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Meet us as Broadband World Forum

19 Oct

This week, starting Tuesday 22nd of October is BBWF in Amsterdam, one of the most important events about broadband in Europe. Diffraction Analysis will of course be there in the person of CRO Benoît Felten. He will be attending from 21st to 23rd, and will be speaking/moderating on the 23rd PM at a session entitled Moving faster towards Gigabit access at home.

Should you want to meet Benoît for a chat, a briefing or just to share a drink and discuss the market, feel free to email us.

Can Iliad Succeed in the US Market?

5 Sep



A topic that I’ve been following closely over the summer despite a relatively lackluster press coverage in non-French speaking media is the attempted bid by Iliad on T-Mobile US. This is interesting to me for a number of reasons, one being that I have long spoken of the potential for an Iliad-style disruption in a number of markets (including the US), and another one being that I know Iliad well, and I know the US market reasonably well. This is really me musing on whether Iliad could make it work more than anything.

I won’t go into valuations and other financial aspects that might allow Iliad’s bid to succeed or not. My gut feeling at this stage is that with the removal of the competing Sprint bid, they are well positioned, particularly if they get a consortium of investors around them, but I’m too far removed from pure financials to have a viable view on that.

The more interesting question (to me) is, assuming the bid is successful, can the industrial project be successful? The financial markets clearly seem to think not, or at least seem to think that it’s very uncertain. Iliad’s valuation has taken a serious hit as a consequence of the bid being announced.

One thing is for sure: the initial instinct that got Niel (Iliad’s founder and CEO) interested in T-Mobile US is correct: the US market is ripe for price disruption, with ARPUS two to three times higher than European averages and there is no reasonable explanation as to why costs would be two to three times European costs in the US. Iliad successfully entered the French market as a low-price competitor by building a lean operation in an environment where margins were already much lower than in the US. The opportunity is clear.

The thing that many people don’t understand about Niel is that he’s one of those entrepreneurs who is still willing to take risks. I would actually argue that he thrives on risk. Financial and industry analysts are trying to read Iliad’s bid within the framework of industry accepted practices, but I believe that’s the wrong way to look at it, especially in the US where price competition has been very limited due to the oligopolistic nature of the market. The right way to look at it would be to try and anticipate all that an Iliad owned T-Mobile could offer end-users that nobody expects. What could they give away for free that everyone in the industry agrees has to be paid for? What could they radically simplify in terms of portfolio, distribution, etc. Which partnerships could they strike that would open up possibilities for visibility and commercial success.

This isn’t so much about replicating the French success as it is about bringing in (and hopefully transitioning the existing teams to) a radically different culture, one of lean disruptiveness. That’s what Iliad would be bringing to the table. And unlikely though it sounds, it could very well work. It’s worked in the past, multiple times. I’m not underestimating the cultural challenges here, but I do think with Niel you need to keep your mind open to the fact that his success might surprise you.

Still, the biggest challenge here is that Iliad isn’t starting from scratch. Every success of Iliad’s in the past was built from the ground up. The only failure they had to deal with was their acquisition of Telecom Italia’s French subsidiary Alice. In the case of T-Mobile, Iliad announced that $2bn of savings per year could be generated, and they may very well be right. But there’s a long way between identifying where money can be saved and actually restructuring to save it. And it’s a very different thing building a super-lean operation from a clean slate and turning an organisation with the kind of technical, organisational and cultural legacy that T-Mobile US has into a similarly lean outfit. To me that is the greatest challenge: not only in transforming the company’s culture (hard enough as it may be) but in trimming down the company to the lean operation they think they can turn it into.

Still, I hope it happens, because it’s going to be super-interesting to watch, and because I’d love to see the US incumbents quake with fear once they realize that someone is operating the same type of business they have at a fraction of the cost, and it’s working…

How much money is there in Net Discrimination?

1 Jul

One of the striking realizations of my Analyst career was when I found out that very often companies in the broadband ecosystem defend, or even lobby for positions that they assume to be in their interest for ideological reasons, but without having worked out rationally if indeed they are. I have many an anecdote about crestfallen faces when real numbers are worked out and exposed.

And in fact, this has long informed my own approach to research: the idea is, based (ideally) on hard data or failing that on documented modeling, to assess whether a policy position actually makes sense or delivers what it’s supposed to deliver. This was the genesis of our short report Net Discrimination Won’t Buy You Next-Generation Access (still available, dirt cheap) in which we modeled a top-down revenue share between OSPs and ISPs to figure out the financial impact it would have. Long story short: not a lot, and certainly not enough to shift the lines in terms of network investment (as often argued by ISPs).

