The Future of the Service Provider: How to Respond to Low-cost Challengers

"The US fixed broadband market would shrink by over USD40 billion if broadband ARPU fell to European levels (not an unrealistic proposition)."

The long-term network strategy for most operators in high-income countries is largely decided, with a mix of fibre for fixed networks and 4G/5G for mobile. This common network strategy means that service providers rarely compete on their network coverage or quality (because most networks offer similar performance). Far more emphasis is on the different types of offering, and it is unclear which will be most successful in the long term.

One significant catalyst to this change in emphasis is the rise of low-cost players, most obviously Iliad and Digi, as well as many local fibre players.

This report explores the model of players such as Iliad and Digi and analyses four possible ways in which other operators can respond to them.

Questions answered in this report:

• What are the possible future differentiators for consumer services providers?
• How can premium operators continue to justify higher prices than their low-cost competitors?
• What does the future of the service provider look like?
• Does the future belong to Digi?