YEAR OF THE BATTLE FOR THE ‘MULTI-PLAY CUSTOMER’ 2006 – APRIL 2006

Competition among Dutch telecom operators will get a new focus in 2006.

About two-thirds of Dutch households currently have Internet access and this figure is no longer growing to any great extent. On top of that, over 80% of the Dutch Internet population already has an always-on ‘broadband’ connection (DSL or cable), so there is not much room for growth in that area either.

The new focus, therefore, is on the increasing increased churning behaviour of the broadband user. In 2006, it is expected that some 13% might switch to another Internet provider. The latest quarterly Consumer Monitor Survey of the Dutch research bureau, Heliview, found that the availability of multi-play services (Internet, telephone, television, radio) seems to play an important role in this behaviour.

Over recent years telecom operators have mainly been focused on migrating narrowband users to cable or DSL connections and reaching households that had no Internet yet. The number of narrowband users is now less than 20%, so the greater part of that migration process is now over. Only if broadband prices were to drop drastically would another 38% of the narrowband users consider switching to broadband. The growth of new Internet users is also limited, even though 8% of PC owners don’t have an Internet connection (and this even goes for 19% of PC users over 55). Only 25% of this group is considering getting connected in 2006.

The competitive focus, therefore, is shifting to encouraging switching behaviour among broadband users and offering multi-play subscriptions. Where, in 2005, it seemed that DSL had a stronger market position than cable in the Netherlands, DSL users currently churn as easily as cable users. Today about 15% of the DSL users are contemplating another subscription type, and in a worst-case scenario about 13% of the cable and DSL users will switch over in the next 12 months.

In one out of ten cases, the switchover is caused by consumers choosing a multi-play subscription – among DSL users this was the main reason for even 17% of the switches.

This is one of the topics that will be discussed ate the Dutch-Australian Broadband Roundtable Wednesday on 5 April 2006. For more information see: http://www.budde.com.au/conferences/public-workshop-details/dutch-broadband-roundtable-5April2006.html

Join the Dutch Prime Minister and the Australian Minister for Communication (invited) in a high level meeting of broadband business opportunities.

If you are interested to participate in the Roundtable please let me know and I will put you on the invitation list. Depending on availability, official invitations will be sent out by the Dutch Ambassador closer to the date.

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