Triple Play and Voice over IP

For such Triple Play strategies to succeed, customer acceptance of product packages and an appropriate willingness to pay for such packages will be necessary. The fact that providers face major challenges in this area is evident in the predicted usage rates for Voice over IP and video telephony. The number of households using the Internet to make phone calls in 2004 was less than one percent. For the year 2010 a figure of around 14% is anticipated and, for the year 2015, a rate of around 35% is expected (Figure 7).

Figure 7:		Shift in usage of VoIP/video telephony by 2015 (broadband experts)

Full-scale market penetration of Voice over IP is currently being held back by a number of factors (Fig. 8). According to more than 70% of respondents, the biggest barrier constitutes the continued absence of a critical mass of users. For network products like telephony, such a critical mass is important for customer acceptance. Other barriers include the lack of market transparency from a customer point of view (around 51% of respondents) and the complexity of using the technology (around 49%). Sound quality was considered far less critical by broadband experts (around 29%), along with the customer security concerns (around 26%).

Figure 8:		Obstacles to blanket penetration of Voice over IP (broadband experts)

To achieve greater penetration of broadband communications services, providers have various levers at their disposal. Experts consider the cost to the consumer to be a particularly strong factor. Around 97% of respondents consider price as having a high to very high effect on the spread of Voice over IP. Some 94% consider the penetration of broadband Internet access to be a key factor in the future growth of this service. This would explain why some 82% of experts see a combined offering of broadband access and Internet telephony as a further important driver in the popularity of broadband communications services.

Convenience and ease of use was considered by 80% of broadband experts moreover to be an essential driver of Internet telephony to a high to very high degree. Much less important in their view was the impact of additional functionality (Figure 9).

Figure 9:		Drivers of enhanced popularity of broadband communications services (broadband experts)

By and large, the experts are in agreement about the future importance of Triple Play strategies. In all probability, these will have established themselves in the broadband market by the year 2015.The reasons for this are clear: Triple Play promises to deliver a competitive edge to the provider as well as cost benefits and convenience to the consumer. Internet telephony is seen as particularly appealing to consumers, and will serve as the central factor in achieving acceptance of Triple Play offerings. But there are a number of other barriers to full-scale market penetration. First and foremost, there is not yet a critical mass of users. In addition, customers still perceive the market to be relatively nontransparent. Overcoming these hurdles will be of critical importance to the future growth of the German broadband market.