At the FTTH Council Europe conference in London, I presented the results of a study commissioned by the Council on the benefits of FTTH deployment for real-estate players. 8 real-estate companies were interviewed extensively to understand how they viewed FTTH, having deployed it, and if they perceived benefits in integrating FTTH in the properties they build or manage. The results of this study will be presented in a webinar organised by the council on April 18th at 11 AM CET. If the topic is of interest to you, please register here.
During Mobile World congress, Telefonica Executive Chariman Alierta made an impassioned speech asking for the European market to be more like the US when it comes to telecoms. Here is a quoted segment of his speech:
“But we’re behind. It’s not normal that the main concern is that there should be three or four operators in Austria, for example. In the United States, there are three big operators, the same as in China. Here in Europe we have 160.“
Of course, I know exactly where it is that Mr. Alierta wants to go with this. But just for the record, this is what the situation is in the US:
Policy makers and consumers should be very, very careful what they wish for. The fact that the US market has not managed to foster competition should not be seen as an example of a healthy market, it should be seen as an example of regulatory capture. The fact that Mr Alierta takes China as an example is perhaps even more telling. We should not wish for our telecom landscape to look anything like that of the US (let alone China).
The challenge for the US now is to get out of a situation that has seen the recreation of a wireline monopoly. Only regulation can undo that situation. Susan Crawford in the above video throws her hat in the ring for FCC chair. I don’t know how likely it is that she would be nominated, I don’t know enough of US politics. If she does land the job, I certainly don’t envy her that job one bit. But if I was a US citizen, I would make it know loud and clear that I support her for the job.
I have in the past been very vocal about the need to understand FTTH and LTE in symbiosis. I was therefore quite pleased and interested to read the following interview of Suresh Sidhu, CCO of Celcom Axiata Berhad in Malaysia where he says (amongst other things): “FTTH is key to meeting business and consumer needs”. In a nutshell, the mobile arm of the Malaysian Incumbent TM does not think next-generation wireless and FTTH are antithetical, quite the contrary.
The interviewer (who seems to doubt the benefits of wireline connectivity) drives the following exchange:
As next-gen wireless services develop will there be a need for fixed-line services in five years’ time?
We see that the customers we serve are changing their behaviour from “walk and talk” to “sit and play”. Or rather – “walk somewhere, sit, play, walk somewhere else, sit, play”. Critical to this value proposition is the ability for wireless service providers to be present at the key “data hotspots” which could be home, cafes or the traditional street locations. We believe that LTE, HSPA+ and HetNets (including femtocells, WiFi, etc.) are key to serving this need. However, the best way forward may well be to seek convergent approaches that include the fixed world as well. People will do different things at different locations and a holistic relationship will drive both wireless and fixed technologies to develop their niches.
The debate on net neutrality has been heated these last few months, with various initiatives both at policy levels and ISP levels highlighting the need to clarify how internet traffic is carried so that journalists and members of the public can form an opinion on these issues for themselves. A while ago, I was asked by Google to write a paper aiming to do just that. It was released yesterday under the title There’s no economic imperative to reconsider an open internet.
I’m quite proud about this. Working on this paper gave me the opportunity to really explore the net discrimination arguments and examine their worth. My conclusions are expressed in the title: there is no big issue related to the cost of traffic management, even as the traffic itself increases. I hope you find the paper interesting, and feel free to spread it around.
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) !
On March 22nd, The Australian published an editorial I wrote on the French FTTH policy model. This came about because in recent weeks the Australian NBN has been under a lot of criticism and announcements on the French FTTH plans have been used in the political sparring there. Sadly, as if often the case with these things, the reports were incomplete or downright erroneous, which may be par for the course in political debate, but is very frustrating when you’re close to the action and see so much misreported.
I thought this was worth a little commentary for my readers in Oz and those that think that publishing an Op-Ed in a conservative newspaper necessarily means I’m espousing the views of the conservatives on this issue.
I’m not. Neither am I espousing labour’s views. I find it hard enough to think in black and white about French politics, so don’t count on me to take sides on what is essentially a political view of an infrastructure project on the other side of the world from me.
That being said, I stand by every word in that Op-Ed. I aimed to describe – as dispassionately as possible – what has been decided for the French FTTH deployment and what remains to be done. This is hopefully what I did.
