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Report: FTTP Dynamics in a mature market – a quantitative analysis of Swedish broadband user behaviour

14 Jan

FTTP Dynamics Thumbnail (Small)Our latest report is out with the new year, entitled FTTP Dynamics in a mature market – a quantitative analysis of Swedish broadband user behaviour. It’s the first ever (as far as we’re aware) comparative survey of FTTP and DSL broadband users looking into usage, attitudes and perception of broadband solutions.

This survey focuses on Sweden and was undertaken in collaboration with the FTTH Council Europe. It focuses on the most mature market in Europe, Sweden, but is part of a broader piece of work with annual surveys covering various European countries where FTTP is in deployment. Two more surveys have just been finalized in France and Portugal, initial results of which will be presented at the FTTH Council Europe Annual Conference in Warsaw on February 12th.

There are a number of key findings in this report (both for fiber broadband operators and for policy makers) that highlight how a market’s fiber maturity affects usage and perception. This is (in our opinion) a must read for any operator active in markets where FTTP is being deployed and commercialized. You can purchase the report via Paypal using the following buttons or contact us for other payment methods. We reproduce the executive summary in full below.

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Executive Summary

Quantitative examination of the Swedish broadband market yields insight that will likely apply to less mature markets as they progress towards more fiber broadband. Comparing Fiber to the Premise (FTTP) and Digital Subscriber Line (DSL) user attitudes and behavior shows the clear appeal of the fiber platform across the market and the high quality image associated with FTTP.

This image of quality does not however translate as much as might be expected into migration intentions from DSL to FTTP, mostly because many frustrated DSL customers have no fiber platform to migrate to where they live. FTTP users on the other hand still envisage upgrades to faster broadband, and while over a third of Swedish FTTP users are on speeds of over 100Mbps, the appetite for upgrades remains strong.

FTTP subscribers are clearly more inclined to use their Internet at home with time actively spent online being 30% higher for FTTP users compared to DSL users. Additionally, FTTP users tend to use niche or cutting edge services more frequently, and express more interest in ‘future’ service concepts such as medical monitoring at home, live tuition at home or TV-centric video-conferencing. Amongst FTTP users, those who are ‘very satisfied’ with their broadband solution are even more inclined to be express interest.

Exhibit 1

Since these concepts represent the potential for cross-selling into new types of subscription based services, ISPs have a clear opportunity – if they nurture quality of experience for FTTP users – to develop new revenue streams. In summary, as shown in Exhibit 1 above, there are three virtuous circles at play amongst Swedish broadband users:
• FTTP users are still eager to upgrade their broadband: this is an upsell opportunity that may lead to increased ARPUs on fiber over time,
• a large proportion of DSL users are frustrated by their inability to migrate to fiber because the platform isn’t available where they live: this is makes the business model of expanding fiber networks easier as demand will be stronger from day one,
• FTTP users are more willing to experiment with new service concepts: this is a cross-sell opportunity for service providers if they play their cards well and keep user satisfaction high.

Tapping into these opportunities remains challenging: while the better quality of experience is clearly perceived by FTTP users (even down to specific technical features like low latency or high upload speeds), DSL users still need some convincing and tend not to attach as much importance to their broadband solution as FTTP users. Furthermore, cross-sell opportunities require entering new markets (healthcare, home security, etc.) and taking risks. Still the opportunity exists, and ISPs can play a role in these if they don’t hesitate too long.

How these trends will replicate in less mature markets is a key question. Initial results from two upcoming identical surveys ran in France and Portugal by Diffraction Analysis in collaboration with the FTTH Council Europe suggest that perception of FTTP quality is strong from day one, even in less mature markets, but the appeal of FTTP for DSL users is lower as the market as a whole does not perceive the platform to be superior.

To purchase this report, select a licence type and press “Buy Now”. 


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One Leg in Europe, One Leg in Asia

20 Jun

The Two Towers

As some of you may have heard on the grapevine already, I am moving to Asia over the summer. More specifically, Shanghai. I am moving for family-related reasons, but I am very excited about the opportunities this move represents for me professionally.

First of all, I should reassure the friends, colleagues and customers in Europe that have been kind enough to trust my company Diffraction Analysis to assist them with their various needs for insight in the last years: we will continue to do so.

I’m not turning my back on Europe, far from it: there are many valuable projects, companies and initiatives here that are examples for the rest of the world and we will keep looking for them, analyzing them and meeting with their representatives. I will personally be traveling back to Europe on a regular basis to connect with customers, prospects, policy makers and more generally anyone in the broadband and telecom ecosystem worth talking to.

