Ranking of 5 leading quad-play markets in Western Europe

By Anne Morris

Operators in Western Europe have been marketing bundles combining fixed broadband, TV, voice and mobile for years, but they have tended to be large incumbent players with the benefits of a significant market presence as well as fixed and mobile operations. More recently, there has been a surge of interest in so-called fixed-mobile convergence (FMC), or quad-play offerings, as mobile and fixed operators seek to add more services to reduce churn and bring in new revenue streams.

This report looks at five leading quad-play markets in Western Europe and ranks them based on data provided by Pyramid Research for the five markets as of the end of 2014. The markets in order of ranking by household penetration of quad-play bundles are France, Portugal, Belgium, Spain and the Netherlands. It should be noted here that Pyramid Research does not cover all European markets and there could be markets where FMC coverage is higher than in the Netherlands, for example. The research firm also points out that while quad-play and FMC take-up tends to be stronger in Western Europe than in other regions, Poland is one country in Central and Eastern Europe with good FMC adoption.

Although the markets are ranked in terms of the percentage of households with quad-play (also written as 4P) bundles, a deeper dive into the data reveals other strengths and drivers that could impact a market's ranking if looked at in different ways.

Percentage of households that have quad-play bundles
  2012 2013 2014
France 29% 36% 43%
Portugal 1% 6% 26%
Belgium     15%
Spain 1% 4% 13%
Netherlands   3% 5%
Source: Pyramid Research

Natasha Rybak, principal analyst for consumer services Europe at Current Analysis, in the case of markets like Portugal and France, notes that quad-play offers integrating fixed and mobile service components have been available from more than one operator for some time, fuelling household penetration.

"In Belgium, Proximus has also been offering integrated fixed/mobile packages for a while, and has seen steady take-up, but has been the only large-scale operator doing so. The situation is similar in the Netherlands, although KPN's offer is more recent," Rybak said.

Further details and clarifications for each of the five leading markets are provided in the rankings below:

1. France: 43% quad-play household penetration

This figure is an estimate provided by Pyramid Research based on its analysis of French service providers. Pablo Iacopino, an analyst and the director of Europe at Pyramid Research, noted that the research firm also considers Free Mobile's "3P+" plans within the "4P" data -- that is, the company offers triple-play plans with the option to add a mobile plan but still provides two bills rather than one.

Orange is dominant in France with a 39 per cent share of quad-play bundles (4.66 million out of 11.95 million at the end of 2014). The company has been providing "Orange Open" plans for several years.

SFR also sells 4P bundles under the "Multi-Packs" brand that combine fibre and mobile plans. Now that it has merged with cable operator Numericable, the company is expected to step up its FMC strategy. Bouygues Telecom, once a strong driver of quad-play packages, has placed a greater focus on separate triple-play and smartphone plans.

2. Portugal: 26% quad-play household penetration

Portugal is a dynamic quad-play market with 26 per cent of households taking quad-play bundles, but when looking at penetration in terms of fixed broadband plans -- with fibre a strong driver of quad-play in this market -- the share is much higher at 39 per cent. Also, as noted by Iacopino, the 26 per cent share refers to "4P+" plans, including both quad-play and quintuple-play (5P). In fact, more than 90 per cent of the 26 per cent is 5P, Iacopino added.

Total 4P bundles amounted to 1.05 million by the end of 2014, of which 973,553 were 5P.

Mobile operators NOS and MEO both market 4P and 5P plans under Quatro/Cinco and M40/M50 respectively. Vodafone Portugal has been slower to the 4P table but now also offers packages combining home TV, broadband, fixed voice and mobile.

3. Belgium: 15% quad-play household penetration

Belgium has made relatively good 4P progress primarily due to the incumbent operator Belgacom, which now markets all of its services under the Proximus brand. Proximus accounted for 480,000 4P bundles by the end of 2014.

Rival mobile operators do not currently compete in the multi-play market, but this situation is set to change. Orange-owned Mobistar plans to start reselling cable services as soon as regulatory conditions allow, and Base Belgium is in the process of being acquired by Liberty Global-owned cable operator Telenet, which already sells mobile plans and triple-play bundles.

4. Spain: 13% quad-play household penetration

In many respects, Spain's ranking in fourth place does not fully reflect the market's strong 4P progress, which has been primarily driven by the Movistar Fusion plans offered by incumbent operator Telefónica.

This is because FMC without TV is very popular in Spain and accounts for 33 per cent of households. If all fixed and mobile bundles without TV are also taken into account, FMC as a percentage of households rises to 46 per cent, putting Spain in first place in this ranking.

"The strategy in Spain has been to sell F-M [fixed-mobile] bundles without TV first, and then upsell TV. This explains why there was a large adoption of F-M without TV first and now people are adding TV on top of the F-M bundle," noted Iacopino.

All four mobile operators in Spain now offer 4P bundles. Even the market's No. 4 operator, TeliaSonera-owned Yoigo, now offers 4P using the Fusion brand under an agreement with Movistar.

In general, FMC is a growing trend here after Vodafone Spain acquired cable operator Ono and Orange snapped up Jazztel, meaning the two mobile operators now have more fixed assets at their disposal.

5. Netherlands: 5%  quad-play household penetration

Like Belgium, the incumbent operator is the primary driver of quad-play in the Netherlands. In fact, KPN is responsible for all 4P plans in the Dutch market, where it markets bundles under KPN Compleet, with 357,000 bundles taken up by households at the end of 2014.

What lies ahead?

Iacopino noted that strong market drivers for quad-play include the presence of an incumbent operator that offers such bundles and provides a mass-market proposition; a good provision of fibre and LTE services to support the different elements of the bundles; and the presence of two or three strong, integrated operators that are capable of offering such services.

"This is not a situation we have in very many European countries, but that is changing," he said, referring to operators such as Vodafone that have been buying up fixed assets in markets including Germany and Spain. He added that the UK would be an interesting market to watch in future if BT succeeds in buying EE and creates a strong integrated player.

Rybak said quad-play, quintuple-play – indeed, fixed and mobile multi-play in a variety of formats -- will continue to gain momentum in Europe, as more operators position themselves as integrated providers, and as more consumers become accustomed to the availability of such offers.

She also pointed out that "quad-play" offers are not necessarily bundled package propositions: quad-play can mean different things coming from different providers in different places.

"Along with the integrated fixed/mobile bundling approach -- as seen for example in France, or from Proximus Belgium -- is an approach that encourages customers to subscribe (separately) to both fixed and mobile services and packages through the use of compelling incentives," she said, citing KPN Compleet and the new MagentaEINS converged offer from Deutsche Telekom as two examples.

It is also true that quad-play or multi-play is not a universal prescription for customer satisfaction.

"There are some users who will simply not be interested for any number of reasons, there will be country markets where providers don't push the approach as strongly, and there is still room for specialist fixed and mobile players to address the needs of some customer segments," Rybak said.

In Rybak's view, the successful fixed/mobile competitors will be the ones that are able to incentivise their customers to purchase multiple services across both the fixed and mobile fronts over the long-term, whatever approach is being used, whether it's a quad-play bundle, loyalty incentives or multi-service discounting and value-added services.

Ranking of 5 leading quad-play markets in Western Europe
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