Company Trend Analysis - Movistar To Leverage Premium Content For Converged Services - AUG 2017

BMI View: With the relatively expensive cost of FTTH and IPTV services Movistar will have to offer premium localised services to encourage uptake . Untapped demand and Colombia ' s improving economic conditions will contribut e to the uptake of these services , but e xpansion to the rich Bogota market will be key for a successful converged services strategy in the country.

Telefonica's Movistar has launched fibre-to-the-home (FTTH) and IPTV services in six Colombian cities, which it plans to roll out to the rest of the country in the future. The capital, Bogota will not be included in the initial six, and no plans for a Bogota launch have been revealed yet. Movistar will be offering triple-play plans with internet speeds ranging from 10Mbps to 100Mbps, and including Movistar TV, its pay-TV platform, Movistar Play, its video-on-demand (VOD) platform and unlimited landline calls. The prices will range from COP117,900 (USD83.54) to COP244,900 (USD40.22) monthly. With such expensive services, Movistar needs a suitable strategy to encourage subscriptions.

We believe Movistar will be at least moderately successful in offering these services. The latest available pay-TV data from the Colombian telecoms regulator shows a subscriptions year-on-year growth of 4.8% in 2015, suggesting untapped demand for services. We have long held the view that exclusive and premium content is central to successful VOD and pay-TV strategies. Movistar partnered with Vivendi in late 2016 to provide exclusive premium content for Movistar's Latin American subscribers, but the operator must also leverage its exclusive content library by catering to local preferences. Blim's success in Mexico, where the high popularity of Spanish-language soap-operas in the region was crucial, provides a clear example (See ' Locally Appealing Content Key To Blim's SVOD Success' December 12 2016 ).

Broadband Momentum To Drive Converged Services
Colombia - Broadband Subscriptions
f = BMI forecast. Source: CRC, BMI

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