voice and TV services
Introducing mobility to fixed bundles
How to use the pivot charts in the data annex
About the author and Analysys Mason
© Analysys Mason Limited 2011
Triple-play pricing study 2Q 2011: pricing options for bundling mobile
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Incumbent versus altnet
Most incumbents maintain high premiums for standalone/
naked broadband services to cover the cost of the local loop
Figure 10: Price premium for the incumbent’s least-expensive
standalone broadband service in selected countries, 2Q 2011
[Source: Analysys Mason, 2011]

For standalone broadband (that is, a broadband
connection with no voice connection, such as
naked DSL (NDSL)), cable operators are
frequently cheaper than DSL providers. In the 12
countries where the incumbent offers standalone
broadband, it is cheapest in just 2 and both are
based on FTTH rather than NDSL.

Incumbent operators frequently price NDSL
services only a fraction below DSL+PSTN services
to cover the cost of the PSTN line and to
encourage customers to keep voice services.
Take-up of NDSL services is therefore relatively
limited in many countries.

A reduction in retail NDSL prices is not in the
interests of most incumbent operators. Instead,
these operators are concentrating on retaining
PSTN customers, which should minimise overall
revenue loss.
80%
60%
40%
20%
0%
–20%
–40%
Slovakia
Romania
Finland
Sweden
Switzerland
Slovenia
USA
Austria
Czech Republic
Lithuania
Poland
Belgium
Latvia
–60%
Norway
Incumbent price premium for entry-level
broadband-only subscription
100%
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Incumbent versus altnet
Broadband-plus-voice prices are higher among incumbents,
because they benefit from customer inertia
Figure 11: Price premium for the incumbent’s least-expensive broadband and voice services in selected countries, 2Q 2011
[Source: Analysys Mason, 2011]
80%
60%
40%
20%
0%
–20%
USA
Greece
Belgium
Norway
Italy
France
Spain
Turkey
Germany
UK
Switzerland
Croatia
Romania
Ukraine
Slovenia
Poland
Sweden
Denmark
Ireland
–40%
Austria
Incumbent price premium for entry-level
DSL plus voice subscription
100%
Note: The chart compares all service bundles that are sold as a double-play package as well as cases where the consumer must purchase a
separate fixed voice service in order to receive the broadband service. In the latter case, the additional charge for the voice service is included in
the price premium calculation.
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Incumbent versus altnet
Cablecos can offer triple-play bundles at competitive prices
because they can recoup content costs elsewhere
Figure 12: Price premium for the incumbent's least-expensive
triple-play service in selected countries, 2Q 2011 [Source:
Analysys Mason, 2011]

Cablecos typically have the advantage of scale
when it comes to offering TV services as part of a
bundle – they generate further TV revenue from
non-broadband subscribers. On the other hand,
most DSL-based players offer TV services solely
through IPTV and hence all costs are attributed to
a subset of their broadband subscriber base.

Consequently, it is harder for DSL-based players
to reduce the price of TV within a triple-play bundle
– and therefore the overall price of a triple-play
bundle – because they cannot recoup revenue
from non-broadband TV subscribers.

Incumbents frequently charge at least 50% more
than competitors for triple-play services.

