Youfone not so ambitious with TV launch, innovation will be key

Thursday 14 September 2017 | 15:42 CET | Background

The Dutch MVNO Youfone has entered the TV market with its service YoufoneTV. A surprising move given the cord-cutting trend. The company will need to keep innovating to make its mark. 

Youfone is active for some time as a MVNO on the KPN network, with around 200,000 customers. Its network advantage is not so much the quality (T-Mobile is a bit ahead of KPN), but KPN's wholesale strategy. It's become clear as of late that KPN is focusing more on wholesale, working with partners that target certain market segments where KPN is absent. Examples include NLE (combining energy services with triple-play) and MVNOs offering unlimited data, such as Youfone and Robin Mobile. Youfone now adds a somewhat unconventional TV focus.

YoufoneTV is initially a service with a few limitations, but also some extras. The company is buying in broadband and VoIP access wholesale from KPN and has its own TV platform, built by Huawei. The broadband is only available over DSL, but the company confirmed to Telecompaper that it's also looking at launching on fibre. 

Youfone offers a choice of three plans: TV only for EUR 15 per month, TV and broadband for EUR 40 and TV, broadband and fixed telephony, also for EUR 40 per month. The latter two are offered for EUR 20 in the first six months. Telephony is charged on a pay-as-you-go basis. Broadband comes with a headline speed of 100 Mbps, which in practice will average at least 50 Mbps, the company said.

The TV package includes the legally required basic bundle of 23 channels and two add-ons that can be assembled 'a la carte' - either five channels from a choice of 14 for EUR 2.50 or 10 channels from a pool of 40 for EUR 4 per month. Various other features are included free such as the sports channel Fox Sports Eredivisie 1, replay, catch-up and VOD on a pay-per-view basis. The set-top box and Wi-Fi modem are free. 

While no perks are offered for combining fixed and mobile, Youfone is doing well to upsell its mobile base. MVNO customers will get some benefits such as 'Youcoins' and discounts. 

Youfone also offers a 'TV Everywhere' app, which can be purchased on its own with a limited number of 21 SD channels. This is similar to KPN's Play and T-Mobile's Knippr OTT TV services. These apps compete also with NLziet, which offers only the main NPO, RTL and SBS channels.

Youfone targets 160,000 customers for the TV service within three years, of which at least 50,000 taking the standalone app. Its main USPs are price, the TV/video extra and the a la carte channels. It has room to add more, such as channels like Discovery or international pubcasters, or a formal quad-play plan. Cord-cutting is growing, but for the moment most households still take a traditional TV subscription. If the cord-cutting trend accelerates, Youfone could introduce a combination of broadband and the TV app. 

The company's target is not especially aggressive - this would mean a market share of 2.2 percent in three years based on our market forecasts. Nevertheless, this means it's unlikely to disappoint. The competition is tough, cord-cutting is growing, and it's questionable whether it's offer is differentiated enough. For example, it does not have Netflix integration. Youfone will need to innovate further if it wants to take a good piece of the market. 

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