Tuning In TV Equals Telcos Triple Value 1 1 
RECALL No 16 – Consumers, Convergence, Connectivity, and the Cloud
Tuning in: TV equals telcos’ “triple value”
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08 Tuning in: TV equals telcos’ “triple value”
Once considered “yestertech” by the industry, television is now becoming the central element of many telco strategies. Operators in mature and emerging markets alike are benefiting from the revenues and new customers TV attracts, making this a must-have element in any telco’s product lineup.
Digital television is rewriting the rules of the game for telecoms operators. Long considered marginal to their business, successful players now view pay-TV as a critical element of their go-to-market strategies for the residential segment. Borrowing tactics from the attacker’s playbook, first movers in their field are finding they have a critical advantage. The key is to reconceptualize their business model, selecting the appropriate strategy for their market context.
Myth and reality
Several commonly held beliefs related to telcos and TV have proved a myth as full convergence gains momentum. The first is that TV is not a telco business. Actually, it is – or should be. A recent McKinsey survey in Europe revealed that over 60 percent of consumers seek tripleplay offers (voice, data, and TV) and consider TV the prime element of the three. In some markets, TV is in fact the key attribute on average, with around 2.5 times the relative importance of the second most valued element (excluding price), and is indeed the one that best differentiates the offer. Research also shows that interest in pay-TV has exploded across all markets, both in developed and emerging economies. For example, telco-driven TV-based bundles make up over 65 percent of the revenue pool in one Latin American country, and
analysts expect these revenues to grow at a rate of over
9.5 percent annually through to 2014.
Another fallacy is that TV produces marginal revenues.
Again, this is untrue. While currently still small in terms of revenues, bundles
Tuning in: TV equals telcos’ “triple value”
59
08 Tuning in: TV equals telcos’ “triple value”
Once considered “yestertech” by the industry, television is now becoming the central element of many telco strategies. Operators in mature and emerging markets alike are benefiting from the revenues and new customers TV attracts, making this a must-have element in any telco’s product lineup.
Digital television is rewriting the rules of the game for telecoms operators. Long considered marginal to their business, successful players now view pay-TV as a critical element of their go-to-market strategies for the residential segment. Borrowing tactics from the attacker’s playbook, first movers in their field are finding they have a critical advantage. The key is to reconceptualize their business model, selecting the appropriate strategy for their market context.
Myth and reality
Several commonly held beliefs related to telcos and TV have proved a myth as full convergence gains momentum. The first is that TV is not a telco business. Actually, it is – or should be. A recent McKinsey survey in Europe revealed that over 60 percent of consumers seek tripleplay offers (voice, data, and TV) and consider TV the prime element of the three. In some markets, TV is in fact the key attribute on average, with around 2.5 times the relative importance of the second most valued element (excluding price), and is indeed the one that best differentiates the offer. Research also shows that interest in pay-TV has exploded across all markets, both in developed and emerging economies. For example, telco-driven TV-based bundles make up over 65 percent of the revenue pool in one Latin American country, and
analysts expect these revenues to grow at a rate of over
9.5 percent annually through to 2014.
Another fallacy is that TV produces marginal revenues.
Again, this is untrue. While currently still small in terms of revenues, bundles