Strategies

Integration has become a key competitive factor on the broadband Internet market. The convergence of different types of media is having a decisive impact on provider strategies. Scarcely a provider on the German market is now able to operate successfully without offering its customers combined services.

Broadband Internet experts agree with this picture, predicting a high growth potential in the coming years for quadruple play and triple play in particular (Fig. 7). Consequently, broadband Internet providers are likely to switch to “all-inclusive” multimedia offerings. The experts also agree that mobile broadband Internet will become extremely important over the next few years, and that this trend will have a major impact on business models.

Fig. 7:		Strategic business models of broadband Internet providers in 2010 and 2015 (Broadband economy experts)

A similar picture emerges from trend forecasts of user demand for combined broadband Internet services (Fig. 8). The experts anticipate significant increases for all combined broadband Internet offerings through 2010, with approximately equal growth for “individual multi-play” (packages of services put together by the customer, sometimes from different providers) and “quadruple play” (combined services from the same provider).

And they also see the share of high-grade broadband Internet offerings continuing to grow through 2015. So the trend is clear: combined broadband Internet products will be a critical success factor in the marketplace.

Fig. 8:		User demand trend for combined broadband offerings: double play, triple play,quadruple play, individual multi-play (Broadband economy experts)6

“Double play” refers to a combination of Internet and telephony. “Triple play” is defined as a combination of Internet access, telephony (conventional telephony and/or voice over IP) and entertainment (IPTV). “Quadruple play” denotes a combination of Internet access, telephony (conventional telephony and/or voice over IP), entertainment (IPTV) and mobile telephony. And “individual multi-play” represents an individual configuration which combines Internet access, telephony (conventional telephony and/or voice over IP), entertainment (IPTV) and mobile telephony, all or partly sourced from different providers.

It will be increasingly important for broadband Internet providers to meet their customers’ requirements for both fixed and mobile services. There is virtually unanimous agreement that the provider’s broadband Internet infrastructure is going to be a key success factor over the next few years. The experts agree (Fig. 9).

Around 80 percent of the experts identify a combined fixed and mobile infrastructure as especially important even for 2010, and as even more so through 2015. The experts also express a clear view on the prospects of providers without any network infrastructure, giving such players low chances of success through both 2010 and 2015.

Fig. 9:		Success prospects for broadband Internet providers with divergent infrastructure starting points (Broadband economy experts)

Having a broadband Internet infrastructure is identified as an important competitive factor, and is likely to become even more so in future years. But clearly there are also other factors impacting on the battle for customers, which will be examined in more detail in the following section.