In this first extract Jason Blackwell, director, service provider strategies at Strategy Analytics, also praises BT’s aggressiveness in the sector but see potential creaks in its TV plans.
“BT has had good success in both TV and broadband. The company has been aggressive in securing exclusive rights to content, which is a key differentiator in the TV market,” he says. “This challenge will continue going forward though and BT, along with its competitors, will have to keep moving as the industry and competitive landscape is changing all the time. The costs have increased significantly and there is a growing concern that customers may not be willing to pay for this content. In the US, ESPN has lost around 3 million subscribers, as pay TV customers have switched to packages that don’t include the channels. These same issues will definitely challenge BT, along with Sky and other operators.”
Indeed Blackwell sees competition in the UK market heating up in other areas of the telco sector. “The major players are all making moves to remain competitive and better position for higher speed broadband offers and multiplay bundles to reduce churn and attract more customers. The number of triple and quad play services will grow very quickly as BT acquires the mobile and fixed services from EE, and Vodafone launches fixed/mobile bundled services. Virgin was once the lone quad-play service provider, and the increased competition is driving the company’s new round of investment in the market,” he says. “Sky also remains an important piece of the puzzle. Sky has announced a partnership with Telefonica UK (O2), extending the broadband and satellite TV provider’s triple play offer into a full quad-play.
However, Sky is seen as a potential takeover target for Vodafone. Sky will not ramp up its quad-play offer until 2016, potentially leaving the company behind the competitors who are all targeting 2015 for these multiplay services.”
In the next instlament of the BT series, we look at how strong and aggressive management led by BT CEO Gavin Patterson has helped the group grow...