Tiscali 2007 Annual Report Download - page 29

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be counterbalanced by voice service sales (both CPS and
VoIP) and content sales (Triple Play - IPTV) offered as bun-
dled services.
IDC expects the bandwidth demand to grow from an average
of 5.5 Mbps at the end of 2007 to almost 9 Mbps in 2010.
The services offered have become more attractive through
quality aspects such as bandwidth availability, voice services
(VoIP), music, video, content and sophisticated interaction with
the customer.
The development of the
unbundling
market by alter-
native operators (OLOs)
Thanks to more favourable regulations and procedures for ULL,
decreasing costs and growing demand for broadband access,
over the last few years increasingly more operators have made
infrastructural investments. Thanks to this direct access method,
due to investments in infrastructures alternative operators (OLOs)
such as Tiscali can achieve higher margins, greater flexibility in
differentiating their range and higher customer retention, by
means of favourable sales policies.
In this respect, in recent years there has been a strong develop-
ment in network unbundling, to the detriment of wholesale and
bitstream services.
The graphs presented below show the evolution of the
Whole-
sale shares
, where one can see an increase of the ULL market
in Italy and the UK.
In the UK, a pick-up is expected in unbundling coverage by alter-
native operators (OLOs), in the face of a market share of the
incumbent
operator already significantly lower than the European
average and the Italian one.
REPORT ON OPERATIONS
28
Mbps
10
5
0
2004 2005 2006 2007 2008 2009 2010
WESTERN EUROPE AVERAGE BAND CONNECTION 2005-2010
SOURCE: IDC, 2006
INCUMBET RETAIL DSL RESALE/BITSTREAM SHARED ACCESS FULL ULL
%
70
60
50
40
30
20
10
0
1Q 2007 4Q 2007 4Q 2008 4Q 2009 4Q 2010
WHOLESALE MARKET SHARES IN ITALY
SOURCE: ANALYSIS, “THE COMPETITIVE DYNAMICS OF DSL IN WESTERN EUROPE: PROSPECTS FOR LOCAL LOOP AND BITSTREAM” (OCTOBER 2006)
66% 11% 5% 14% 66% 8% 7% 16% 66% 6% 6% 18% 65% 6% 5% 21% 65% 6% 3% 23%