I see moving to Asia as an opportunity to broaden our understanding of best in class companies and policies. I think that the Asian NGA story has yet to be told ; I keep hearing partial analysis or misplaced examples that simply aren’t enough to understand how countries that are 10 years ahead of Europe in infrastructure deployment have evolved and what that means for Europe and the US.

So part of the opportunity for me will be in being really close to two key markets, Japan and South Korea that I will strive to understand more thoroughly. Of course, proximity to Hong-Kong, Singapore and Malaysia will also be opportunities for better insight as well. Here are some of the questions that are already on my curiosity list:

  • why is NTT changing its corporate structure now (and only now) and how does it affected the growth of Japanese next-generation broadband (or lack thereof)?
  • how much profit (if any) have the Korean broadband operators made with fiber, and assuming (as its often told in the West) that they didn’t make profit, how much has the rest of the Korean IT economy benefited from highly adopted ultra-fast broadband?
  • is Singapore turning into the footprint for a Smart City built from the ground up, with infrastructure as an enabler as opposed to a constraint? Also, what are the impacts of a three-tier market model (infra, wholesale, retail) on Smart City initiatives?
  • is Malaysia paving the way for emerging market connectivity, demonstrating the value of mass deployed fiber for economic development?

There are many more fascinating stories to be told, around what’s happening in Indonesia, the turmoils of the Australian NBN, and of course the Chinese fiber story itself, and I hope to have the opportunity to tell all of these stories once I’m there.

So if you’ve been following me from Europe or the US, rest assured that it’s not the end of the story by a long stretch: it’s a new chapter, richer in meaningful examples and useful insight. And I’ve you’ve been following me from Asia, please ping me: I’ll be there full-time from August and expect to be fully operational by September.

White Paper: Connectivity Models for Developing Economies

3 Mar

ConnectivityThumbThere are recurring misconceptions about broadband in emerging markets. These are considered “truths” and repeated in newspaper articles and at telecom events. For example:

  • “There’s no space for wireline services in developing economies!”
  • “FTTH in emerging markets? You’ve got to be joking!”
  • “There will never be a way to deliver mobile services outside of urban areas in these markets!”

But the urban mobile model that is often described is not a universal truth, far from it. A few months ago the Google policy team contacted Diffraction Analysis and asked us to analyze alternative connectivity models were and how they worked. The result is this white paper entitled Connectivity Models for Developing Economies. In this paper we examine a number of cases that do not conform to the “standard” model being displayed for developing economies. We also examine policy approaches that seem to have made a measurable difference.

This paper does not offer a silver bullet solution for all developing economies: there’s no such thing. It does however analyse interesting case studies and looks at the replicable aspects of some of these models.

You can find the paper on SSRN through the following link: Connectivity Models for Developing Economies.

FTTH Council Europe 2014: less gloom, more pragmatism

24 Feb

Stockholm in Winter

Last week I was in Stockholm all week for the 2014 edition of the FTTH Council Europe’s annual conference. It was a very good week for me (though sleep deprivation nearly got me in the end) with lots of great meetings with customers, potential customers, fellow analysts / consultants and friends. I’m not going to write a long analysis of the event (got to catch up on the million things I couldn’t get done while there) but here’s a set bullet points that summarize my feelings about it:

  • the atmosphere at the event was miles better than last year. Much more positive, better interaction, better content (at least for the little I got to attend),
  • the Council, while not endorsing VDSL in any form seems a little more relaxed around the idea that there are alternatives that make more sense for some players in some situations. It’s a good thing: more pragmatism cannot hurt the industry,
  • key finding: the second wave of FTTH deployment in Sweden is happening under a totally different model; Skanova’s CEO stated that customers were willing to pay 2000€ to get their connection installed, which would pay for most of the up-front cost,
  • the above statement didn’t surprise me as much as it could have: in between the results of our qualitative study on real-estate last year (and some follow-up work I’ll talk to you about soon) and the quantitative study on attitudes, usage and satisfaction this year, it’s quite obvious to me that most Swedes know that fibering up your home is a sound investment that also delivers great quality services (or the other way around),
  • said quantitative study was very well received, and exposes what I believe to be the first ever usage & attitudes analysis of FTTH users in a mature market (Sweden in this case). Hopefully there will be other iterations in other countries,
  • key finding: there is a third (besides Andorra Telecom and Jersey Telecom) that is doing fiber/copper substitution, on a much larger scale. It’s Telekom Indonesia, and their plans are quite advanced, targeting millions of users. Will need to investigate that one more fully,
  • key finding: Mobiliy (Saudi Arabia) is really one of the most interesting FTTH operators, very smart in its approach. I knew this from their technical operations, but their marketing operations are just as smart,
  • there’s a quasi-religious zeal in the promotion of the Swedish Open Access Model in some parts of the market there. I’ve long been aware that the model is not as widespread as it’s advertised to be, and has some deleterious side-effects on the industry, so tread with caution and don’t buy (all) the hype. It’s worked for Sweden (at some cost) but isn’t necessarily the best way to implement Open Access in my opinion,
  • key finding: TWDM is a damn interesting technology, especially in its regulatory implications. Another thing I need to dig into deeper,
  • finally, there was one thing that puzzled me deeply, and that is the Operator Award received by Vodafone. Sure, they have some FTTH in Portugal, and might have a bit in Spain soon, but for a player their size, they’re not exactly commited to the technology. Maybe it’s like Obama’s Nobel Peace Price. Let’s hope it works better…

