Fiberevolution

It’s not every day I see comedy that not only mentions but actually addresses fiber related topics, so I’m not going to let this one pass!

This is the fabled Australian comic duo Clarke and Dawe on the Opposition’s NBN plan.

One of my greatest frustration is not being able to get fiber to my home (yet). According to their customer service, SFR tells me that I should be eligible within 3 to 6 months, but I’ll believe it when I see it.

Meanwhile, I was venting that frustration last night playing around with Phoster, a neat poster app on the ipad, and I produced the following poster.

I shared it on twitter and some people asked for a broader share of it. So there you are! If you want fibre too, feel free to use it and share it around (a little credit and ping back to www.fiberevolution.com would be appreciated) !

Someone hinted at me recently that one of the reasons Google didn’t want to invest in peering / transit in France – leading to some of the disagreements on who should bare the cost of it as currently investigated by French regulator ARCEP – was that establishing more technical presence in a market would force them to shift the status of their local representations and jeopardize their complex tax evasion mechanism.

I don’t know if that’s true, and I don’t quite see how I could verify that. But in light of the complex profit shifting operations that Google has been undertaking for years to minimze their tax burden, it certainly rings true.

I’ve wanted to write about this for a while now, but always wondered if I’d be too borderline political. I think that the kind of tax mechanisms that Google (and others, especially in the tech business) are implementing are immoral and frankly despicable.

Apparently I’m not the only one as Guy Daniels in on the same line in yesterday’s Telecom TV editorial entitled Google “can make money without doing evil” (as it evades $2bn in taxes). He expresses my thoughts way better than I would do myself. Telecom TV’s Editor in Chief Martyn Warwick reacts today to Eric Schmidt’s shameless dismissal as published in the US press yesterday in much the same direction in Google and Tax: How to Lose Friends and Alienate People.

The questions I’m left with are:

• how much does this actually affect Google’s industrial strategy as hinted by my mysterious source above?

• considering how dependant on Google I and many many others are, how do I express my displeasure at the company? It’s not quite as easy as buying coffee from an outlet that doesn’t sell in venti sizes. Shifting webmails is not an option, but I guess using a different default search engine might be.

Which one do you recommend?

The internet is disrupting so many established businesses that it’s sometimes hard to pull all of the threads together to get a good grasp of where things are going. I was recently pointed to this recent slide deck published by Business Insider entitled the Future of Digital. It’s not without its flaws (too US-centric, some of the data layouts questionable), but it’s the best attempt at pulling it all together I’ve seen so far. I strongly recommend reading it. I extracted one slide from it last week in my post on delinearization. Here’s another slide that got me pondering…

I’ve spoken recently about the cabinets issues that Openreach faced in the UK and AT&T in the US. New Zealand Infrastructure Incumbent Chorus, while deploying admittedly smaller cabinets has devised a clever way to not only avoid some of these issues with local residents but perhaps draw attention to the deployment of fiber in a positive way by asking well-known artists to decorate the cabinets. Embracing street art as a way to make your infrastructure components blend in is, I think, pretty clever!

You can see a gallery of these decorated cabinets here.

Samsung has a new advert to highlight the NFC capability of their latest Galaxy phone.

It allows you to easily share videos between phones (over wi-fi).

All kinds of videos…

In my spare time I’ve started to work on photos of fiber optic lights again. This morning I published this one which I quite like. Tell me what you think.

If you have an account of 500px, I would much appreciate a vote and a favorite on this one, it would help give it more visibility!

Blue Fiber Nebula by Benoît Felten

Fiberevolution is a little over 5 years old, and I felt it was due for a cosmetic rehaul. My goal was to keep the simplicity and sparseness, eliminate some of the clutter that had accumulated over time and facilitate finding older content. The migration process meant I had to lay low and not write for the last couple of week, but things are coming back with a big blog post tomorrow of the killer app for FTTH!

Please let me know how things look on your side, tell me what you like, don’t like, if you experience glitches, etc. I’d be particularly interested in hearing back on RSS feeds, both for those subscribed by email and for those who use RSS readers.

Bill Schrier (@billschrier) posted the following photo on twitter.

I have long been saying that real-estate in general and temporary accomodation in particular hadn't grasped the commercial potential of next-generation connectivity. Mark my words though, we will see such adverts soon enough…

The French media have been abuzz since Tuesday following the press conference by Iliad's Xavier Niel on the launch of Free's Mobile offering. Mobile may not be the core topic for this blog but since I talked a lot about Free in the past and certain aspects of their business model and since I will soon be writing about their fiber fiasco, it made sense to lay the groundwork for a broader reflexion on disruptive business models while it's hot.

