BBWF Day One: The only way is up?

Olivier Baujard, CTO of Deutsche Telekom said from the stage this morning that in his view, “the propensity for customers to spend is still increasing”. This is from a converged operator which has of course seen mobile ARPU decline and pressure on fixed broadband ARPU to travel in the same direction.

The implication here is that by providing customers with more value, ARPU can at least be sustained, if not grown now that high speed broadband services will become more widely available in Germany and across DT’s European footprint.

There were hopeful nods of agreement from many in the auditorium, but I wonder if the obvious point was missed? I apologise now for not having asked the question at the time (I was the session chairman) but whilst sustaining or even growing ARPU is theoretically possible, sustaining or growing EBITDA margins is unlikely without slashing cost.

The opex benefits of FTTH roll out are a few years away. Futhermore, given that there was an extremely well attended session called “DSL Acceleration”, the copper network is not going anywhere for some time yet. In that session, Dr. Ralph Leppla (also of DT), in answer to the question “in 10 years what will be the average speed of DSL”, gave the answer “10Mbps”. The implication here is that a) DT will still be providing DSL and b) that average speeds won’t be much higher than they are now.

A dose of realism on the opening day!

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