Service providers with IPTV assets must maintain
a premium image, with a strong content
proposition, in order to justify their price premium.
100%
80%
60%
40%
20%
0%
–20%
Denmark
Sweden
Romania
Slovenia
Italy
Spain
Estonia
Germany
Austria
Poland
Switzerland
Latvia
France
Belgium
Netherlands
UK
Slovakia
USA
Incumbent price premium for entry-level
triple-play subscription
120%
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Document map: Promotional pricing
Document map
Executive summary
Introduction and scope
Service speed evolution
Country-by-country pricing comparison
Incumbent versus altnet
Promotional pricing
Price premiums for higher speeds, and voice and TV services
Introducing mobility to fixed bundles
How to use the pivot charts in the data annex
About the author and Analysys Mason
© Analysys Mason Limited 2011
Triple-play pricing study 2Q 2011: pricing options for bundling mobile
23
Promotional pricing
Fixed broadband promotions tend to have the features of
one or more of four basic types
Table 1: Types of fixed broadband promotion [Source: Analysys Mason, 2011]
Typical Attractiveness
saving1 to consumers2
Type
Description
Rebate
or credit
In our 2010 Connected Consumer survey, the promotion type that consumers voted the
most attractive was that of receiving a rebate (or ‘cash back’) after subscribing to a service
for a number of months. While relatively unpopular in Spain, the UK and the USA, it was
very popular in France, Germany and Poland.
~3% ●●●●○
Equipment Rebates on CPE reduce a key barrier to subscriber adoption and can act as a positive
differentiator if the equipment includes additional features, such as Wi-Fi, DECT or TV
services. The magnitude of the savings that these promotions promise varies – from 10%
of the total cost of 24 months of service in 2Q 2010 down to 8% in 4Q 2010. It remained at
8% in 2Q 2011.
~8% ●●●○○
Access
Service providers that offer a reduction to monthly access charges tend to do so by
providing the first few months of service free of charge, or at a reduced rate, in order to
increase net subscriber additions. For example, UPC Slovakia offers the first six months of
its ENTRY EXTRA +100MB package at EUR35 per month before reverting to the standard
EUR90 per month.
~9% ●●○○○
Activation
The activation and installation fees are another potential barrier to entry that service
providers can reduce or eradicate through promotional pricing.
~6% ●●○○○
1
Calculated as a proportion of all costs required to set up and maintain a residential fixed broadband service for 24 months.
2
Key to attractiveness ratings: ●●●●● very attractive ○○○○○ not attractive. Values are based on feedback from our Connected Consumer survey.
Note: For the purposes of this report, offers of bundled voice or data minutes are not considered as promotions. Some price promotions may only be
available online – these are part of service provider initiatives to reduce customer service and provisioning costs.
© Analysys Mason Limited 2011
Triple-play pricing study 2Q 2011: pricing options for bundling mobile
24
Promotional pricing
Service providers must tailor price promotions to local
preferences
Figure 13: The relative attractiveness of broadband pricing
promotions, by country1 [Source: Analysys Mason, 2011]

Short-term price promotions are one of the most
commonly used forms of marketing strategy.
Promotions that removed financial barriers to
adoption (such as free equipment and free
activation) were the most appealing to consumers
in 2009. However, consumers in different countries
were less consistent about this in 2010, suggesting
that operators with a multinational footprint should
not apply the same strategy in all countries.
Equally, operators looking to emulate promotions
from another country may find that the results
differ considerably in their domestic markets.

Consumers in the UK and USA appear to be
similar – they prefer promotions that reduce the
financial barrier to entry and are attracted to ‘x
months free’ offers.

French, German and Polish consumers prefer
‘cash-back’ offers.

Spanish respondents are attracted to reduced
monthly fees and rebates.
Country
Low
1
Free
equipment
Reduced
monthly fee
Reduced upfront charges
Free extra
services
Reward card
points
Rebate
Price promotion
Overall
1
2
3
4
5
6
UK
4
3
2
1
5
6
France
1
2
5
3
6
4
Germany
1
3
4
2
5
6
Poland
1
3
2
4
5
6
Spain
2
3
1
5
4
6
USA
4
3
1
2
5
6
High
Rank of respondents’ preference
(1 = most attractive; 6 = least attractive)
Question: “Please place in order the relative attractiveness of the
following broadband pricing promotions, where ‘Top 1’ is the most
attractive offer and ‘Top 6’ is the least attractive.”; all respondents with
fixed broadband; n = 4918.
© Analysys Mason Limited 2011
Triple-play pricing study 2Q 2011: pricing options for bundling mobile
25
Promotional pricing
The most-aggressive pricing promotions promise betterthan-half-price broadband during a two-year period