Thanks to all of you who came by the Diffraction Analysis booth to chat or discuss collaboration. Kudos to the FTTH Council who pulled (in my opinion) the best annual conference of those I’ve attended to far. See you next year in Warsaw!

FTTH Benefits for Real-Estate Webinar Replay

24 Apr

The replay for the FTTH Benefits for Real-Estate Webinar is up on Vimeo. You can find it here:

Video Webinar 18 April 2013 – The Positive Effects of FTTH for Real Estate Projects from paftthcouncileu on Vimeo.

I’ve also uploaded the slides on slideshare if you’re interested, they’re here.

All Diffraction Analysis Reports Half-Price (or More)!

25 Feb

Last week I received the FTTH Council Europe Indivudual Award for outstanding contribution to the Industry (in case you didn’t already know) so to celebrate the occasion I decided to put all of our previously released reports at half-price or more for the next two weeks. You can find details on the operation here.

Here are the reports affected by the promotion:

I hope you will help me spread the word!

Roaring start to the New Year

8 Jan

Rainbow Fiber Paths (CC-BY-NC-SA Ben Felten)

We’re only a week into 2013 and already there’s more topics to cover than I can conceivably talk about. And I’m not even attending CES!!!

So we’ll be talking about many things this week, between Free’s crazy attempt at arm-wrestling Google, Israel’s electricity company going forward with national FTTH plans and Cisco finally dropping the gorgeously doomed Umi.

Meanwhile, I wanted to point you to Diffraction Analysis’ new year post, which highlights some of the things you can expect from the company in the first few months of the year.

I wanted to give you a little present as well.

On the personal side of my life last year, I worked a lot on my photography skills, and one of the things I always wanted to be able to shoot well was Fiber Optic Lights. I’ve gotten decent at it (I think), and I thought I’d share the joy around by releasing 42 of my best Fiber Optic shots as Creative Commons photos. These photos are all CC-BY-NC-SA which means in a nutshell that you can alter them as long as you reshare them, and you can use them in any non-commercial context which (in my book) includes blogging and powerpoint presentations. I hope it’s useful to you all. The individual photos can all be found here, but to make life easy for everyone, I set them all up in a pinboard so you can pick and choose.

If you want to use the photos in a commercial context, please get in touch.

Also, they can all be purchased as prints which I’m sure would look great in any FTTx exec’s office!

Happy New Year to you all, here’s hoping we’ll meet face to face!

Diffraction Analysis in Wired Business

3 Oct

An article in Wired Business written by Susan Crawford and published on Oct. 2nd (entitled We Can’t All Be in Google’s Kansas: A Plan for Winning the Bandwidth Race) mentions Diffraction Analysis’ New Zealand study and highlights the positive aspects of the New Zealand NGA model. Most importantly, Susan Crawford points to the core differentiator of the NZ model: that public money should alleviate the deployment risks, particularly take-up risk. Our report is still available for purchase!

White Paper: In-depth examination of Stokab

2 Oct

Stokab has become one of these landmark municipal broadband projects that many people quote and talk about but that until now had never really been studied in depth. A few months ago, Google approached us and asked if we would undertake such a study with their sponshorship and publish the results. The ideas was not to present the project as anything it isn’t and neither was it to push for its replication, the idea was to look dispassionately at how Stokab got where it is, the benefits that the City of Stockholm derives from Stokab and to examine how the project might realistically be replicated and by whom.

The paper, entitled Stockholm’s Stokab: A Blueprint for Ubiquitous Fiber Connectivity? is now available on SSRN. It’s an in-depth 15 page read and examines all the issues above and more. In particular, it highlights the financial aspects of the Stokab story: where did the money come from, how did the structure fare in the early years, etc. In case that wasn’t made clear, it’s available to all who want to download it. I would be very curious to have feedback from people interested in discussing its contents.

Successful FTTH Service Strategies Replay

20 Jul

The replay for the webinar Benoît Felten led for the FTTH Council Europe on Service Strategies in May is available on replay on Vimeo.

It’s embedded here. It contains a number of key data points for network providers looking at FTTH investment and policy makers wanting to unravel fact from propaganda.