Our latest report is out with the new year, entitled FTTP Dynamics in a mature market – a quantitative analysis of Swedish broadband user behaviour. It’s the first ever (as far as we’re aware) comparative survey of FTTP and DSL broadband users looking into usage, attitudes and perception of broadband solutions.
This survey focuses on Sweden and was undertaken in collaboration with the FTTH Council Europe. It focuses on the most mature market in Europe, Sweden, but is part of a broader piece of work with annual surveys covering various European countries where FTTP is in deployment. Two more surveys have just been finalized in France and Portugal, initial results of which will be presented at the FTTH Council Europe Annual Conference in Warsaw on February 12th.
There are a number of key findings in this report (both for fiber broadband operators and for policy makers) that highlight how a market’s fiber maturity affects usage and perception. This is (in our opinion) a must read for any operator active in markets where FTTP is being deployed and commercialized. You can purchase the report via Paypal using the following buttons or contact us for other payment methods. We reproduce the executive summary in full below.
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Executive Summary
Quantitative examination of the Swedish broadband market yields insight that will likely apply to less mature markets as they progress towards more fiber broadband. Comparing Fiber to the Premise (FTTP) and Digital Subscriber Line (DSL) user attitudes and behavior shows the clear appeal of the fiber platform across the market and the high quality image associated with FTTP.
This image of quality does not however translate as much as might be expected into migration intentions from DSL to FTTP, mostly because many frustrated DSL customers have no fiber platform to migrate to where they live. FTTP users on the other hand still envisage upgrades to faster broadband, and while over a third of Swedish FTTP users are on speeds of over 100Mbps, the appetite for upgrades remains strong.
FTTP subscribers are clearly more inclined to use their Internet at home with time actively spent online being 30% higher for FTTP users compared to DSL users. Additionally, FTTP users tend to use niche or cutting edge services more frequently, and express more interest in ‘future’ service concepts such as medical monitoring at home, live tuition at home or TV-centric video-conferencing. Amongst FTTP users, those who are ‘very satisfied’ with their broadband solution are even more inclined to be express interest.
Since these concepts represent the potential for cross-selling into new types of subscription based services, ISPs have a clear opportunity – if they nurture quality of experience for FTTP users – to develop new revenue streams. In summary, as shown in Exhibit 1 above, there are three virtuous circles at play amongst Swedish broadband users:
• FTTP users are still eager to upgrade their broadband: this is an upsell opportunity that may lead to increased ARPUs on fiber over time,
• a large proportion of DSL users are frustrated by their inability to migrate to fiber because the platform isn’t available where they live: this is makes the business model of expanding fiber networks easier as demand will be stronger from day one,
• FTTP users are more willing to experiment with new service concepts: this is a cross-sell opportunity for service providers if they play their cards well and keep user satisfaction high.
Tapping into these opportunities remains challenging: while the better quality of experience is clearly perceived by FTTP users (even down to specific technical features like low latency or high upload speeds), DSL users still need some convincing and tend not to attach as much importance to their broadband solution as FTTP users. Furthermore, cross-sell opportunities require entering new markets (healthcare, home security, etc.) and taking risks. Still the opportunity exists, and ISPs can play a role in these if they don’t hesitate too long.
How these trends will replicate in less mature markets is a key question. Initial results from two upcoming identical surveys ran in France and Portugal by Diffraction Analysis in collaboration with the FTTH Council Europe suggest that perception of FTTP quality is strong from day one, even in less mature markets, but the appeal of FTTP for DSL users is lower as the market as a whole does not perceive the platform to be superior.
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