Mobile operators are abandoning the previously predominant model to subsidize handsets and to, in return, lock customers in on long contracts with elevated service fees.
The death of the model should be mourned by no one since end-users have been given choice and flexibility through a multitude of non-binding, cheaper and flexible service options with generous – or even unlimited – allowances. Operators have seen customer churn decrease as end-users hold onto their handsets longer. As a direct consequence, EBITDA margins have increased.
Investors might still complain about the revenue growth, but measured as percentage of revenue mobile carriers currently produce the best margins on record. Continue reading Carriers moved away from subsidizing handsets. Now they subsidize customers’ video consumption.
Some of you might feel that tefficient tends to overstate the importance of Netflix for telecoms.
In most European markets where Netflix operates, it has as many subscribers as all other paid video streaming services together. In some of these countries Netflix has more households subscribing to its service than there are IPTV households in the country. Continue reading Chart: Why Netflix’ expansion is good news for mobile carriers
This is a correlation graph that simply had to be done 🙂 We know that Netflix is the single biggest driver of fixed Internet bandwidth in its original market, USA, with up to 40% of downstream traffic at peak hours.
In just two years, Netflix built as large subscription bases as the largest pay-TV providers in some of the European markets launched, so it’s likely that Netflix has a major impact on fixed Internet traffic also in Europe.
One of the benefits with Netflix is portability: It runs on almost any device you might have. Many of these devices – smartphones and tablets e.g. – are often connected over mobile networks. Have the Netflix viewing habits gone mobile beyond Wi-Fi? Can we observe a Netflix effect on the mobile data usage?
The graph correlates the average mobile data usage per any SIM with the number of years Netflix has been in service per country. It’s not perfect, but let’s not dismiss it as just trivia.
Netflix has competitors. The entry of Netflix into new country markets has often paved the way for others (like HBO) when consumers have come to adopt a video streaming habit. Plus that Netflix in most markets have forced incumbent cablecos and satellite providers like Sky to launch portable streaming platforms to complement the traditional viewing experience at home.
This month, Netflix launches in four additional European markets: Germany, France, Austria and Belgium. Austria has high mobile data usage already, but let’s see if the other three laggard markets are elevated.