Since we began tracking bundled price promotions in early 2009, the most-aggressive promotional savings in
the fixed broadband market remained stable at around 20–40%. However, operators in some Eastern and
Western European countries offered more-aggressive savings of 40–50% in 2011.
60%
50%
40%
30%
20%
10%
Rebate/credit
Activation
UPC (Hungary)
adsl start solo
Orange (Spain)
ADSL con Television de
Orange
Telia (Sweden)
Telia Bredband 10+
ZON Multimedia (Portugal)
ZON Net Cabo 30Mb + TV
FASTWEB (Italy)
FASTWEB JOY (DSL) +
Internet Mobile Maxiflat
TeliaSonera (Finland)
Entertainment Package
Canal Digital (Telenor)
(Norway)
Bredbåndspakken Mini
Vodafone (Germany)
Vodafone DSL Classic Paket +
TV
blizoo (CableTEL) (Bulgaria)
Blizoo.Net 15 mbps
0%
UPC (Slovakia)
ENTRY EXTRA + 100MB
Saving as a proportion of total
price of 24 months of service
Figure 14: The top-ten fixed broadband price promotions, 2Q 2011 [Source: Analysys Mason, 2011]
Equipment
Access
© Analysys Mason Limited 2011
Triple-play pricing study 2Q 2011: pricing options for bundling mobile
26
Document map: Price premium for higher speeds, and voice and TV services
Document map
Executive summary
Introduction and scope
Service speed evolution
Country-by-country pricing comparison
Incumbent versus altnet
Promotional pricing
Price premiums for higher speeds, and voice and TV services
Introducing mobility to fixed bundles
How to use the pivot charts in the data annex
About the author and Analysys Mason
© Analysys Mason Limited 2011
Triple-play pricing study 2Q 2011: pricing options for bundling mobile
27
Price premium for higher speeds, and voice and TV services
The ultra-fast broadband premium fell to 14% in 2Q 2011
60
30%
50
25%
40
20%
30
15%
20
10%
10
5%
0
0%
4Q 2009 2Q 2010 4Q 2010 2Q 2011
Entry-level broadband
All fixed broadband
Ultra-fast broadband
Ultra-fast broadband price premium
1
Please note that this series was previously dependent on estimated
EUR PPP exchange rates. Because we have revised these exchange
rates historically to reflect the availability of 2010 PPP factors, the
results published in this study are not comparable with, and are an
improvement on, those from previous versions of the study.
Ultra-fast broadband price premium
Price (EUR PPP per month)
Figure 15: Comparison of the median price of different
types of fixed broadband service bundle for a typical user,
Europe and the USA, 4Q 2008–2Q 2011 [Source: Analysys
Mason, 2011]1

The median price of broadband access increased
by EUR1.2 in the first half of 2011, to EUR47.4 in
2Q 2011. Entry-level prices also increased
marginally, by EUR30.0 to EUR31.6 per month in
2Q 2011.

On the other hand, the price of ultra-fast
broadband services has continued its gentle
descent, declining in the first six months of 2011 –
from EUR55.8 per month to EUR54.1 per month
and the price premium for ultra-fast broadband has
dropped to just 14%.

Results from our Connected Consumer survey
indicate that many consumers are unsure of the
benefit of ultra-fast broadband services.
Nonetheless, 25% of the European broadband
packages tracked in the pricing study offered
access speeds of 30Mbit/s or more in 2Q 2011.

