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BT and BSkyB Face Strong Competitive Challenges in Rapidly Evolving Markets
PR Newswire - July 07, 1998 00:15
Fixed Line Providers, Primarily BT, Stand to Lose 850 Million Pounds Sterling in Revenue as Convergence Changes the Balance of Power in U.K. Fixed Line and Pay TV Markets
NEW YORK, July 7 /PRNewswire/ -- J.D. Power and Associates announced the results of its 1998 Residential Convergent Services Study(SM) analyzing the fixed line and Pay TV buying habits of U.K. consumers. The report reveals that consumers indicating an intent to purchase multiple services from one provider (convergence) could cause the fixed line providers (primarily BT) to lose approximately 850 million pounds in revenue. Correspondingly, BSkyB could lose approximately one-half of its satellite TV business as households converge with fixed line and cable TV providers.
"Despite BT's position as the pre-eminent provider of fixed line telephony with 88% market share and BSkyB's dominance in the Pay TV market, the smaller cable providers are enjoying the fruits of burgeoning consumer demand for convergent services," said Peter Dresch, director of telecommunications market analysis at J.D. Power and Associates.
The report assesses the current and future convergence landscape in the U.K. analyzing the impact of competition on the residential market and on providers of fixed line telephony and Pay TV services to U.K. consumers. J.D. Power and Associates interviewed approximately 4,200 households served by BT, BSkyB, CWC, Comcast, General Cable, NTL and Telewest.
Other major findings of this analysis include:
* Approximately one in ten U.K. households purchase both telephony and
Pay TV services from the same provider, spending 1 billion pounds on
convergent services. Among the major convergent providers (CWC, Comcast,
General Cable, NTL and Telewest), NTL has the highest proportion of
customers purchasing telephony and Pay TV services from the same company.
However, because of its larger size, CWC captures the highest percentage
of convergent revenue.
* U.K. households that combine their telephony and Pay TV service with a
convergent service provider (CSP) are significantly more satisfied with
their services than those who use separate providers.
* About 50% of U.K. households are interested in purchasing multiple
services from a single provider in the future, indicating a favorable
propensity for growth in the convergent market.
* If given the opportunity, most current convergent consumers are likely
to choose their cable company for additional telecommunication services
because, according to their customers, they provide the best service and
have competitive pricing. In contrast, single service consumers are more
likely to choose a fixed line provider because they are more familiar with
them and feel they are more reliable.
"The results of the study indicate that offering a converged menu of services is, and will continue to be, a marketing imperative," said Dresch. "For consumers, this can mean lower monthly costs, simplified billing and, in some cases, higher satisfaction with the services they purchase."
The 1998 Residential Convergent Services Study is based on the results of syndicated studies funded independently by J.D. Power and Associates acting as an unbiased third party analyzing consumer opinions.
J.D. Power and Associates is an international firm best known for its marketing information services in key business sectors including market research, forecasting and customer satisfaction. The firm's quality and satisfaction measurements are based on actual customer responses from more than one million consumers annually. Headquartered in Agoura Hills, California, the firm also has U.S. offices in Torrance, California; Michigan; and Connecticut. International locations include Japan, Korea, England, Canada and Brazil.
J.D. Power and Associates can be accessed through the World Wide Web at jdpower.com. Media e-mail contact: peter.dresch@jdpower.com.
This press release is provided for editorial use only. No advertising or other promotional use can be made of the information in this release or J.D. Power and Associates survey results without the express prior written consent of J.D. Power and Associates.
SOURCE J.D. Power and Associates
/NOTE TO EDITORS: The company name is J.D. Power and Associates. No
ampersand (&) is used in place of the word "and," and there is no "s" in
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