#ftthwebinar FTTH Consumer Experience in …...2015/09/16 · Benoît Felten CEO Diffraction Analysis THE IMPACT OF MATURITY ON FTTH/B SATISFACTION AND USAGE Benoît Felten, CEO [email protected]

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FTTH Consumer Experience in Europe:

How Maturity Affects Usage

Purpose and Methodology

• This study commissioned by the FTTH Council Europe aimed at measuring the differences in broadband attitudes and usage between FTTH/B users and legacy DSL users in Portugal. • It is part of a series of three such studies undertaken in a mature market (Sweden), a maturing market (Portugal) and an immature market (France). • The study was conducted in December 2014, via an online quantitative survey of 400 broadband respondants. The survey was run by Paradox’ Opinion / OpinionWay.

• The sample included 300 FTTH/B users and 100 DSL users. The survey was conducted in Portuguese. • The following presentation highlights the key findings.










Moderator:

Joeri Van Bogaert

Chair Financing Committee

FTTH Council Europe

Presenter:

Benoît Felten

CEO

Diffraction Analysis

THE IMPACT OF MATURITY ON FTTH/B SATISFACTION AND USAGE Benoît Felten, CEO

[email protected]

For


• Following an insightful study of Swedish Broadband Users in 2014, this study commissioned by the FTTH Council Europe aimed at measuring the differences in broadband attitudes and usage between FTTH/B users and legacy DSL users in France and Portugal. • The study was conducted in early December 2014, via an online quantitative survey of 2x400 broadband respondants. The survey was run by Paradox’ Opinion / OpinionWay

• The sample included 2x300 FTTH/B users and 2x100 DSL users. The surveys were conducted in French and Portuguese. • The following presentation puts in perspective the three country surveys and examines the impact of market maturity on FTTH/B perception and usage.

10% -

20% -

30% -

40% -

50% -

I 2005

I 2006

I 2007

I 2008

I 2009

I 2010

I 2011

I 2012

I 2013

I 2014

Three Countries with Different FTTH/B Maturity

Sweden

Portugal

France

FTTH/B Maturity % FTTH/B in Nat’l Broadband from year 10% was reached

Source: FTTH Council Europe / Diffraction Analysis / PTS / Anacom / ARCEP

• The three countries for the survey were chosen because they displayed very different levels of FTTH/B Maturity.

• Sweden is the most mature, having passed 10% FTTH/B in 2005.

• Portugal is the second most mature, having passed 10% in 2011.

• France is the least mature with the 10% threshold only reached in 2014.

Key Differences between Markets

11%

6%

40%

43%

46%

45%

23%

17%

54%

40%

44%

31%

28%

36%

10%

9%

17%

38%

41%

7%

7%

0% 20% 40% 60% 80% 100%

Sweden FTTH/B

Sweden DSL

Portugal FTTH/B

Portugal DSL

France FTTH/B

France DSL

Types of Broadband Offers

4P 3P 2P 1P

• Swedish Market is heavily weighed towards single and double play offers

• Portuguese and French markets are heavily weighed towards triple and quadruple play offers

92 103

126

0

20

40

60

80

100

120

140

Sweden Portugal France

Average FTTH/B Revenue Upswing (Base 100 is Average DSL Revenue)

• In Sweden and Portugal, no revenue upswing from FTTH/B.

• In France, big revenue upswing from FTTH/B.

Source: FTTH Council Europe / Diffraction Analysis / Paradox’ Opinion / OpinionWay Source: FTTH Council Europe / Diffraction Analysis / Paradox’ Opinion / OpinionWay

Spending on FTTH/B compared to DSL

-20% -

-10% -

DSL

+10% -

+20% -

I 2005

I 2006

I 2007

I 2008

I 2009

I 2010

I 2011

I 2012

I 2013

I 2014

Sweden -8%

Portugal 3%

France 26% +30% -

ARPU Gap Between FTTH/B and DSL

Source: FTTH Council Europe / Diffraction Analysis / Paradox’ Opinion / OpinionWay

• When examined in the context of market maturity it looks like ARPU Gap between FTTH/B and DSL is a factor of maturity.

• Indeed, when the product is new on the market it is often sold as a premium, but as competition increases in FTTH/B and customer volumes increase, prices tend to become lower.

• The likelihood is that the French exception will not stay and exception for long.

Gap between DSL and FTTH/B Satisfaction

0% -

5% -

10% -

15% -

20% -

I 2005

I 2006

I 2007

I 2008

I 2009

I 2010

I 2011

I 2012

I 2013

I 2014

Sweden 16%

Portugal 7%

France 2%

Satisfaction Gap Between FTTH/B and DSL Users ‘Very Satisfied’ with their Broadband Solution


• When looking at users who are ‘very satisfied’ with their broadband, market maturity seems to have an impact.

• The gap between the satisfaction of FTTH/B users and DSL users is massive in Sweden, significant in Portugal and minute in France.

