12.00 Update: Holland’s largest cable operator Ziggo has said that the price for third party resellers will be €11.05 per month. With such pricing, competition will virtually be impossible for newcomers.
Ziggo calculated the cost down from its own retail price of €16.2 (€13.66 without VAT). Subtracting the costs of content – including authors’ rights (€1.29), the transmission costs of digital channels (€0.61), and the retail costs per subscriber, including marketing, call centre (€0.71), the operator said the price will be €11.05.
Ziggo claimed it used the calculation method prescribed by OPTA to come to this amount. Earlier, YouCa chairman Peter Jelgersma said that a wholesale price of around €4.00 would be in order.
Meanwhile UPC has also issued a statement about the resale price of their analogue TV product: “The resale rate is based on the system – as prescribed by OPTA – a ‘retail minus’ rate of around €12. According to OPTA, this system required an amount excluding VAT and excluding costs of acquiring content . An external auditor has validated the price. ”
With the prices as set by Ziggo and UPC, it will be very difficult if not impossible for third parties to build a business case. The newcomers not only have to build their own back office, but also have to come to agreements with all channels that are available in the analogue tier. This will include payments to be made to the various channels.
Following a ruling by telecoms regulator OPTA, UPC and Ziggo have to allow third parties access to their networks in order to be able to sell analogue television subscriptions. The regulator argued that by opening up the analogue parts of the cable networks, television subscriptions would become cheaper.
With the pricing model as proposed by the two cablers, this will certainly not be possible. It is interesting to note that both Ziggo and UPC claim it had used the pricing method as proposed by OPTA.
The IPTV provider Tele2 and newcomer YouCa have already expressed interest, as have the independent telecoms company Scarlet and Online, the Dutch broadband subsidiary of Deutsche Telekom.