Vodafone taps KPN in Netherlands convergence push

The head of Vodafone Netherlands said the country is in desperate need of a third provider of converged services, as the company launched a DSL-based service that enables it to offer fixed Internet, phone and TV services on a nationwide basis.

Rob Shuter, CEO of the operator's Dutch unit, said the launch of Vodafone Thuis (Vodafone at Home) nationwide will give subscribers in the country an alternative to bundled services from cable providers and KPN. Vodafone plans to invest heavily in the service over the next five years in a bid to become a top three player in the country, Shuter added.

"Vodafone [at] Home is a building block for our future, where fixed and mobile communication services will proceed with this seamlessly," Shuter noted in the company's announcement, adding: "We are taking an important step in the transformation [from] mobile service provider to a provider of the full range of communication services."

Shuter noted nine out of ten Dutch households currently subscribe to converged services from KPN or cable providers--an imbalance he said leaves the country in desperate need of an alternative player.

Vodafone at Home offers subscribers a choice of fully bundled services (Internet, phone, and TV) or individual elements (for example, TV and Internet only). The DSL service utilises KPN's network, offering maximum data rates available of 80 Mbps in some areas. Vodafone will also continue to use its own fibre network, which it states offers maximum rates of 500 Mbps.

Subscribers to the service are offered 54 standard digital TV channels as part of the package, 25 of which are high definition (HD) channels. Vodafone also offers a 10-day catch up service, and a TV viewing app for smartphones and tablets.

Shuter also noted that EBITDA margins in the fixed market are "more than 50 per cent" higher than in the mobile sector. Vodafone's service revenues in the Netherlands declined 4 per cent year-on-year in the second quarter, which the operator blamed on price competition, the economic environment, and mobile termination rate cuts.

For more:
- read Vodafone's DSL announcement (in Dutch)
- view Rob Shuter's blog (in Dutch)
- see Vodafone's Q2 earnings statement [PDF]

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