Telekom Austria Takes Aim at Wavering Broadband Customers with aonBroadband Duo

| Apr 21, 2009 | Consumer Broadband Services - Europe | Competitive Intelligence Report

| Analyst: Ben Tudor

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

Event Summary

April 17, 2009 -- Telekom Austria has introduced a promotion on its aonBroadband Duo package, a data-only bundle that includes fixed and mobile broadband connections. The operator is waiving in home installation fees for new customers, and is including a number of incentives, including online storage and e-billing. Customers can also forgo paying for fixed line telephony services.

Analytical Summary

• Current Perspective: Positive on Telekom Austria’s limited-time offer of fixed and mobile broadband, as it signals a step in the right direction for the incumbent. The rise of mobile broadband has been a cause for concern at Telekom Austria, but this package, which ties the fixed and mobile services together, drops installation fees and includes extra incentives, is an interesting step. It is likely that those who use mobile broadband very occasionally, or consumers thinking of coming back to the Telekom Austria fold, will find this service attractive. Customers do not need to buy fixed voice services from Telekom Austria, but can instead opt simply for data access within and outside the home. This suits changing attitudes to voice services across Europe.

• Vendor Importance: Moderate to Telekom Austria, as the company has many other avenues open to it when it comes to developing a response to competitors. The company’s IPTV service, aonTV, for example, could also offer an incentive to new customers. Telekom Austria is playing to its strengths with this service by providing fixed broadband and an ‘occasional use’ mobile broadband service, and this is far, far better than trying to take on alternative carriers or mobile operators at their own game by aping their services exactly.

• Market Impact: Moderate on the Austrian broadband market – for now – as this signals an interesting departure for Telekom Austria. The company is innovating with tariffing, bundling and administrative costs here, and competitors should be concerned.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

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Recommended Competitor Actions

• A1 should try to add more services to its combined fixed and mobile broadband offering – at present it provides for VoIP calling and also includes a months’ security service. The company should try to add more incentives to its package, but keep them clear and simple.

• Fixed and mobile broadband suppliers should return Telekom Austria’s compliment and try to lure the incumbent’s fixed broadband customers to their services, possibly with short term incentive offers similar to this one.

Recommended End User / Customer Actions

• Consumers should consider the hidden costs of taking up this service, and act accordingly. While the tariff is low, installation and activation is a high up front expense for an 18 month contract.

• Customers likely to use mobile broadband at least once a month should look at competing offers from the likes of A1, which actually work out at roughly similar monthly costs with inclusive mobile data.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

| Client access - Full report in Consumer Broadband Services - Europe | More information

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