Fellow analyst and provocative thinker Dean Bubley has just gone one step further in what I consider to be a groundbreaking piece of analysis entitled Non Neutral Mobile Broadband Business Models. In this report, Dean doesn’t look at the classic arguments for or against net discrimination, he examines in-depth which business models net discrimination would enable and how much revenue they might generate.

You can get a feel for the material that’s in that report through the following presentation he’s made available on Slideshare:

The report is thorough, very well documented and enlightening. A highly recommended read.

Photo (cc) by Tax Credits

Rescheduled Webinar on Swedish Broadband Consumers

17 Apr

The webinar that was scheduled this week on the Swedish Broadband Consumer study ran with the FTTH Council Europe had to be postponed due to a platform failure outside of our control. We apologise for those who waited in vain until we figured out we couldn’t go forward.

Everything is fixed now, so we are rescheduling the webinar to April 24th (next Thursday) at 3PM CET. For details on the content see here and also this interview from the FTTH Council Europe conference (starts at 37:30).

Registration is here!

Spread the word!

Free Webinar on Swedish Broadband Consumer Study

10 Apr

The FTTH Council Europe and Diffraction Analysis are running a free webinar on April 15th at 11 AM Central European Time. Benoît Felten and Joeri van Bogart will present and discuss the results of the quantitative study entitled Why Consumers Love FTTH – The FTTH Consumer Experience Study. Here are some of the one-line results from this study:

• In Sweden a huge majority FTTH users (75%) think their broadband is better than before they had fibre.
• 67% of Swedish broadband users think broadband over fibre is ‘Very Good’, but only 13% think the same of DSL.
• Swedish FTTH subscribers use video-communication over the Internet five times as much (25%) as DSL users.
• In Sweden 59% of FTTH users see FTTH as modern. Only 17% of DSL users see DSL as modern.
• In Sweden, 34% of FTTH users are 4Play or 3Play customers vs. only 23% for DSL users.
• In Sweden 59% of FTTH users think fibre broadband is sustainable. Only 44% of DSL users think the same of DSL.
• In Sweden, 59% of DSL users find their broadband price excessive vs. only 32% for FTTH users.
• For FTTH users in Sweden, quality of broadband is the 1st criterion after home price when choosing a new home.
• Close to half of Swedish FTTH users (45%) are Very Satisfied with their broadband vs. only 28% of DSL users.

During this session, we will discuss all of these results and much much more. Please join us by registering on the following address:

Diffraction Analysis at Broadband Communities

26 Mar

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The Broadband Communities Summit is probably the most exciting broadband event in the US. It’s not one of those corporate events built by and for industry sponsors, it’s an event run by the good people at Broadband Communities magazine and focuses on sharing experiences so that communities who have managed to develop (directly or indirectly) good broadband can share that experience back with those who are looking into these issues. And of course it doesn’t stop there, look at that agenda!

So we’re very pleased to say that not only will Diffraction Analysis be there, but CEO Benoît Felten will be speaking at the event during the Cornerstone Awards Luncheon on Wednesday April 9th. Diffraction Analysis customers and followers can attend the whole event at a steep discount (over 50%) by selecting the first button (CODE HOLDERS) on the registration page and entering the code SPKR14.

Benoît would also like to propose to attendees who are interested in discussing industry trends, best practices in broadband deployment or specific issues / pain points they may have related to operational issues some one on one sessions during the event. Please feel free to contact us by email to organize this if you’re interested.

See you in Austin!

Exciting Stuff at the FTTH Council Europe Conference in Stockholm

4 Feb


Like every year, Diffraction Analysis is an analyst partner of the FTTH Council Europe annual conference which this year takes place in Stockholm on February 19-20th with pre-conference workshops on the 18th.

This year is particularly exciting for us because we will finally be able to show results from a very exciting quantitative study of broadband users in Sweden. We think these figures could significantly change some of the perceptions around the potential of FTTH. These results will be presented during Session 15 of the Conference on the FTTH Business Case:

Session 15: February 20th, 14:15, Room B

You will not want to miss that, sorry for insisting!

Benoît Felten will be there during the whole week of the conference from Feb 17-21st. He will be manning the Diffraction Analysis booth when not otherwise engaged. The booth is in the Analyst Corner section of the exhibition floor. Should you want to meet with Benoît for a briefing, expert opinion or to discuss business opportunities, please get in touch!

In addition, Benoît will be speaking at a number of workshops and events throughout the week:

  • Tuesday 18th AM – Huawei Customer Event
    Speech: 5 ways to supercharge your FTTP Business Case
  • Tueday 18th PM – Investor Day
    Panel Moderation
  • Tuesday 18th PM – World of Applications Workshop
    Speech: FTTP Usage Trends

Diffraction Analysis and Fiberevolution will be tweeting teasers from our study results starting tomorrow and all the way leading up to the conference. Please spread these around if you find them interesting!

