In reading this week’s Huntleys’ Morningstar report, I came across an article on TPG Telecom. At TPG’s AGM, there was mention of an increase in TPG’s home phone subscriber growth while others struggled. It was no surprise that their formula for success was bundling. Leveraging where they were strongest (broadband) and bundling with the home phone.
So where to next? I always find it interesting that at AGMs strategies are revealed, but I guess that’s what publicly listed companies have to do.
Next trend: TRIPLE Play Bundles! That’s right, TPG are going to offer broadband, home phone and pay-tv service.
iiNet and Internode are also changing business strategies for 2011, with applications becoming a focal point. iiNet MD Michael Malone, was quoted in Computerworld as saying “The last few years have mainly been about getting everyone connected to high-speed broadband, the next few years are really about how you use it – applications that can take advantage of the fact that you’re connected at very high speeds to the internet.”
It seems that to gain significant customer subscriber growth rates in the industry, you need to be ready to move with the leaders. Huntleys’ analysts are factoring in a steady Average Revenue per User (ARPU) of $43 in FY11. So what’s happening here? Are resellers going to get better rates from their service providers, or is intense competition going to result in a margin squeeze?
Not meaning to blow our own trumpet, but if you don’t have a billing & provisioning system that can give you flexibility to keep up with industry leaders AND able to make sure you’re being accurately charged by your service provider, then FY11 might be a tough road as competition continues to be intense.
PS. Huntley’s are recommending TPG Telecom stock as a BUY
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