Belgacom doubles IPTV subscribers and raises ARPU year on year

Belgacom provides a complete quad-play solution comprising fixed and mobile telephony, the Internet and television to meet the demands of its business and residential customers.

 

Belgacom decided to enter the TV market as a means of increasing customer loyalty and reducing churn, as well as extending its business reach. It needed a future-proof solution that would meet evolving technological and market demands and which would help it become a quad-play provider.

With an ambition to be a trendsetter in digital TV, its challenge was to develop a TV distribution platform from scratch. It also needed to build a credible TV brand with premium content that would break the national broadcasting stranglehold of the cable companies, which enjoyed more than 90 percent market share.

Protect existing business while raising new revenue

Scott Alcott, Executive Vice-President Service Delivery Engine, Belgacom, says: “We launched our service in June 2005 and since then we’ve been winning hundreds of new customers every day, totalling more than 500,000 by December 2008, with a TV ARPU of €17.2.

”As a first step towards convergence, the Belgacom Group launched a number of ‘bundles’ in the first half of 2007, enabling residential customers to purchase a combination of several products or services to obtain attractive rate reductions. Customers can choose between “Internet + TV Pack”, “Internet + TV + Mobile Pack” or “Internet + Mobile Pack”. The launch of bundled services is very successful and has driven growth in Belgacom TV and mobile customers.

TV revenue

Extract from Belgacom’s annual report 2008: Belgacom TV revenue reached EUR 86 million in 2008 driven by a larger customer base and higher ARPU (from EUR 16.1 to EUR 17.2). During the fourth quarter, Belgacom added 63,000 new TV users due to the success of year-end promotions leading to a total increase of 201,000 new users for the year 2008. This brings the total customer base to 506,000 customers. The TV- ARPU growth of seven percent [in 2008] is driven by the success of on-demand services and lower impact of promotions on an increasing TV revenue base.

IPTV is changing television forever. Offering new ways to view, when and where we want, the technology also promises new opportunities for service providers to broaden their market and win new revenue streams.

Killer content enhances brand image

As well as the raw growth figures, Belgacom TV has enhanced its brand image by launching innovative services. Jean-Charles De Keyser, Vice President, Belgacom TV says: “Today, thanks to the technology, the three media, TV, Web and 3G mobile are fully integrated. For example, on Belgacom TV you can watch football matches on your screen. Then you can watch the summary of all the matches on the web. And if a goal is scored you can immediately watch it on your mobile phone.” Alcott emphasises the impact of this: “Today, with the exclusive rights to Belgium’s premier soccer league, Belgacom TV offers real killer content.”

IPTV is already a reality and it’s beginning to demonstrate just how convergence can bring new business opportunities for service providers by enabling them to offer their customers total flexibility and freedom in the way they watch TV. It also promises innovative services that go way beyond even this, with new levels of interactivity that will create new business models and break new ground in advertising.

A partnership built on consultation

Belgacom turned to Nokia Siemens Networks to help it achieve its goals. The two companies worked closely together with Belgacom benefiting from a consultative approach, which led to the joint development of a solution and its deployment. This strong partnership has been a major part of the success of the project.

“The most important thing in our relationship is that we work together on behalf of our customers. This means that we must first find out what our customers want so that we can translate their expectations into technology. I think that the dialog between our companies about the expectations of our customers will allow the further evolution of the technology of tomorrow,” says De Keyser.

With IPTV, an operator can gain a strong competitive advantage by strengthening its broadband offering and creating real differentiation by becoming the gatekeeper between content providers and advertisers and the end user. IPTV enables operators to become a valuable partner for other entertainment players.

Next generation entertainment

“On our way to becoming a quad-play provider, we introduced the Nokia Siemens Networks Home Entertainment Solution to our clients. This is where they expect next generation communications and entertainment offerings – on the TV screen,” Alcott explains.

Nokia Siemens Networks Home Entertainment is a multi-service access open platform that enables convergence of services to an all-IP network infrastructure with the necessary carrier-grade quality. A complete end-to-end solution with pre-integrated best-of-breed components, Home Entertainment allows consumers to enjoy a completely new experience in entertainment, while allowing the operator to tap into new revenue sources.

Says Alcott: “Nokia Siemens Networks, as a global integrator, provided us with a resilient and fully-integrated end-to-end solution, from the video on demand streamer to the set-top boxes at the customer premises, all based upon open standards.

”In summer 2008, Belgacom launched High Definition TV (HDTV) and High Definition Video on Demand (VoD) to more than 60 percent of Belgian households.

Alcott concludes: “The development of Nokia Siemens Networks Home Entertainment with new and innovative services, together with a strong partner, is the key to our future success.”

 

IPTV is a major enhancement to any communications brand, attracting consumers by offering new, more convenient ways to view TV. One company that has moved early and is seeing the rewards is Belgacom in Belgium. Within 3.5 years of launching its Belgacom TV service, the provider had won more than 500,000 subscribers and foresees strong growth well into the future.

Belgacom offers fixed telephony services to about 4.5 million households, and is also the main Internet provider, commanding more than 50 percent of the residential market. For the fiscal year ending December 31, 2008, it posted a total revenue of €5.98 billion and a net operating profit (EBITDA) of €1.99 billion.