Smell the fear
Tomorrow digging begins on the FTTH project in the Dutch town of Soest, as part of the 55,000 home project from housing company Portaal. Out of 4,000 target properties in the town, 1,500 households have signed up for 10Mbps symmetrical internet, TV and VoIP for EUR50 (including VAT). So guess what happened today? Local cable incumbent Casema has radically altered pricing in the town, allowing existing CATV subs to add internet and telephony for EUR19.90 per month, bringing the total bill to EUR34.95. There are some fairly tasty comments in response to the story on WebWereld, one of which points out that a comparable package put together a la carte costs EUR78.06, and others of which question whether Casema is abusing its incumbent position and offering services below cost.
Map this development across the various parts of the Dutch market set for fiber deployment, and we get a pretty big shock to the broadband pricing environment, at least in a localized sense. This makes UnitedGlobalCom's purchase yesterday of Zone Vision look like an insurance policy. Anyone who wants to deliver channels on another platform is going to have to deal with their content arm, like it or not. Where the company's position in distribution is under attack, it at least has content to fall back on. For companies stuck in pure distribution mode, the writing is on the wall, though I have to confess to being taken aback by the rapidity of Casema in responding so quickly and dramatically to a project involving 1,500 homes, which won't even launch services until April.