Video services

Vodafone Germany Plots 'Convergent' TV by April 2017

AMSTERDAM -- IBC 2016 -- Vodafone Germany is preparing to launch a new multiscreen, multi-platform TV service that will take advantage of cloud and all-IP technologies.

The German operator plans to introduce the TV offer by April 2017 in response to growing demand for "convergent" services that customers can watch at home or using mobile devices on the move.

Vodafone Germany is Germany's second-biggest operator of both fixed and mobile networks, behind market leader Deutsche Telekom AG (NYSE: DT), having spent about €7.7 billion ($8.7 billion, at today's exchange rates) on a takeover of cable giant Kabel Deutschland GmbH (KDG) in 2013.

The two companies have been locked in a fierce battle for "quad-play" customers who buy a full bundle of fixed voice, broadband, mobile and TV services from a single supplier.

Vodafone evidently hopes its forthcoming TV offer will give it an edge over Deutsche Telekom as the lines between fixed and mobile network technologies start to blur. "The new TV service as part of the quad play bundle will increase awareness," said Manuel Cubero, Vodafone's chief commercial officer, during a keynote presentation at this week's International Broadcast Conference (IBC) in Amsterdam.

The operator does not appear to have plans for exclusive or own-produced content, instead seeing itself in an "aggregator" role. "We've had complex negotiations with [various] content providers," said Cubero, letting slip that movie-streaming giant Netflix Inc. (Nasdaq: NFLX) is one of the companies with which Vodafone has been in discussions.

Vodafone has also been working with IP networking giant Cisco Systems Inc. (Nasdaq: CSCO) on the technology platforms that will underpin the new service.

Through investments in all-IP, cloud and more "agile" software technologies, the telco ultimately aims to provide a more "seamless" experience to users, allowing TV customers to enjoy content without having to worry about the acceess network or device being used.

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Having fallen behind Deutsche Telekom before its KDG takeover, Vodafone appears to have had something of a renaissance since becoming an owner of both fixed and mobile networks.

The operator's revenue performance began improving immediately after the KDG acquisition, and Vodafone was able to report year-on-year revenue growth in its most recent two quarters, ending a sequence of declines that lasted for an unlucky 13 quarters.

Cubero attributed the turnaround to substantial "synergies" between Vodafone and KDG, estimated to be worth as much as €3.5 billion ($3.9 billion) (in terms of net present value) on the cost side and €1.5 billion ($1.7 billion) when it comes to sales.

Among other things, the operator has been consolidating the two separate national fiber backbones maintained by the Vodafone and KDG businesses. It has also begun using KDG's hybrid fiber-coaxial network for mobile backhaul purposes, as well as migrating broadband customers off its DSL service and on to KDG's cable network.

Before buying KDG, Vodafone had been forced to rely more heavily on a wholesale relationship with Deutsche Telekom to provide broadband services.

It now claims that KDG's cable-based 400Mbit/s offer is one of the fastest in Germany.

Deutsche Telekom is trying to boost broadband speeds on copper-based networks through investment in a technology called vectoring, which cuts out interference between lines, but this tops out at 100 Mbit/s.

The incumbent has continued to lose out to cable rivals in the German market and saw its share of broadband retail connections drop to 40.4% in the April-to-June quarter, from 41.3% a year earlier. (See Can DT, Regulators Find Common FTTH Ground?)

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

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