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DT Cuts Its IPTV Price

Ray Le Maistre
8/30/2007

Deutsche Telekom AG (NYSE: DT) has cut the price of its IPTV package in an effort to boost uptake before the end of the year, and, like other European carriers, is using domestic soccer coverage as one of its main content attractions. (See DT Pushes IPTV, Mobile.)

DT launched its service about a year ago and has set itself a target of 200,000 customers by the end of this year and 1.5 million by 2010. (See DT Plans M&A, IPTV Push.)

While it hasn't revealed current IPTV subscriber numbers, it's believed to be in the tens of thousands. That means the incumbent carrier will need to add 100,000-plus new IPTV customers during the next four months to achieve its year end target.

To do that it has renamed its IPTV packages and begun a new marketing campaign, based around features such as time-shift TV and content such as soccer, and dropped its triple play (voice, broadband, and TV) entry level price by around 25 percent from the previous €81.26 ($110.81). (See DT Adds New Brand Chief.)

The operator says customers in its broadband upgrade areas can now get an entry level telco TV service, called Entertain Comfort (formerly T-Home Complete Basic), for €59.95 ($81.65). This includes 70 TV channels, access to additional pay-TV channels and on-demand content, high-speed DSL access, and unlimited fixed line voice calls within Germany.

The Entertain Comfort Plus (formerly T-Home Complete Plus), includes about 30 more TV channels, two soccer games each weekend, a listings magazine, and free access to the carrier's 8,600 public WLAN access points. It costs €74.95 ($102.34).

As in other European countries, such as U.K. and Italy, live soccer is being used to lure potential subscribers. (See Sky Falls on Virgin's Head and BT Talks Google, IPTV & Collaboration.)

The first 20,000 customers to sign up to the new package will get access to all the Bundesliga soccer games for free for the whole of the current season, which has just kicked off, while any customers adding the service before October 31 will get three months of soccer free. The standard price to add Bundesliga soccer games to the basic package is €9.99 ($13.61) per month.

There are two main reasons why DT needs to up its game in the triple play services market. First, it's not the only carrier with a triple play offer -- Telecom Italia (TIM) subsidiary HanseNet Telekommunikation GmbH launched its IPTV service before DT and aims to have 100,000 triple play customers by the end of this year. (See DT Rival Launches IPTV .)

Second, DT needs new services and attractive packages to retain fixed line customers, who are deserting the company in droves -- the carrier counted 37.7 million access line customers in Germany at the end of the second quarter this year, 2.4 million down from a year earlier. (See Scorecard: DT's Struggles Continue.)

DT says it will complete its access network upgrade by the end of the year, by which time 27 cities will have VDSL2 gear, providing downstream speeds of up to 50 Mbit/s and access to high definition (HD) content, and another 750 towns and cities will be kitted out with ADSL2+ capabilities (up to 16 Mbit/s).

Once that upgrade is complete, 17 million German households, half of the country's total, will be able to sign up to the IPTV service, which is delivered using technology from Microsoft Corp. (Nasdaq: MSFT). (See Microsoft Wins IPTV Deal at DT.)

Currently, about 15 million households can get the IPTV service.

The VDSL2 rollout, which involves fiber to the curb and the deployment of remote DSLAMs to provide the final leg of the high-speed connection over copper plant, will continue in 2008, with Germany's 50 largest cities set to benefit from the higher-speed connections. (See DT Flings Billions at Fiber Access.)

That's a slip of at least 12 months from the initial plan of having VDSL2 available in all 50 cities by the end of 2007, but DT has faced some regulatory issues over competitive access to its new high-speed infrastructure that aren't over just yet. (See EC Sues Germany and EC Threatens Germany With Court Case.)

DT had not responded to questions about its IPTV service targets and plans as this article was published.

Europe is set to be the IPTV powerhouse during the next few years in terms of subscriber uptake, with the Gallic brigade of Orange (NYSE: FTE), Iliad (Euronext: ILD), and Neuf Cegetel Group (Euronext: NEUF), along with Italy's Fastweb SpA (Milan: FWB), leading the way. (See Europe to Dominate IPTV Growth.)

— Ray Le Maistre, International News Editor, Light Reading

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OldPOTS
OldPOTS
12/5/2012 | 3:03:23 PM
re: DT Cuts Its IPTV Price
But is Internet TV ready for a football game (either type) ready for my 50 inch TV?
The compression has improved, but not that much.
OP
digits
digits
12/5/2012 | 3:03:23 PM
re: DT Cuts Its IPTV Price
Recent history has shown that viewers respond to a combination of three things -- content they want, delivered with quality, at the right price. Once Sky figured this out in the UK it went from near financial disaster to dominant pay TV player and increased its household penetration by millions.

There's lots of content available on the public Internet but if anyone is going to make any money from it it will need to be attractive content that people will watch.

Clearly viewing habits are changing but some things will always stay the same. What's going to be really interesting to see is whether any of the major telcos can make a business case from IPTV/telco TV services. It looks very tough.

Ray
niblick
niblick
12/5/2012 | 3:03:23 PM
re: DT Cuts Its IPTV Price
I think with increasing broadband speeds and better compressions, the distinction between Internet TV (TV through public Internet) and IPTV (operator controlled TV) is blurring. Internet TV is cheap, disruptive, and is already good enough. Current generation game consoles (Wii, PS3) connect to the Internet and can stream any Internet video content including Youtube. There is a service called moowee.tv which even aggregates Internet content on game consoles in an easy manner.
niblick
niblick
12/5/2012 | 3:03:21 PM
re: DT Cuts Its IPTV Price
All good arguments for IPTV. My concern (for the Telcos) is they are spending billions of dollars (eg. AT&T spent over $6B) to provide a service which may be at best equivalent to current Cable/DBS offerings. And Telcos will also get squeezed by disruptive and much cheaper Internet TV plays such as Joost and Youtube. You cannot argue against the success of Youtube (>100M streams a day!). It provides unlimited content at a right price ($0).

As Ray is suggesting, I am not sure if Telcos are going to make money after spending so much.
MikeParr
MikeParr
12/5/2012 | 3:03:19 PM
re: DT Cuts Its IPTV Price
Perhaps one way for the telcos to stay in business is to identify "stuff" out on the web that goes beyond what is offered by standard Tv channels. FKN Newz is a very good example of that - it would never be broadcast by the BBC but, with support by a telco could be very mainstream in Internet TV perhaps with high res (pay) and low res (free). There are probably plenty of other examples like FKN Newz.
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