Triple Play

Triple play services have been very successful in countries where broadband Internet is available at reasonable prices. Operators like FASTWEB in Italy and PCCW in Hong Kong started the trend by offering service packages combining broadband Internet access, residential telephony and IPTV as early as 2003. Since then, additional operators have followed suit, notably in deregulated countries across Western Europe, leading to 122 million triple play subscribers worldwide by the end of 2007 (Source: Visiongain, 2007).

Given this impressive market adoption, the next natural step for operators would be to extend triple play into multi-play service bundles by adding mobile services. This strategy is particularly tempting for integrated operators who control both fixed and mobile networks. However, this strategy also is complicated: While triple play services combine shared (family) access and devices, mobile services are targeted at a very personal device: the mobile phone. How can service providers combine family services with personal services in a profitable way?

Figure 1: The positioning of different devices

The Role of Each Device

To tackle the multi-play challenge, let’s take a look at each device, e.g. home phone, PC, TV, and mobile phone. Clearly, we use each device differently, according to the type of service, and our personal lifestyle. 

The Home Phone
The oldest device is the family home phone. It has been designed for voice communication only, and the line is typically shared among members of the same household. Although this shared service is being increasingly replaced by each family member’s own cell phone, the home phone is often linked to a single number for each home. It is also still used by young children before they get their first mobile phone and by older generations, like grandparents, who may not use mobile phones at all. The home phone is also a very cost-effective way of keeping in touch, especially over long distances. As an example, most triple play services in France include a flat-fee for all national and international calls to over 40 countries, for only 5 Euros per month.

The PC
The PC started out as a shared desktop device and is increasingly being replaced by personal laptops for each member of a household. The PC is used for information gathering, entertainment, content creation and communication. Over the past ten years, un-metered broadband Internet access has triggered an explosive increase in popularity for the PC, making it the most versatile device of all. Among younger generations, the PC has replaced the TV: Broadband users now spend an average of 48% of their free time online on a typical weekday (Source: Media-Screen, 2007). The PC has the advantage of being both a lean-forward (active) and a lean-back (passive) device.

The Television
The TV is still the preferred lean-back device, and remains difficult to personalize. In developed countries, the TV is more in tune with the habits of older viewers than younger ones, who often use their PCs to view movies while they continue to actively surf the Web or communicate with their communities.
With the advent of IPTV, lean-back PC and Web content can be viewed on the TV set. Uploading user-generated content is facilitated by publishing tools, such as Vpod, Kyte or YouTube, which can be used to share content across all devices that have a screen (PC, mobile phone, TV). 

The Mobile Phone
For younger generations, the cell phone is the primary personal communication and entertainment device. It is quickly evolving beyond telephony to become a mobile Internet device, replicating the laptop PC experience in a smaller form factor, with Internet browsing, IM, presence and social networking.
Mobile operators have had to rethink their initial walled-garden strategy; they have largely given up trying to produce content themselves and are instead partnering with top Internet players (e.g., YouTube, Google, Amazon, eBay, FaceBook, etc.), and adding mobile Internet to phone subscriptions. As an example, Orange in France recently launched iPhone subscriptions with flat-fee, unlimited mobile Internet access for less than 50 Euros per month.

The Multi-Play Challenge
If multi-play bundles include both shared and personal devices and services, how can operators create service bundles to accomplish their objective of lowering total household churn and increasing ARPU?
First, it must be understood that a triple play service (fixed telephony, broadband access and TV) is a household purchase, while a mobile subscription is an individual purchase. Although it is tempting to offer discounts to encourage the addition of mobile subscriptions to triple play services, this approach typically destroys value for the operator by lowering the overall ARPU. In addition, discounted pricing for multi-play bundles offers little room for differentiation, and in the case of a single bill for all services, households clearly will see the total price for all services, which can be dissuasive.

Since the main challenge is to include the mobile phone in a service bundle, an alternative strategy would be to create synergy between the mobile phone and shared devices: the TV and the home phone.
Let’s take a look at some examples of joint services between the mobile phone and shared family devices.

Service Scenarios that Link Mobile Phones to Shared Devices

Example 1: Calling Line ID Presentation and Transfer on TV Screen
Scenario

1. Incoming call alert pops up on the IPTV screen
2. Viewer sees the name of the caller
3. Viewer can send the incoming call to voicemail, pause TV and answer on home phone or predefined mobile phone, or forward the call to the home phone or a predefined mobile phone   

Benefits for the user

1. Leverages TV screen to identify callers and manage calls 

Benefits for the operator

1. Links IPTV to home phone and to mobile phones (for answering or forwarding purposes)

Example 2: Click-to-Dial from Family Message Board 
Scenario

1. Teenager leaves SMS message on family message board
2. Parent clicks to call teenager’s mobile phone number from IPTV, using home phone to place the call

Benefits for the user

1. Uses IPTV as the communication hub within a family 

Benefits for the operator

1. Increases SMS usage from children to parents
2. Facilitates call from parent to child with click-to-dial on IPTV

Example 3: Buy Ringtone on TV and send to Mobile Phone 
Scenario

1. Teenager is watching music videos on family TV
2. Message appears on TV screen: “Press OK to buy this song”
3. Teenager confirms purchase of ringtone on TV screen
4. Teenager sends ringtone from TV to girlfriend

Benefits for the user

1. Simple ordering of music content from IPTV
2. Easy sharing of music or ringtones with friends
3. Convenient payment on telecom bill

Benefits for the operator

1. Encourages impulse buying of ringtones while watching TV 
2. Additional revenues from ringtones

Conclusion
Service providers are looking for ways to extend triple play into multi-play bundles by adding mobile services. However, this poses the question of how to combine mobile phone services with family services in a profitable way. To succeed, operators need a good understanding of the services enabled by latest IP communication technology that will link the services across all devices: Home phones, mobile phones, PCs and televisions. By combining IP communication capabilities with the natural usage patterns of different devices, it is possible to go beyond price discounts and create multi-play bundles that encourage service use that, in turn, increases ARPU and reduces churn.
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