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Accelerated potential for Fixed Wireless Access services even post-COVID-19 as 5G adoption seen to further gain steam

Strategic Highlights
Published: 2020-07-01


Telenor Norway became the latest EU operator to launch a 5G service in 1Q20, thereby adding Norway to the list of 5G countries in the region. Based on InfoCom's monitoring, 5G plans (inclusive of SMS and voice) are typically being offered with a 5G-ready smartphone or as a Fixed-Wireless Access (FWA) solution, while pricing normally varies on the maximum speed guaranteed since data volumes are already significant or unlimited. Other schemes include offering heavy subscription discounts as a subscriber acquisition strategy, with Vodafone Spain offering a 50% discount on the first 12 months to its 5G Unlimited tariff with a 24-month contract. The same approach was also implemented by its British segment, offering a 50% discount but only on the first six months of subscription. Aside from subscription discounts, we also observed some operators bundling OTT video and gaming applications to their 5G mobile plans such as TIM in Italy and EE in the UK (e.g. TIMGames, Amazon Prime Video, BritBox, Roam Further, BT Sport Ultimate).

We have seen some positive impact in light of these schemes. For instance, Vodafone UK recorded faster expansion in contract subscriptions (+348 000 annual net adds) and higher mobile service revenues (+1.6% YoY) driven by its data services. In terms of mode of access, we have seen operators increasingly marketing plans based on fixed wireless access (FWA) aside from 5G-compatible smartphones. For instance, Magenta in Austria added a 5G FWA service to its Internet portfolio called "Gigakraft 5G". The said offer helped the operator sustain revenue growth amidst the COVID-19 outbreak, particularly in the data segment (~3% YoY growth in mobile service revenues in 1Q20). Vodafone Italia also recorded sustained growth in convergent subscriptions (10% YoY), partly supported by its 5G mobile plan and fibre broadband service bundles. On the other hand, we haven't seen the same magnitude of impact on mobile broadband accessed through USB dongles, pocket modems, and sticks. As per InfoCom's monitoring, subscriptions to these modes are growing, but only marginally, due to the increasing customer preference to other types (via smartphones and partly FWA).

InfoCom expects that the COVID-19 outbreak will serve as an impetus for operators to calibrate their broadband strategies, especially on 5G adoption. As countries in Europe started to increasingly relax quarantine measures, we are expecting some acceleration in 5G deployments in the next periods - as demand for faster bandwidth and higher data volumes is expected to remain unabated. In terms of broadband access, operators could explore pivoting increasingly to offering FWA-type of service especially for the residential segment, as this could be deployed faster with less operational requirements than a fixed broadband service. Besides, an FWA-type solution could enable faster 5G network exposure among budget-conscious consumers as compatible smartphone devices remain relatively expensive so far.

- Click here to find out more about operators’ 5G deployment status and plans

Published: 2020-07-01

SVoD providers seen to go "more local"​ as pay-TV operators bank on OTT services to support growth

Strategic Highlights
Published: 2020-07-01


In 1Q20, quarantine measures have also been implemented in the Eastern European region in light of the COVID-19 outbreak although fewer cases have been recorded than its neighbouring regions. We observed that operators responded quite similarly as their Western European counterparts by offering expanded TV contents, free TV channels, and discounted VoD services during the period.

In terms of impact, we did not observe a significant change or uptake in pay-TV subscriptions among the operators we monitored in 1Q20. Rather, we observed a stable rate of growth for most operators, similar to the trend we have seen in the previous quarters - as seen in the chart. As per InfoCom’s Quarterly Television Monitoring service, some operators exhibited sustained growth mainly due to expanded TV contents. The growing popularity of over-the-top (OTT) services (e.g. O2 TV, Orange TV Go, etc.) likewise supported this development, with some operators such as Telefonica O2 in Czech Republic sustaining its double-digit growth of around 30% in pay-TV subscriptions. This is partly due to the increasing take-up of its O2 TV offers which include a monthly prepaid O2 TV Sport Pack, O2 TV HBO, and Sport Pack tariffs.

InfoCom expects continued growth in pay-TV subscriptions in the next periods, especially IPTV, network-owned OTT, and external OTT subscription video-on-demand (SVoD) services. To sustain or maximise revenue potential, operators can consider diversifying further their portfolios through additional SVoD integration (e.g. Netflix, Amazon Prime, HBO Go, and potentially Disney+) wherein users can have more flexibility to choose the OTT service. As we have observed, most pay-TV providers in the region continued to capitalise mainly on their own/dedicated OTT services with mostly localised contents. But with the increasing push from the European Commission (EC) directing SVoD providers such as Netflix, Amazon etc. to increase the share of local contents (i.e. TV shows and films made in Europe) to at least 30% of their overall portfolio, we are expecting some growth potential for these services. We are already seeing increasing OTT integration among operators in Poland, with some providers such as T-Mobile now offering several SVoD options in their portfolio (e.g. Netflix, ipla, Amazon Prime Video, Eleven Sports).

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Published: 2020-07-01

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