Service providers must articulate the benefits of
ultra-fast broadband more clearly to consumers if
they are to stimulate significant take-up of the
services at a price premium.
© Analysys Mason Limited 2011
Triple-play pricing study 2Q 2011: pricing options for bundling mobile
28
Price premium for higher speeds, and voice and TV services
The price premium for voice and TV services varies
significantly between countries
400%
350%
300%
250%
200%
150%
100%
50%
Broadband
Double-play
Slovakia
Romania
USA
Turkey
Belgium
Ukraine
Poland
Latvia
Croatia
France
Greece
Ireland
Switzerland
Bulgaria
Netherlands
UK
Norway
Austria
Italy
Slovenia
Denmark
Spain
Czech Republic
Germany
Estonia
Sweden
Lithuania
0%
Finland
Price of cheapest service bundle as a percentage
of the cheapest price of broadband
Figure 16: Relative pricing of the least-expensive single-, double- and triple-play packages by country, 2Q 2011 [Source: Analysys
Mason, 2011]
Triple-play
Note: In countries where a double-play package is available at a lower cost than the least-expensive standalone broadband service, or where a triple-play
bundle is available at a lower cost than the least-expensive double-play package, only the service with the most elements is shown.
© Analysys Mason Limited 2011
Triple-play pricing study 2Q 2011: pricing options for bundling mobile
29
Document map: Introducing mobility to fixed bundles
Document map
Executive summary
Introduction and scope
Service speed evolution
Country-by-country pricing comparison
Incumbent versus altnet
Promotional pricing
Price premiums for higher speeds, and voice and TV services
Introducing mobility to fixed bundles
How to use the pivot charts in the data annex
About the author and Analysys Mason
© Analysys Mason Limited 2011
Triple-play pricing study 2Q 2011: pricing options for bundling mobile
30
Introducing mobility to fixed bundles
Mobile broadband pricing undercuts comparable entry-level
fixed broadband packages in most of Western Europe
Cheapest mobile broadband tariff (EUR PPP per month)
Figure 17: Comparison of the least-expensive fixed and
mobile broadband services in selected European countries,
2Q 20111 [Source: Analysys Mason, 2011]
In Central and Eastern Europe, use of mobile
broadband as a primary Internet access
technology is common. Relatively poor fixed
broadband coverage allows operators to charge a
premium for mobile broadband while maintaining
demand.

In Western Europe, broadband is often positioned
as a competitor to fixed broadband (particularly in
countries such as Austria), but is also frequently
used as a complementary service. Mobile
broadband tariffs in this region often significantly
undercut those for fixed broadband in order to
simultaneously encourage substitution and make
the service attractive as a complement to fixed.

The Netherlands and France are notable
exceptions – the least-expensive contract mobile
broadband services with a usage cap greater than
or equal to 3GB are almost twice as expensive as
the least-expensive fixed broadband services, in
line with the premium for mobile voice services in
these countries.
45
Netherlands
40
35
Bulgaria
Slovakia,
Turkey and
Croatia
30
France
25
Greece
Czech Rep.
Spain
Switzerland
20
Poland
The Baltics
15
Sweden
Romania
Ukraine
10
UK and
Ireland
Norway
Austria
5
Germany, Italy
and Slovenia
Finland
Denmark
0
0
5
10
15
20
25
30
35
40
45
Cheapest fixed broadband tariff (EUR PPP per month)
1

Mobile broadband data collected in 1Q 2011; this chart compares the
least-expensive contract tariff with a usage cap equal to or greater
than 3GB per month for both fixed and mobile broadband.
© Analysys Mason Limited 2011
Triple-play pricing study 2Q 2011: pricing options for bundling mobile
31
Introducing mobility to fixed bundles
From triple-play to multi-play: converged operators are
finally bundling fixed and mobile services more tightly

A1 Telekom Austria and Latvian operator Baltcom launched the first fixed–mobile service bundles in the first
half of 2008. Since then, a number of converged operators, primarily MNOs rather than MVNOs, have begun
to bundle fixed and mobile services more tightly. As part of the Triple-play pricing study 2Q 2011, we have
observed that the following operators are offering fixed–mobile bundles:
Operators bundling
mobile broadband into fixed service bundles






