One of the smaller of the top four German cable companies, Kabel BW, has taken an MVNO (Mobile Virtual Operator Network) license from Telefonica this week. Kabel Baden-Wurttemberg was one of the four operating areas for what once were Deutsche Telekom owned cable companies and it has 2.3 million customer and passes 3.6 million German homes.
It will offer cellular services under its own name and will move to offer a full Quad play ‘ cellular voice, voice, broadband and TV in a series of packages. It says it will release more details on the services and pricing in the near future.
Back in May last year Kabel Deutschland Group (KDG), the biggest individual cable company in Europe, with 8.7 million TV customers did the same thing with Telefonica and now offers quad play services to its existing cable TV customer base, offering highly competitive rates.
KDG offers up to five SIMs to each cable household, and gives calls to existing Kabel Deutschland phone customers for nothing ‘ both fixed line customers and those who take this new deal. For calling the rest of Germany customers can either opt to pay €4.99 a month ($7.0), to call anyone in the entire German fixed line network or pay per call at €0.15 a minute, which is the same price for each SMS.
Although it has yet to report its cellular customer sign ups, they must be pretty effective and Kabel BW is set to follow suit. This is increasingly the way in which Telefonica looks to conquer mobile territories where it is not already the number one player.
This puts even more pressure on all European cable operators to sign an MVNO deal, following in the footsteps of Virgin Media which acquired name and mobile platform when NTL merged with Virgin Mobile in 2006. Virgin Mobile was originally an MVNO on T-Mobile.
In Germany, the Liberty Global owned Unity Media is yet to say which way it will go on cellular offerings, while its UPC Netherlands operation has just joined with the second largest cable player there, Ziggo, to buy spectrum for their own cellular network. Ziggo and UPC each cover about half of the Netherlands so don’t really compete head to head.
But Liberty Global has at least 7 other European subsidiaries apart from Germany and the Netherlands, and if it decides to offer an MVNO it could create a European wide price war in cellular. It could easily feel hard pushed to keep up with its two local rivals and make a call to Telefonica to at least sign up Germany in an MVNO, with a view to offering a Europe wide service later.
On the basis that my enemy’s enemy is my friend, Telefonica is being aggressive towards Deutsche Telekom’s by helping yet another of its triple play rivals make the leap to quad play.
The fact that Vodafone, which is the second largest cellular operator in Germany, has yet to open its network up for MVNO deals there, may be something that it regrets in the future, as Telefonica uses fixed line rivals to build up its market share.
The first offer from Kabel BW will be mobile Internet through a dongle on a PC. This will be a cut price offering the company says, and will charge low prices for access to Telefonia’s 7.2 Mbps HSDPA network, at €29.90 for the dongle, €9.90 to provision the line, €9.90 for shipping and will offer 3 months access for free with no minimum contract. You can also opt for a flat daily rate of €2.90 just to try it.
But this doesn’t yet take in how it will be positioned in a Quad play package, and these will be announced shortly
Telefonica really kicked off its current round of MVNOs with fixed line specialists when it cut a deal back in 2007 with its local Spanish cable operator ONO. More recently it has also signed up Mexico’s Megacable in a deal which will see an MVNO network go live by the end of September 2010. Megacable says it hopes to sign up 100,000 mobile subscribers in the first year.
Interestingly Telefonica owns its own fixed line German network after paying €1 billion to acquire Hansenet from Telecom Italia in a deal announced last November which was completed in February. Curiously it has launched a Hansenet cellular offering on its German cellular network with the identical pricing and terms of KDG.