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November 21st, 2008
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Tiscali eyes multimedia marketBroadband providers hope to woo customers with contentBy S. Adam Cardais Staff Writer, The Prague Post August 31st, 2005 issue Tiscali has started offering multimedia content, including movie trailers, on its Web site to encourage customers to buy high-speed broadband Internet service, which analysts call a smart move in a saturated telecom market where broadband has the most growth potential. "[Broadband] is the only thing [providers] can sell," said Tibor Bokor, an analyst at Wood & Company. "[And] the way to attract customers is not only the service, it's also the content. It's added value, and I think that's the way to go." Tiscali is an Italian Internet and telecommunications company, the Czech branch of which is one of the country's largest alternate telecom providers. The company is hoping Tiscali n-joy, which features downloadable video clips, game trailers and music free of charge, will show reluctant customers the value of broadband, which has the speed necessary to download large media files from the Internet, but has yet to catch on in the Czech Republic. Expectations of rapid growth, according to analysts, is exactly why providers such as Tiscali and Český Telecom, which began providing multimedia content on its Web site last year, are looking to promote broadband Internet. "Revenue from voice services are declining, so [providers] need to look for alternate forms of income," said Tomáš Gatěk, an analyst at Patria Finance. Right now only around 150,000 people have access to broadband, defined as at least 10 times faster than dial-up service, but analysts and telecom providers reckon this figure will grow sharply in the coming years. As proof, they cite the fact that around 30,000 people had broadband in 2004, a year-on-year increase of more than 100 percent. These numbers make broadband an attractive market in a country where 10 million people have 10.5 million mobile phone SIM cards and revenues from voice services are dropping. Indeed, dominant fixed-line provider Český Telecom's quarterly revenue from voice services, including fixed line and wireless, is dropping 30 percent year on year, according to data from Patria Finance. Gatěk said he doubts the broadband market will sustain last year's level of growth, but penetration could increase by as much as 50 percent a year. Like Bokor, he said providing customers with content that is best used with broadband is a good way to promote the service. Piracy won't be much of an issue, he added, because the ultimate goal of the service is to get customers to buy broadband, not content. "The content [providers] are the ones who need to worry about piracy," Gatěk said.
For telecom operators that do charge for multimedia content, such as Český Telecom, the service represents an additional stream of revenue. Tiscali charges 333 Kč a month for the 128 kilobyte per second connection and 1,499 Kč a month for 4,096 kilobytes per second. For its part, Tiscali has no intention of charging for the content, which doesn't represent a significant financial investment because the company used its existing team of 12 Web engineers to launch it. Tiscali n-joy could expand significantly if it proves a hit with customers, said Matthew Barrett, the company's business-to-consumer director. "It's designed to meet the needs of the growing broadband market in the Czech Republic," he said. "We want to show people what they can do with the Internet." Right now it's in the testing stage, but "if it really takes off, it could become the Tiscali portal." S. Adam Cardais can be reached at acardais@praguepost.com Other articles in Business (31/08/2005):
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