Austria – A1 Telekom
Austria


Belgium – Belgacom
Czech Republic –
Telefónica O2

Finland – TeliaSonera

France – France Telecom Orange

Germany – Vodafone,
Alice

Hungary – T-Online, Invitel

Ireland – Vodafone

Italy – FASTWEB


Operators bundling
mobile voice into fixed service bundles
Norway – NextGenTel

Austria – A1 Telekom Austria
Poland – Netia,
Multimedia Polska

Belgium – Belgacom

Belgium – Scarlet

Bulgaria – VIVACOM

Germany – Alice

Hungary – T-Online

Latvia – Baltcom

Romania – RCS & RDS
Sweden – Telia, Com
Hem, Bredbandsbolaget

Slovenia – T-2

Sweden – Telia
UK – Virgin Media

Switzerland – Swisscom

UK – Virgin Media
Portugal – PT, ZON
Multimedia, Optimus Clix
Romania – Romtelecom,
RCS & RDS
Spain – Telefónica
(Movistar), Orange
© Analysys Mason Limited 2011
Triple-play pricing study 2Q 2011: pricing options for bundling mobile
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Introducing mobility to fixed bundles
The price premium for mobile broadband varies, but
EUR10–15 per month is most common
Figure 18: Distribution of the incremental price of bundled
mobile broadband on top of other fixed services in a bundle,
Europe and the USA, 2Q 2011 [Source: Analysys Mason,
2011]
1
EUR0
EUR0.01–2.5
EUR2.5–5
EUR5–7.5
EUR7.5–10
EUR10–15
EUR15–20
EUR20–25
>EUR25
The free or nearly free services are either prepaid services or include
smaller usage caps (sometimes as low as a few hundred megabytes).
Services charged at EUR25 or more may include usage caps of
10GB or more, but are sometimes as low as 3GB.

As part of the Triple-play pricing study, we
identified 131 fixed service bundles that included
mobile broadband. Of these, 82 bundles had
equivalents that did not include mobile broadband,
allowing us to isolate the value of mobile
broadband as part of the bundle.

The distribution of the value of mobile broadband
as part of a bundle is, for the most part, very even
– we identified approximately as many free or
nearly free mobile broadband services added to
fixed bundles as we did mobile broadband
services priced over EUR25 per month.1 However,
the most frequent premium charged for adding
mobile broadband into a bundle was between
EUR10 and EUR15 per month. This is
understandably lower than standalone mobile
broadband services as a result of:

consumer expectation of lower prices for
bundled services

the mobile broadband service being sold as
a complementary service.
© Analysys Mason Limited 2011
Triple-play pricing study 2Q 2011: pricing options for bundling mobile
33
Introducing mobility to fixed bundles
Consumers save an average of 35% on mobile broadband
when they buy it as part of a service bundle
Table 2: Strategies for pricing mobile broadband as part of a service bundle [Source: Analysys Mason, 2011]
Service providers taking this
approach
Tariff type
Description
Discounted
contract mobile
broadband
The most popular approach to bundling mobile broadband services with
fixed services is to discount the value of the standalone mobile broadband
service – typically by around 35% – although some operators, such as
TeliaSonera in Finland and RCS & RDS in Romania offer the service for
free with their high-end fixed broadband services. FASTWEB, NextGenTel,
Magyar Telekom (T-Home) and Virgin Media offer a bundle that is cheaper
when mobile broadband is included.
•
Bespoke lowusage contract
mobile
broadband
Some operators offer low-usage contract tariffs (from 100MB upwards) to
cater for users who want mobile broadband as a complement to fixed
broadband.
•
Bundling of
prepaid mobile
broadband
tariffs
Several operators offer prepaid mobile broadband tariffs alongside fixed
broadband. This can be used either to offer a ‘quick start’ service (the USB
modem arrives by post the next day, before the fixed broadband service is
connected) or may be an unwanted (and possibly unused) addition to the
fixed bundle. Telia in Sweden offers three months of free usage before the
mobile broadband SIM returns to a standard prepaid tariff.
•
Alternative operators (and MVNOs) FASTWEB and Com Hem offer
contract mobile broadband services to existing fixed bundle subscribers at
the same price as for non-fixed subscribers – mobile broadband is not a
core market for these operators.
•
Full price for
contract mobile
broadband
•
•
•
•
•
•
•
•
•
•
•
•
•
Belgacom (Belgium)
O2 Telefónica (Czech Republic)
TeliaSonera (Finland)
T-Home (Hungary)
Romtelecom (Romania)
RCS & RDS (Romania)
Telefónica (Spain)
A1 Telekom Austria
France Telecom - Orange
(France)
Vodafone (Ireland)
A1 Telekom Austria
Belgacom (Belgium)
Vodafone (Germany)
Bredbandsbolaget (Sweden)
Telia (Sweden)
FASTWEB (Italy)
Com Hem (Sweden)
© Analysys Mason Limited 2011
Triple-play pricing study 2Q 2011: pricing options for bundling mobile
34
Document map: How to use the pivot charts in the data annex
Document map
Executive summary
Introduction and scope
Service speed evolution
Country-by-country pricing comparison
Incumbent versus altnet
Promotional pricing
Price premiums for higher speeds, and voice and TV services
Introducing mobility to fixed bundles
How to use the pivot charts in the data annex
About the author and Analysys Mason
© Analysys Mason Limited 2011
Triple-play pricing study 2Q 2011: pricing options for bundling mobile
35
How to use the pivot charts in the data annex
How to use the pivot charts in the data annex

