Geographical Market Analysis and Selected Market Segments for a Cable Operator
Evaluated the cable TV market, pricing elasticity, and selected areas to be cabled using a business model, econometrics and Monte Carlo simulation
A very detailed and in-depth market and pricing analysis supported the CATV business strategy definition and key management decisions. The analysis proved a strict adherence to reality and was key for the fast business growth
Project and challenges
Portugal Telecom faced the risk of competition by potential Cable TV operators and needed to expand offering and capture the cable TV market quickly. As a completely new market, non existing in Portugal, it was needed an approach that could correlate other variables to TV services and identify the best pricing point. Furthermore it required a gradual fibber deployment where the best penetration rates could be achieved and value could be maximized. Also, implementing a new technology, required a precise identification of the cost variables to estimate the investment required.
The team gathered and correlated multiple variables, from the national perspective to a granularity level to predict demand and prioritize best areas for implementation. An advanced business model was created to evaluate a 10 year business plan. Monte Carlo simulation techniques where used to evaluate the impact of variables as pricing, demand, exogenous costs, and others. Econometric analysis was used to create a model and forecast main long term variables. Competitive products and services where analyzed to evaluate customer trade offs.
Results and benefits
The project generated a structured analysis that was the basis for the pricing and technology costs selection, supporting the strategy definition. A detailed deployment plan was developed to cover in a gradual approach the main cities and residential areas. Product pricing analysis supported interations with marketing teams. A 10 year business plan supported and defined the strategy, setting a long term vision. A detailed annual budget, for the first year, supported the on-going management.