FTTH: Premium service is the most profitable approach in FTTH

Successful Service Strategies for FTTH Operators

Where’s the demand? Right here!

One of the arguments often used to defer or avoid deployment of fibre networks is that there is no evidence of demand for ultra-high-speed services and applications. But a study commissioned by the FTTH Council Europe shows that this perception does not match the reality.

Benoît Felten at Diffraction Analysis analysed the subscriber growth of a number of established FTTH service providers. The most significant factor influencing the take-up rate was the length of time that the business had been in operation.

This can be explained by the simple fact that the service can only grow in places where the infrastructure has already been deployed. As the potential customer base expands, marketing becomes more effective, and the number of people taking the service increases accordingly. While demand builds up fairly gradually, the research shows that there is no inherent problem with demand.

Interestingly, this finding was independent of the strategy being pursued by the FTTH service provider. Essentially there are three strategies: Players following “acquisition” strategies aim to maximise the number of customers through aggressive pricing. At the opposite extreme are service providers following “premium” strategies, who position their products at premium end of the market. And there are service providers who fall somewhere in between, typically because their pricing is constrained by competition and the local market.

Full executive summary can be found here

Full presentation can be found here