Is Turnbull planning to turn the NBN over to Telstra ?

23 Sep

A few months ago, when the coalition’s plans for the Australian NBN were announced, I wrote the following in an article on Telecom TV:

The core of Labor’s NBN plan though, which is the structural separation of networks and the equal access to a regulated wholesale platform, is retained [by the Coalition]. By staying on board with that the Coalition offers a plan that is within the continuity of what has been done. 

A couple of announcements today however got me to reconsider that:

  • first we learned that Telstra is trialing VDSL Vectoring with the avowed aim of bidding for the NBN build-out. In any other market, the idea that the service arm of the structurally separated incumbent would bid to build the network of the infrastructure arm would be outrageous to say the least but not in Australia, it seems. More worrying are Turnbull’s statements prior to the election on the issue, according to AFR: “Mr Turnbull said in the weeks leading up to the election it was “bizarre” Telstra had been left out of the construction project and it would be good to get the company more involved in the Coalition’s roll-out.” That sure sounds like a fair and equal assessment of sub-contractors is the most likely scenario… not?
  • second, we learned that the entire board of the NBN offered its resignation and that (according to “Mr Turnbull said after the election that former Telstra boss Ziggy Switkowski would be well qualified for the role of NBN Co chairman.

So in summary, the minister favors Telstra to build the NBN and an ex-Telstra CEO to head the NBN. Which makes the NBN look suspsciously like Telstra.

I have to confess I hadn’t seen this coming, but sadly I now have to say that, conspiracy theories aside, it looks like structural separation is dead as a Dodo…


Photo Credits: Eva Rinaldi

Can the Australian Fiber NBN be radically redesigned?

26 Aug

To say that everything surrounding the Australian NBN is a political can of worms would be an understatement. The general elections in a few weeks, with Labor trailing in the polls, may spell if not the doom at least a radical trimming of NBN’s ambitions. In this context, I stumbled upon this interesting presentation by Simon Hackett entitled Building a Fiber NBN on a Copper Budget. I don’t know who Simon Hackett is, and if he is politically motivated (it seems like everybody is, looking from the outside), and more importantly perhaps, I haven’t done the financial analysis that would allow to assess whether his opening statement is correct.

What’s more interesting to me in this context is that he suggests some interesting ways in which a wholesaler can lower his own investment costs. In a nutshell, he offers three paths (not competing, complementary):

  • Forget about QoS: basically, he argues that bandwidth trumps QoS, and since fiber offers virtually unlimited bandwidth, the complexities and costs of QoS management and more importantly QoS wholesaling should be avoided. I don’t disagree on principle with this one, although the confines of QoS should probably be better defined, but I’m assuming he means “different grades of traffic management”.
  • Drop PSTN (and multiple VLAN capability): Simon’s point is that PSTN is dying and shouldn’t be carried over to the NBN. I agree with him 100% on that one although I’m pretty sure the regulator imposed PSTN continuation to the NBN anyway. But honestly, any fiber deployment done today should have two aspects embedded into its DNA: eliminate copper (long term) and eliminate legacy systems. Not sure I’m quite as bullish on eliminating the ability to deliver separate VLANs. Some services, especially around home security, healthcare, etc. are going to require a fully separated path for security reasons, and until that can be done over WDM, VLANs seem to me to be the only way to go.
  • Let the ISPs pay for the ONT: that’s the most intriguing of Simon’s suggestions. Instead of imposing an ONT paid for by the NBN, he says, the set-up should assume that the ISPs will install the ONT since they will want to install some equipment inside the home anyway. On paper this looks very tempting and financially it could represent significant savings for sure, but I’m concerned this simply couldn’t work for a simple reason: first, unless the NBN forced a vendor onto the ISPs, which seems unlikely to be approved, I’d have serious misgivings about interoperability of the ONTs. This has been a known issue with GPON for a long time and while various vendors have spoken about furthering interoperability in the standards, letting the ISPs pick their ONT vendors would still be a huge leap of faith.


Still, these are some interesting ideas, and at least it’s good that they’re being asked. I’m assuming in saying that there is no political calculation behind them. In which I may very well be wrong.

Still, if Simon Hackett can convince Malcolm Trunbull that he can get a fiber network for the cost of a copper one the Coalition should be trumpeting that left, right and center!

Gigabit Musings

21 Jun

Just a quick note to point out two recent articles on gigabit broadband.

Despite similarities in theme, the two are very different and address different facets of a same issue.