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On March 3, 2005, competitive local exchange carrier (CLEC) Maxcom and local cable company Sistemas Interactivos de Telecomunicaciones (SIT) launched a triple play solution in Mexico after they signed an alliance to begin offering a bundle of switched voice, Internet and Pay-TV services. Although Maxcom is planning to partner with other cable companies to offer triple play in more cities throughout Mexico, at the present time, this solution is only available in Queretaro, one of the country’s most vibrant secondary cities.
Due to regulatory constraints, voice and cable operators cannot offer a traditional triple play, and must form strategic partnerships with each other to bring a hybrid triple play offering to market. Both cable and voice providers would prefer the ability to provide all three bundled services independently, but the regulatory environment is unlikely to change because policymaking will tighten in the run up to the presidential election. Pyramid Research analyst Vanessa Larez predicts that “Voice and cable operators will sign agreements with increasing frequency over the next year to avoid a late market entrance and lost opportunity.”
With the wider availability of service packages, Larez expects “A fiercely competitive landscape in the Mexican market as new types of bundled solutions give operators a differentiation advantage.” By providing services on a bundled basis, operators hope to reduce subscriber churn and to increase average revenue per subscriber (ARPS). The triple play approach has worked relatively well for operators around the world. For Maxcom, triple play is an important differentiation strategy that will help attract new clients, but as other joint ventures follow its lead, the long-term competitive advantage will wane. Chile’s VTR has been the triple play poster child and achieved success in the Latin American market by leveraging its bundled offerings to grow revenues as well as EBITDA.
Related Research:
Demystifying Triple Play
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