Deutsche Telekom has yet to rule out the possibility of maintaining its Netherlands business as a mobile-only operation, despite preferring to compete with the converged services being offered by the unit's rivals.
The German incumbent believes the success of its T-Mobile US business highlights that businesses operating mobile-only strategies can still be competitive in a multi-play era, and is considering applying the lessons of its U.S. subsidiary to T-Mobile Netherlands, Bloomberg reported citing sources familiar with Deutsche Telekom's strategy discussions.
T-Mobile US has consistently grown its subscriber base over the past six quarters by offering a mix of aggressive pricing and exclusive offers such as free access to video services, Bloomberg noted. In contrast, T-Mobile Netherlands is losing subscribers, as consumers are increasingly drawn to the converged services offered by Vodafone Netherlands, KPN and Tele2 Netherlands.
Multi-play service revenues in the Netherlands increased by 7.4 per cent year-on-year to €933 million ($1.06 million) in the third quarter of 2015, research by Telecompaper revealed. In its Dutch Consumer Multiplay Market 2015 Q3 report, the news outlet stated that the majority of services were triple-play, but that revenues from quad-play services increased 14 per cent year-on-year.
While Deutsche Telekom believes it could make a mobile-only strategy work in the Netherlands, the German operator would prefer to compete in the field of converged services, Bloomberg stated.
The company is considering its options for T-Mobile Netherlands after a planned sale of the business fell through. Deutsche Telekom had narrowed the list of potential bidders to private equity companies Warburg Pincus and Apollo, but the respective bids were less than the price Deutsche Telekom set on its Netherlands business.
Erhan Gurses, a Bloomberg Intelligence analyst, told the news agency that Deutsche Telekom could resurrect its hopes of selling T-Mobile Netherlands if an aggressive mobile-only strategy paid off. However, he noted that the company stood less chance of replicating the success of T-Mobile US in the Netherlands due to the drive towards converged services in the country.
For more:
- see this Bloomberg report
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