CeBIT 2008

T-Home Cuts Prices to Turn Germany into an IPTV Nation

| Mar 5, 2008 | Consumer Broadband Services - Europe | Show Update

| Analyst: Ben Tudor

Current Perspective: Positive Vendor Importance: Moderate Market Impact: Moderate

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Event Summary

March 3, 2008 -- In an attempt to establish itself as a leader in the German IPTV market, T-Home is cutting the prices on its IPTV offers. In addition, T-Home plans to extend VDSL to another 13 Germany cities this year, and it wishes to put ADSL 2+ into a total of 1,000 cities, giving a reach of 20 million households.

Analytical Summary

• Current Perspective: Positive on T-Home’s price cut on its IPTV bundles, as it may help stimulate a rather moribund market for IPTV in Germany. While France and Italy have romped away with services offered by companies such as Neuf Cegetel, free and FastWeb, Germany lags behind even the UK in the adoption of IPTV.

• Vendor Importance: Moderate to T-Home, as the firm already has a dominant position in the German IPTV market. As the incumbent, and with far more network penetration than its competitors, T-Home is in a comfortable position anyway. However, it does face increasing competition, in terms of network reach and price, from both Arcor and HanseNet’s Alice service.

• Market Impact: Moderate on the German IPTV market, because Arcor is pricing its barebones IPTV service at nearly the same as T-Home’s, with broadband access thrown in. While a price cut may stimulate the market for IPTV, it is far from a given that subscriber numbers will be boosted by a price cut alone. That said, the extra EUR 10 a month on top of T-Home’s broadband tariff is an enticing proposition.

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