• The recognition of FTTH/B as the superior platform takes time.

Satisfaction with FTTH/B technology is strong from the start

44%

27% 31%

17% 20% 18%

0%

10%

20%

30%

40%

50%


Satisfaction with Speed and other Technical Specs ‘Very Satisfied’ Users

FTTH/B DSL


• Irrespective of market maturity, FTTH/B users are significantly more satisfied with the technical aspects of their broadband than DSL users.

• In particular, it’s interesting to note that in all three countries FTTH/B users value and perceive the benefits in terms of Latency and Upload speeds provided by fiber.

Price perception towards DSL shifts with market maturity

32%

46%

30%

59% 57%

29%

0%

10%

20%

30%

40%

50%

60%

70%


Users who find the price of their broadband solution ‘excessive’

FTTH/B DSLSource: FTTH Council Europe / Diffraction Analysis / Paradox’ Opinion / OpinionWay

• In Sweden and Portugal, many more DSL users think the price of their broadband is excessive than FTTH/B users.

• This is a direct result of FTTH/B users getting better service for the same price.

• In France, where FTTH/B is still a premium product, price perception is equivalent between FTTH/B and DSL: purchase is an arbitration between quality and cost.

Fiber users rate their shift to fiber positively

43%

38%

34%

32%

43%

42%

0% 20% 40% 60% 80% 100%

Sweden

Portugal

France

Positive rating of the shift to fiber broadband

Much Better Better


• Irrespective of market maturity, users who have shifted to fiber broadband massively rate it as a better experience than what they had before.

• This illustrates the fact that the perception of quality from Fiber Broadband is immediate, the differences in perception are more about non-fiber users catching up.

Upgrade Intentions Evolve with Market Maturity

13% 13%

7% 6%

27%

8%

0%

5%

10%

15%

20%

25%

30%


Upgrade Intentions in the next 12 months Users who state they will « certainly » upgrade

FTTH/B DSL


• DSL upgrade intentions low as coverage becomes a hurdle

• FTTH/B upgrade intentions significant as users want more capacity

• DSL upgrade intentions very high as value of FTTH/B becomes well know

• FTTH/B upgrade intentions significant as users want more capacity

• DSL upgrade intentions low as value of FTTH/B not yet recognized and price a barrier

• FTTH/B upgrade intentions low as users new to the service

In less mature markets there is little difference in online usage

• The differences in intensity and type of online usage between FTTH/B and DSL users in Sweden were significant. In France and Portugal they are practically non-existent. • Several aspects may explain this. First, the Portuguese and French markets have much higher emphasis on TV than the Swedish market (as shown by the proportion of 3P/4P products). • Second, these markets are less mature, so users have not had FTTH/B for as long on average. Source: FTTH Council Europe / Diffraction Analysis / Paradox’ Opinion / OpinionWay

3,6

4,4

5,3

3,3

4,7

4,1

0

1

2

3

4

5

6

France Portugal Sweden

Hours spent online at home

FTTH/B

DSL

Three Virtuous Circles in a Mature Market

FTTH/BUpsell

FTTH/BCross-sell

FTTH/Buserskeepwan nghigher

performance,anopportunityforupsellrevenue

increase

FTTH/Busersaremoreinterestedinnewserviceconcepts,someofwhichpresentrevenueopportuni esforISPs

ImprovedDeployment

BusinessModel

Pent-updemandfromDSLuserswhocannotmigratetofib

erimprovesthebusiness

modelofoutwardfib

e

rdeployment

Moreusersontheexis ngFTTH/Bpla ormmeansmoreopportunitytoupsellorcross-sell

EasiereconomicsinfibernetworkextensionfeedstherevenueopportunityofFTTH/B

DSL

FTTH

/B

Source:Diffrac onAnalysis,2014

Key Conclusions

• Perception of superior FTTH/B quality by FTTH/B users happens immediately • Perception of superior FTTH/B quality by DSL users takes time, especially if FTTH/B is priced at a premium • Gap in satisfaction between FTTH/B and DSL increases with market maturity • Upgrade intentions to FTTH/B from DSL follow a classic bell curve • Upgrade intentions from FTTH/B users is significant in a mature market • Usage behaviour online may or may not be affected by FTTH/B, depending on the importance of TV over broadband in the market

Timeline of positive market outcomes from FTTH/B adoption

I 0

I 1

I 2

I 3

I 4

I 5

I 6

I 7

I 8

I 9

FTTH/B Upsell

FTTH/B Adoption

Improved Deployment

Business Model

FTTH/B Cross-sell

Years after 10% FTTH/B in Broadband Mark Passed

Source: FTTH Council Europe / Diffraction Analysis



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#ftthwebinar FTTH Consumer Experience in …...2015/09/16 · Benoît Felten CEO Diffraction Analysis THE IMPACT OF MATURITY ON FTTH/B SATISFACTION AND USAGE Benoît Felten, CEO [email protected]