Europe's Operators Need More Revenue from Multiplay Offers

Oct 21, 2009

The policy of discounting multiplays in Europe in order to drive adoption and subscriber additions will prove unsustainable as subscriber growth slows, according to a new report by Pyramid Research (, the telecom research arm of Light Reading Communications Network (

Discount Dilemma: Multiplay Pricing Puts Europe's Operators in a Revenue Bind is a new Telecom Insider Report that analyzes how operators can use value-added services, content exclusivity, and long-term contracts to slow the decline in ARPS, while drawing on the experiences of UPC in the Czech Republic, Free (Iliad) in France, Comstar in Russia, and Sky in the U.K. Download an excerpt of this report here:

Multiplay operators have benefited from tremendous subscriber growth levels in the past two years, thanks to a combination of low penetration and competitive pricing. The global economic crisis helped spur the growth in offers promoting multiplay at significant discounts to stand-alone products. With subscriber additions driving revenue, operators were comfortable with declining ARPS. However, the policy of discounting multiplays in order to drive adoption and subscriber additions will prove unsustainable as subscriber growth slows, putting operators in a revenue bind.

"As the multiplay market reaches saturation, the rate of subscription growth will decrease by more than half with a CAGR of only 4 percent for 2010 to 2014," according to the report. "In 2008 multiplay revenues across the Czech Republic, France, Germany, Italy, the Netherlands, Romania, Russia, Spain, and the U.K. totaled euro 31 billion (US$46 billion) and are expected to reach an estimated euro 37 billion (US$49 billion) in 2009, representing euro-denominated growth of 18 percent in 2009. As subscription growth begins to subside, multiplay service revenue will slow to a modest CAGR of 7 percent between 2010 and 2014," the report shows. Meanwhile, existing broadband and pay-TV households will be tempted by their current providers to migrate to multiplays, significantly increasing competition among operators for existing customers.

The report finds that operators must bolster their ARPS as a means of ensuring revenue growth. With competition restricting their ability to raise prices, operators across both Western and Eastern Europe must develop their value-added offerings, focusing primarily on HD and VoD services, as well as broadband top-up services. Likewise, as mobile operators enter the multiplay market, fixed operators should consider joint ventures with MNOs or even launch their own MVNOs in order to remain competitive.

Discount Dilemma: Multiplay Pricing Puts Europe's Operators in a Revenue Bind is part of Pyramid Research's Europe Telecom Insider report series. This report is priced at $595 and can be purchased online here: or by contacting Amalia Vega via email at

For more information about Pyramid Research's products and services, please visit or contact us at

About Pyramid Research

Pyramid Research ( offers practical solutions to the complex demands our clients face in the telecommunications, media and technology industries. Our analysis is uniquely positioned at the intersection of emerging markets, emerging technologies and emerging business models, powered by the bottom-up methodology of our market forecasts for over 100 countries-a distinction that has remained unmatched for more than 25 years. As the telecom research arm of the Light Reading Communications Network, Pyramid Research works with Heavy Reading, providing the communications industry's most comprehensive market data, trusted research and insightful technology analysis.

About Light Reading

Founded in 2000, Light Reading ( is the leading online media, research, and focused event company serving the $3 trillion worldwide communications market. is the ultimate source for technology and financial analysis of the communications industry, leading the media sector in terms of traffic, content, and reputation. Light Reading's research arms, Heavy Reading and Pyramid Research, provide the most comprehensive communications research, market data, and technology analysis in close to 100 markets around the world. Light Reading produces nearly 20 targeted communications events including TelcoTV, Ethernet Expo New York and Ethernet Expo London, The Tower Summit @ CTIA, and Optical Expo, as well as focused one-day events tailored for cable, mobile, and wireline executives. Light Reading was acquired by United Business Media in August 2005 and operates as a unit of TechWeb.

About TechWeb

TechWeb (, the global leader in business technology media, is an innovative business focused on serving the needs of technology decision-makers and marketers worldwide. TechWeb produces the most respected and consumed media brands in the business technology market. Today, more than 13.3 million* business technology professionals actively engage in our communities created around our global face-to-face events, Interop, Web 2.0, Black Hat, and VoiceCon; online resources such as the TechWeb Network, Light Reading, Intelligent Enterprise,,, and The Financial Technology Network; and the market leading, award-winning InformationWeek, TechNet Magazine, MSDN Magazine, and Wall Street & Technology magazines. TechWeb also provides end-to-end services including next-generation performance marketing, integrated media, research, and analyst services. TechWeb is a division of United Business Media, a global provider of news distribution and specialist information services with a market capitalization of more than $2.5 billion.

*13.3 million business decision-makers: based on number of monthly connections

About United Business Media Limited

UBM (UBM.L) focuses on two principal activities: worldwide information distribution, targeting and monitoring; and, the development and monetization of B2B communities and markets. UBM's businesses inform markets and serve professional commercial communities - from doctors to game developers, from journalists to jewelry traders, from farmers to pharmacists - with integrated events, online, print and business information products. Our 6,500 staff in more than 30 countries are organized into specialist teams that serve these communities, bringing buyers and sellers together, helping them to do business and their markets to work effectively and efficiently. For more information, go to

  Press contact:
  Jennifer Baker
  +1 617 871-1910

First Call Analyst:
FCMN Contact:

SOURCE: Pyramid Research

CONTACT: Jennifer Baker, Pyramid Research, +1-617-871-1910,

Web Site: