![](/images/new-backgrounds/1184512/18451211x1.webp)
The Profitability Factor
An improved regulatory environment and the clear potential for incremental revenue have convinced many incumbent service providers to rapidly make considerable investments in new service delivery infrastructures. By adding video, voice and managed data services to their existing high- speed data and Internet service lineups, service providers can improve their competitive position in the market.
All service providers competing in this market are faced with the challenging task of offering a compelling value proposition for their service offerings in order to achieve and maintain a high average revenue per user (ARPU) and to sustain the
For service providers who successfully meet this challenge, benefits will include the ability to:
•Successfully sell new, higher value services to their established customer base
•Leverage their brand equity to offer high- margin bundles and minimize churn
•Progressively build their service infrastructures around profitability models, as opposed to network or infrastructure constraints
•Consolidate multiple specialized networks into a
Figure 2 - Projected ARPU for Various Triple-Play Services
ARPU (in U.S. Dollars)
200 |
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| DVR |
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150 |
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| VoD |
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| Premium Video |
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100 |
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| Digital Video |
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| Basic Video |
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50 |
| Broadband | |
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0 |
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Voice | Voice, | ||
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Only | and Data | Video | |
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| and Data |
Source: The Yankee Group, 2004