Battle for triple-play bundles intensifies

Telecom Monitor in 2013 ACM Annual Report

Competition in the telecom market focuses more and more on triple-play bundles. This was revealed by the annual Telecom Monitor, which the Netherlands Authority for Consumers and Markets (ACM) published together with its Annual Report. The Telecom Monitor shows that KPN is becoming stronger in the television market, while cable providers are growing in the internet and telecom market. These market participants increasingly try to offer their customers subscriptions in the form of triple-play bundles. By now, 49 percent of households in the Netherlands have triple-play bundles, which combine internet, television, and fixed telephony, and sometimes also mobile telephony. KPN is growing considerably with these triple-play bundles. Cable providers already have a strong position in this segment. The data from the Telecom Monitor relate to the period of the second quarter of 2012 through the second quarter of 2013.

Mobile and internet services

Data traffic exploded (+53 percent) and the number of text messages dropped (-34 percent) in this period. The number of smartphones and tablets with access to mobile internet rose from 9.8 million to 11 million. Twenty-two percent of customers of telecom providers have a sim-only plan, and 32 percent have a prepaid connection. Almost half (46 percent) of all customers have a subscription with a ‘free’ device. Since so many customers have a subscription with a ‘free’ device, mobile-telephony costs are relatively high in the Netherlands, because the costs of these devices are included in the subscription.

Smaller independent telecom providers are slightly gaining more ground at the expense of the three major Dutch telecom providers KPN, Vodafone and T-Mobile. Dutch cable providers UPC and Ziggo have limited market shares in the mobile-telephony market, but offer large coverage areas for mobile internet with their Wi-Fi networks. In addition, ACM expects competition in the mobile market to increase with Dutch telecom provider Tele2’s own network, resulting in an even better selection for consumers.

Calling and surfing over landlines

Most households in the Netherlands still have an internet connection over the copper network (3.2 million subscriptions). The number of cable connections is growing steadily (+4 percent) and fiber-optic doubled (+51 percent) to 457,000 households. The Netherlands continues to be among the world’s leading nations when it comes to the number of internet connections. Almost nowhere else in the world does such a large share of the population have access to high-speed internet (the Netherlands comes second after Switzerland in the OECD ranking). The digitization of the telecom market is a continuing trend. The switch to digital telecom services seems to be accelerating in the business market as well.

Increasing competition for television

Digital television has now definitely pushed out analog connections. At this point, 84 percent of Dutch households have digital television, which is a growth of 6 percentage points. For television, ACM expects competition for customers to increase through the fiber-optic and copper networks (DSL). ACM expects more television services to be offered over the internet, which results in more choices for consumers.

Business market

KPN’s position in the business market remains strong. Cable providers often have no networks in business parks, which results in fewer choices for businesses.