Vodafone Italia’s Station Arrives

On May 26th Vodafone Italia unveiled Vodafone Station, an ADSL base station with a detachable UMTS/HSPA wireless broadband dongle. The device (and associated service) combines both fixed and mobile broadband and voice services. Vodafone Station provides ADSL access, WiFi, Ethernet and USB connectivity, and a detachable USB dongle that can be used to provide fixed wireless access as well as mobile connectivity for notebook computers. Importantly, Station will allow Internet access and voice services out of the box, without having to wait for DSL line activation.

Analytical Summary

► Current Perspective: Positive on Vodafone Italy’s introduction of the Vodafone Station device, as it builds on the company’s acquisition of fixed-line ISP Tele2 last year and utilizes lessons learned from Vodafone Germany’s Zuhause service. Another strong influence is Vodafone Portugal’s experience with ‘instant activation’ broadband services that used a 3G dongle while consumers waited for DSL line activation. Vodafone Italia has clearly done its homework with hardware partner Huawei here, producing a slick, easily understood device.

► Vendor Importance: High to Vodafone Italia, as the company is moving to address a lack of fixed-line products. It is interesting that the specifications for Vodafone Station include support for both HDTV and IPTV, as well as set-top box interworking requirements. Although Vodafone Italy has said nothing to suggest it, a move to a TV offering is likely, especially given that its two competitors in this space, Fastweb and Telecom Italia, both field TV products.

► Market Impact: High on the Italian Internet access market, as this multi-play offering is likely to force other service providers to step up their games. The expected introduction of WiMAX, as well as existing FTTH deployments by Fastweb and potential ownership changes at Telecom Italia, are also likely to conspire to change the market severely.

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Advisory Report Highlight
The State of the UK IPTV Market

Ben Tudor

By Ben Tudor, Consumer Broadband Services - Europe

Broadcasters, content providers, telcos, cable operators and ISPs are all changing their strategies. All of these entities are involved, to a greater or lesser extent, in IPTV, the delivery of TV services over Internet Protocol (IP) connections. These organizations interact in a variety of ways, and are also influenced by regulatory and technological climates in the various countries that make up Europe. The varying environments mean that IPTV rollouts are different in different parts of Europe.

New players in the TV market are cannibalizing traditional TV provider’s businesses – something TV providers are not taking lying down. Some are even edging into service provider’s territory by offering triple play services.

This report looks at the UK market for IPTV, one of the least mature in Europe. Most consumers are unaware of IPTV’s value propositions, helped in part by marketing of cable, satellite and video on demand (VoD) services. IPTV faces an uphill struggle in the UK, and a crowded marketplace, where it must differentiate itself from a variety of paid and free offerings.

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BT Takes Second Crack At FMC: Goodbye Fusion, Hello Total Broadband Anywhere

On May 7th BT launched a mobile element to its Total Broadband DSL service in the form of cheap mobile phones with e-mail and Web access. BT Total Broadband Anywhere offers a choice of two HTC Windows smartphones with bundled minutes, VoIP access over BT Openzone and FON base stations at home and abroad, as well as a range of value-added services such as Digital Vault and Snap and Save, starting from GBP 5 per month. Mobile devices are managed, and applications are tightly integrated with BT Broadband equivalents.

Analytical Summary

► Current Perspective: Neutral on BT’s launch of BT Total Broadband Anywhere, because despite BT’s admirable efforts to make FMC more meaningful than ‘cheap mobile calls at home,’ we believe the operator will struggle to match the marketing and service modelling prowess of mobile operators with simpler and, in some cases, better-priced bundles. On the other hand, a multi-million pound marketing campaign, and some pretty neat mobile value-ads, will do much to help revive BT’s post-Fusion mobile reputation.

► Vendor Importance: High to BT, as the operator is now under pressure to justify its 21st Century Network project with a successful converged service, in the wake of BT Fusion. That said, the raison d’etre of BT Total Broadband Anywhere is broadband loyalty enhancement; a take-up rate, which may be regarded as a middling performance by a mobile phone operator, may be viewed as a success for BT.

► Mobile Consumer Market Impact: Moderate as this new ‘reformed Fusion’ service may be seen as the first sign of an anticipated wave of new competitive challenges in the UK. Operators planning to either extend an existing, under-performing FMC service (such as Orange UK’s Unique), introduce a new one (such as the planned O2 femtocell move) or bundle mobile and broadband services more aggressively (Vodafone and Virgin Mobile) clearly need to ‘think mobile data,’ too.

► Broadband and Bundling Market Impact: Low as few broadband operators are in a position to copy BT’s move. While BT may be the biggest broadband operator in the UK, plenty of consumers are happy to go elsewhere, including to mobile operators that bundle broadband with their core mobile products. Just as most ‘free’ broadband products cannot compete with premium offerings from ISPs, BT will have a tough time selling directly against mobile companies.

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