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Summary

Iliad (called "Free" in France) was one of the pioneers of the triple-play bundle, but today finds itself under intense competitive pressure and has seen a decline in both broadband subscriptions and market share for the past three quarters. To try to restore its fortunes, Iliad has launched two new triple-play offers based on new digital home hardware: the Freebox One and its premium product, Freebox Delta. The latter is based around a gateway/media player combo that goes way beyond the standard home router/TV set-top box, and indeed Ovum would say is one of the most advanced telco-supplied digital home setups currently on the market. It costs roughly €20 per month more than the standard triple-play package in France but is designed for the premium end of the market, and in order to wow such customers, Iliad has certainly not held back on the service and technology features.

Freebox Delta is more than just a new home gateway

Iliad accurately describes Freebox Delta as a "mind-blowing fusion of technologies." Indeed, Freebox Delta has so many service and technology features that it takes quite a long time to fully understand exactly what it is. Is it an ultra-fast broadband service, a video media device, a smart speaker, a smart home product, a home gateway? The answer: it is all of these things and more.

In terms of hardware, Freebox Delta comes with two CPEs: the home gateway and (with additional cost) the Free Devialet Player, which includes Devialet's audio technology and an exterior designed by Jasper Morrison. The gateway device can either connect to optical fiber, delivering speeds of 10Gbps, or can bond together xDSL and 4G to deliver up to 200Mbps. The device also includes Sigfox connectivity to enable access to critical features during a power cut or loss of broadband access. Inside the home, it utilizes 802.11ac tri-band Wi-Fi technology (capable of up to 4.4Gbps) and in addition includes a 1TB NAS server, an integrated DECT base station, and two free power line connectors to connect peripheral devices.

The Free Devialet Player is a combined media device and smart speaker capable of playing high-quality audio and acting as a surround-sound system for video. The device comes with a remote control but is also capable of voice control through integration with Amazon Alexa as well as Free's own voice assistant (OK Freebox). From a TV standpoint, the device is a 4K HDR player, providing access to Canal TV content and Netflix as well as to OTT video applications. But it doesn't stop there. Freebox Delta is also a smart home security system and is Somfy and Philips Hue compliant.

Iliad claims that if the consumer were to purchase all these services and devices separately, they would be looking at a monthly fee of over €100 per month and an upfront cost of over €2,400. Iliad's monthly price is €49.99, with either an additional €10 per month or €480 upfront for the Free Devialet Player. However, with the Free Devialet Player rental fee, that is €13 more than Orange's 1Gbps triple-play service and €18 more than its 300Mbps triple-play service (after a 12-month discount period). So the question is: will Iliad's top-end consumers pay extra for such a premium product? Certainly broadband differentiation is now firmly about quality of experience, and Freebox Delta ticks a lot of service and technology feature boxes. Success for Iliad therefore could rest on its ability to clearly market all those features in a way that mass-market consumers can fully understand.

Appendix

Further reading

Developing Business Strategies for a Smart Wi-Fi Gateway, CES006-000008 (February 2018)

2019 Trends to Watch: Smart Home, CES006-000037 (September 2018)

Consumer Broadband Subscription and Revenue Forecast: 2018–23, CES005-000025 (December 2018)

Connected-Home Case Study: Calix integrates home Wi-Fi and IoT services onto an open platform, CES006-000050 (December 2018)

"Broadband service providers must protect their role in home Wi-Fi," CES006-000047 (October 2018)

Author

Michael Philpott, Senior Practice Leader, Consumer Services

michael.philpott@ovum.com

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