The Triple-play pricing study’s data annex includes a selection of pivot charts that enable you to quickly
benchmark services in a particular market. See below for a basic guide as to how to use these sheets.
Figure 19: How to use the pivot charts in the Triple-play pricing study data annex [Source: Analysys Mason, 2011]
The y axis displays the price
per month in euros of the
benchmarked services. For
‘baskets of usage’, the price
includes promotional pricing
and amortises one-off
charges. For benchmarking
simple access prices, these
additional charges are not
included.
The x axis displays the name
of the operator and service
that is benchmarked.
Changing these options allows you
to select the types of service (for
example, triple-play services by
setting ‘Fixed broadband’, ‘Fixed
voice’ and ‘TV’ to ‘Y’) and the
country in which you wish to
benchmark service prices.
Checking or un-checking data
series in these boxes allows you to
specify the access technologies or
service speeds you wish to display
– for example, you could limit your
search to just DSL-based services.
To temporarily hide the field buttons (for example, if you wish to copy the chart to a
PowerPoint presentation), in Excel 2010, go to PivotChart Tools > Analyze and uncheck the
‘Field Buttons’ button.
© Analysys Mason Limited 2011
Triple-play pricing study 2Q 2011: pricing options for bundling mobile
36
Document map: About the author and Analysys Mason
Document map
Executive summary
Introduction and scope
Service speed evolution
Country-by-country pricing comparison
Incumbent versus altnet
Promotional pricing
Price premiums for higher speeds, and voice and TV services
Introducing mobility to fixed bundles
How to use the pivot charts in the data annex
About the author and Analysys Mason
© Analysys Mason Limited 2011
Triple-play pricing study 2Q 2011: pricing options for bundling mobile
37
About the author and Analysys Mason
Author
Martin Scott (Principal Analyst) leads Analysys Mason’s Fixed Broadband research programme. His primary
areas of specialisation include fixed broadband retail pricing and bundling, and customer satisfaction and
consumer-facing marketing strategy. Martin also specialises in statistics, surveys and the analysis of primary
research, and he co-ordinates Analysys Mason’s Connected Consumer series. He has produced research for
Analysys Mason on different aspects of broadband (next-generation) access, consumer demand for present
and next-generation services, and the business case for value-added services, such as videotelephony and
three-screen advertising. Martin has a Master’s degree in Mathematics from Oxford University.
© Analysys Mason Limited 2011
Triple-play pricing study 2Q 2011: pricing options for bundling mobile
38
About the author and Analysys Mason
Copyright
Published by Analysys Mason Limited, Bush House, North West Wing, Aldwych, London WC2B 4PJ, UK
Tel: +44 (0)845 600 5244; Fax: +44 (0)20 7395 9001; Email: [email protected];
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ISBN 978 1 906881 90 0.
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Analysys Mason Limited recognises that many terms appearing in this report are proprietary; all such trademarks
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The opinions expressed are those of the stated author only.
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Triple-play pricing study 2Q 2011: pricing options for bundling mobile
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About the author and Analysys Mason
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About the author and Analysys Mason
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About the author and Analysys Mason
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