What next for satellite DTH service providers?

The telecoms sector is embracing the triple play, but broadband is emerging as the new line rental. Services can be added in a variety of ways:

• Managed services (fixed/mobile voice, SMS/MMS, TV/VOD).
• OTT (partnering with the likes of Netflix).
• Operator OTT (using new technologies such as NFV, SDN, WebRTC, HTML5).

What is there left to do for managed services companies without infrastructure, i.e. satellite TV operators such as M7 Group? They can still be resellers, but if they want more control, there are still some options left.

First, remember that they have one strength (a strong TV portfolio, lots of HD) and two weaknesses (no VOD, no BB).

Here are some options:

• Add broadband:
• Become an unbundler on FTTH (or a wholesale customer of an independent unbundler).
• Partner with an MNO for rural areas, using outdoor LTE antennas (see Cyfrowy Polsat).
• Add VOD:
• Add interactive TV and VOD using HbbTV.
• Add VOD through a Netflix-partnership.
• Add VOD using the new Smart LNB technology.
• Remain focused on TV/video:
• Launch an OTT service (like BSkyB, Sky Deutschland, ONO, etc.).
• Focus on the wholesale market to service resellers, OTT providers, cable headends etc.

UPDATE: the second VOD option requires broadband access and so a hybrid STB, just like TV Vlaanderen (part of M7 Group) is now launching.

Acquisition targets in the Netherlands

It's deal time. And what could that mean for the Netherlands? A short summary:

• International operators could do a little portfolio management and decide they don't need an NL asset: Deutsche Telekom (perhaps increasingly likely now), Liberty Global, Vodafone and most of all Tele2, which requires from its operations an ability to be a Top 2 (hence the name) player. Of course business providers such as BT, Verizon, AT&T, Orange are in a different game, as are Colt, Easynet (private equity owned).
• Private equity investments: Ziggo (possibly heading for an IPO) and CanalDigitaal (could be attractive to any challenger on the TV market: KPN, Tele2, possibly T-Mobile or Vodafone).
• Cable providers: CIF focuses on passive network assets, but has a majority stake in CAIW. How about an IPO for this multi-MSO service provider? And then there are 20+ MSOs, in which CIF is presumably interested, but Ziggo and UPC as well. And perhaps even Reggefiber.
• Fiber assets: OBR (Rotterdam) and LomboXnet (Utrecht) could be targets for Reggefiber or CIF. Reggefiber itself has only one way to go: to KPN.
• Other: Scarlet (owned by Belgacom), Solcon (privately owned) and a long list of newcomers on the FTTH market.

KPN, the hoovering company, is a little unclear in its strategy right now. Under CEO Ad Scheepbouwer it has acquired someting like 40 companies (most importantly: Telfort, Getronics, Tiscali NL, iBasis). Recently, focus was moved from ISPs to MVNOs, but also Atlantic Telecom (business services) and NL-ix (Internet exchange). In the meantime, several assets were sold: fiber and business in Belgium, fiber in Germany, towers in the Netherlands. All quite helpful in reaching the free cash flow target.

So what could be next for KPN:

• Sell E-Plus and Base, by the same logic that DT sells T-Mobile USA: there is a step change coming for the roll-out of LTE.
• Sell more passive network assets. CIF is dying to buy them.
• Sell Getronics. Sort of a u-turn, but perhaps focus is moving to network assets (but not passive assets).
• Buy WiFi assets.
• Buy more MVNOs, esp. those focused on the business market.
• Buy CanalDigitaal (see above).
• Buy out Reggeborgh from Reggefiber.

To round off: one type of asset is out of reach of KPN: cooperatives. This could be the way forward on the FTTH market, but in light of the above (NL-ix), it implies that Ams-IX may be a desirable target, but cannot be folded into KPN.