UPC Netherlands simplifies triple-play offer

Wednesday 16 October 2013 | 13:09 CET | Background

Cable operator UPC Netherlands changed its product portfolio in early September, stepping up competition on pricing with rival triple-play providers. The company's new offers positions it well in the low and mid-range market segments.

UPC’s triple-play portfolio has become more accessible, with three items standing out:
  • Fewer additional paid services. For example, the Horizon gateway launched in September 2012 is no longer part of the basic offer. 
  • UPC is focusing on the low end of the market. This targets the single-/dual-play DSL customers who have been moving to DSL providers for triple-play offers and ending their analogue TV subscriptions with cable operators such as UPC.
  • On low-end and premium packages, UPC has increased upload speeds. 

In commercials, UPC positions its Alles-in-1 Power package as the new standard offer. This package includes a broadband connection at up to 120/6 Mbps, 70 digital TV channels including 15 in HD, TV recording, more than 50 TV channels  available for online viewing and more than 1,000 titles in the VoD library, all for EUR 50 per month. Compared with the previous package, the price has increased by EUR 0.50 per month, but includes 11 additional HD channels and double the download speed.

At the low end of the market, the new Alles-in-1 Basis package is also much improved compared to the previous offer. It now offers 70 TV channels, of which 15 in HD, compared to 29 channels with three in HD before, and increases the broadband speed to 50/2.5 Mbps from 30/3 Mbps. The price is EUR 40 per month, again just a 50 cent increase from EUR 39.50 previously. This shows that UPC has not forgotten to target the lower end of the triple-play market.

The premium triple-play package, Alles-in-1 Extra Power, has the same download speed (200 Mbps) as the previous top-of-the-range plan (Alles-in-1 Extreme Power), but its upload speed was lowered from 20 Mbps to 10 Mbps. For TV, customers no longer need to take the Horizon offer and now get 142 digital TV channels with 33 in HD. The monthly fee was reduced from EUR 89.50 to EUR 65. 

Compared with the old Alles-in-1 Power offer of 100/10 Mbps broadband plus Horizon TV, the price of the new Extra Power plan is EUR 7.50 more per month, but the new package offers double the download speed plus 40 additional TV channels, including 22 in HD. Horizon TV is still available as an add-on for Power and Extra Power customers, at EUR 5 per month.

Best offer in triple-play market

UPC’s changes have positioned it as the best offer in the triple-play market. This is based on an analysis of monthly fees, broadband speeds and the number of digital TV channels offered and includes a comparison with not only direct competitors using DSL or fibre networks but also UPC’s fellow cable operator Ziggo.

We looked at three types of package available on the market: start packages (up to EUR 50); basic (between EUR 50 and EUR 65) and premium (more than EUR 65). The analysis shows that UPC is no longer present in the premium price category, while all its packages score well in terms of price, given the high broadband speeds and large number of channels offered. 

Table 1: Overview triple-play packages with MAF up to EUR 50 (operator websites, Telecompaper analysis)

UPC’s Basis package is at the lower end of the start segment with its monthly fee of EUR 40. It offers the most TV channels and highest broadband speeds compared with similar priced packages. At the high end of the segment, UPC’s Power package offers the highest broadband speeds. Compared with fibre competitors like Telfort, Tele2 and OnsBrabantNet, its TV portfolio also offers more HD channels. 

Table 2: Overview triple-play packages with MAF between EUR 50 and EUR 65 (operator websites, Telecompaper analysis)

In the basic segment, UPC Extra Power offers the most TV channels, except for satellite TV operator CanalDigitaal, as well as the highest broadband speed of all packages in this price range.

Table 3: Overview triple-play packages with MAF of more than EUR 65 (operator websites, Telecompaper analysis)

The reduction in prices has left UPC without a triple-play package in the premium segment, as table 3 shows.

More services for less money

UPC’s move of adding more services for less money is not uncommon in the triple-play market. Dutch providers have been adding more TV channels (including HD) and features such as watching live TV on computers and mobile devices as standard parts of their triple-play packages. KPN is doing this as well, to the point that its current radio ad runs in two parts due to so many things included in the triple-play offer. UPC has chosen to position its Power package as the new standard offer in its advertising campaign, focusing on the extensive content in the package for a low monthly fee.

The question is whether Dutch consumers are really waiting for more TV channels or higher broadband speeds. Telecompaper’s Consumer Panel data for the third quarter of 2013 shows that the TV channels are number five on the list of most mentioned reasons to select the current TV provider. Broadband speed ranks number eight among reasons to choose a broadband service provider. A bundled offer at a better price may be a better strategy: bundled offerings with more attractive monthly fees was the top reason (24%) cited by all TV and broadband users to select their current service provider.

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