I won't go in any great detail on the announcement itself and Free's offers, you can find context about it in English easily if you google it up. Om Malik has a general context article (he met with Niel before the release, so it's not specific, but it's a good primer) and The Guardian has an article that describes in broad terms the offering they have launched.

What interests me is the answer to two questions, essentially:

• how much is Iliad moving outside of its proven model with this launch?
• how much of a revolution is this really?

The first question might sound odd, but in my opinion it's really important for two reasons. First because Iliad has made its mark in France and beyond with a very specific and counter-intuitive model that has proven it works. Second because they have shown in the past, especially with their FTTH initiative that they can fail when they move too far out of their model.

The second question is a broader reflection on the French market and how much disruption this launch is likely to generate.

A partial extension of the Free model

If I had to summarize in three bullet points the specifics of Free's offerings so far and why they were successful, I would say this:

• simple offers with few options to maximise legibility for customers
• aggressive prices that appeal to people on a budget or casual users
• rich bundles with innovative services that appeal to geeks and push new usages amongst the general population

With these new offers, Iliad checks the first two marks, but completely misses out on the third, which raises an interesting question: is price sufficient to sustain the model?

I'm not convinced it is.

No doubt that Free will attract customers who are price sensitive, but if they only attract such customers, they won't get the market share they hope for (Niel mentioned a 25% market share goal, though didn't say what the business model breakeven was) and they will have attracted low-profitability customers which ultimately might not be such a bad deal for the other players in the market.

The real make-or-break question is, without any innovation in their offering, without any specific services or usage, will they attract the kinds of customers who are currently paying upwards of 50€/m to the other operators?

Of course right now everybody is up in arms, Orange, SFR and Bouygues have slashed severly in the prices of their "cheapo" brands (thus confirming the not so subliminal message Free is pushing that they were "screwing their customers" until now) and it looks like 50% of the market will subscribe to Free. When the hulubaloo dies down, many customers are just going to do what most customers always do: stay where they are because the hassle of change is just too much to deal with.

Without a cool/geeky element to the offer, Free is effectively missing out on what made their success in DSL: low price combined with innovative service components.

Fans of the offer are saying that these things will come, and maybe they will but I wonder if Free hasn't missed the best possible window to introduce disruptive usage into the mix (and by the way, in case anyone wonders, things that could have made a difference: femtocells in every box, fully integrated ott apps, 4G/LTE, 3 screen approach, etc.)

A revolution in perception, maybe

Iliad entering the market was presented as a revolution by the company itself and most of the press, but is it really? It's unlikely to be a revolution in usage unless one thinks that 3GB of data in a 20€/m plan will boost mobile data usage exponentially (both in volume and adoption). I doubt that somehow, but you never know.

If there's no usage revolution, the only revolutionary aspect left will be the bloodbath. That's extremely likely, even if Free fails to reach it's penetration targets. Within a few days of them announcing their tariffs, competitors had slashed some of their prices in half or more (with, as mentioned above, a likely lasting negative effect in perception) and that's a path that there's no coming back from. It's understandable that they would run around like headless chicken, and it's not like they had no time to anticipate, but it's probably fair to say that they did not expect such price aggressiveness.

Customers are whooping with joy and touting the virtues of competition, as well they should be. But there should be no naiveté about this launch: the blood bath will have impact on the general market value (value destruction) on investment capacity and on employment. There's nothing inherently wrong there, these are all standard free market effects. The issue will arise from the brutal change resulting from a combination of a cartel exploding in the face of a disagreeing competitor and said competitor betting on volume to make up for low margins. The impact will occur in a very short period of time and the industry and some of its employees will inevitably suffer. There was even an ironic (considering their free-market advocacy) short note in today's Challenge (Free va coûter 4 milliards à l'état) arguing that the state would likely loose €4bn in tax revenues as a consequence of the introduction of real competition in the market.

There is however one way in which Iliad's offer could be considered not revolutionary per se but driving a revolution, and that is the perception of hidden costs. Iliad has done its utmost to avoid all the hidden costs that customers tend to hate but could not avoid until now. Consumer advocacy group UFC Que Choisir published a list of all the noteworthy specifics in the terms and conditions, and while there are still a few aspects that might be considered dodgy (especially around roaming in certain countries), by and large the contract is as short, clean and understandable as they come and certainly much cleaner than anything the industry has seen so far.

That's exactly the point that Rudolf van der Berg argues in this article in Les Echos entitled Grâce à la clarté de ses forfaits, Free ouvre en grand les robinets du mobile. Basically by making their offers transparent, they are going to force transparency onto the market and forever change the perception and expectations of customers. 

I'll buy that. That is a true revolution, and will likely happen no matter how well Iliad fares…