The fact that there are other models than the Australian model for FTTH deployment shouldn’t really come as a surprise to anyone. That does not per se invalidate the current Australian NBN approach. But just me writing that doesn’t magically make the NBN perfect and exempt from rational criticism either. I would add also that the French model I describe in this Op-Ed isn’t inherently better than any other (even if it’s clearly more aligned with the political views of the conservatives in Australia), and (as an analyst) I’m not certain it’s going to work.
Political rhetoric works in absolutes. That’s completely at odds with what I consider to be the job of an analyst, which is to weigh pros and cons, examine approaches and situations in shades of gray to extract what may work and what won’t as well as what may be replicable elsewhere. If anyone is interested in actual facts, then I’m their man, and that was the deal about this Op-Ed. I’ll leave the interpretation in an Australian context to those who understand the Australian market and politics better than I do (and enjoy fisticuffs).
For the last few weeks, I have been busy working on a big in-depth report on NGA services. Although its importance can sometimes be exaggerated, TV content is of course at the heart of NGA portfolio considerations, and I wanted to delve a little bit here into how I have examined that issue.
The notion that broadband providers are scared of on-demand TV is not new, and it’s an understatement. All of the recent assaults that we have seen on Net Neutrality from ISPs around the world can be summarized in two issues: SMS and TV. The latter is of course of more relevance to wireline NGA networks, and this is what I wanted to focus on today.
I think the decision to offer a TV service is not as clear-cut as it’s often made to be, and I think many broadband providers may have gone down that road a little faster than was reasonable. TV delivery will only work if you can get the scale to operate it profitably, and even then the profits are likely to be limited. However, if you decide to deliver TV, then you are, like it or not, competing with the various Over-The-Top options available today. And if you decide to compete, you should make damn well sure your product is better.
My biggest frustration with IPTV strategies is this strange notion that it operates in a vacuum; that because a TV is connected to the broadband provider’s network that customer is somehow captive for TV. That’s absurd: with the multiplication of tablets, PCs and other screens in the home, there are now many alternatives to IPTV. If they provide a better quality of experience, then these will be used instead of the TV. And if that goes on for too long, then the IPTV service itself is at risk.
When you look at the marketing of TV offerings over NGA around the world, you see that the first thing put forward is quantity of content: number of channels, number of VoD movies, etc. That’s all well and good, but it’s meaningless to the customer if the ergonomy of the service doesn’t allow him to watch what he wants to see when he’s available to see it as opposed to watching something that happens to be on. And that’s where OTT offers tend to be vastly superior to broadband providers’.
What it takes to compete with OTT offers, in my opinion, is the following:
rich and well-indexed content
fast and intuitive ergonomy
a powerful search engine
an effective recommendation engine
I haven’t tested many broadband provider TV offers around the world, but none of those I did test had all four of these. In fact, very few of them had any of these.
To highlight the different operating paradigms of broadband providers and OTT TV providers, it’s good to remember that in 2007 Netflix opened its recommendation code to developers in the hope of getting improvements on recommendations, and offered $1m to the first team that would get a 10% improvement on recommendation accuracy. Last year, Netflix announced that 75% of their traffic was driven by the recommendation engine. The mindset here is to never let you go.
I remember when I used to work for mobile operators a few years ago and every screen design was conceived to maximise effectiveness, minimise lag and keep the consumer engaged. I don’t think many broadband provider TV interfaces are built that way, and if they don’t radically change the way they approach things, then they’re not competing.
To be fair, I see a few players starting to really get this. In January I talked briefly with the CEO of NDS, now part of Cisco, a company that offers such sleek and intelligent interfaces for broadband providers who want to deliver a high-engagement TV experience. The following video is an example of what Portuguese operator ZON has done with the platform:
Now I know this is an advert, and I don’t know if the quality of experience is really that good when you’re on the end of the line. And this isn’t an endorsement of NDS either: I don’t have the technical background to assess if their solution is better than others’. I just like what I see here.
What I do know though is that ZON offers this only with their fiber access, and I know why: you need a hell of a low-latency to make things this fluid. And NGA is what it takes to deliver low-latency.
At least ZON seems to be asking themselves the right questions to get customers engaged with the TV product, which will make them a lot less susceptible to go looking for OTT alternatives.
In the service report Diffraction Analysis published last week, Building the Optimal NGA Service Portfolio, we not only explore the field of NGA services of all kinds, we also examine the best delivery approaches for each. TV is only part of the equation!
I have great news to share with you today: Eurotelcoblog, the original disruptive telecom blog that inspired so many (myself included) is back!
James Enck posted a very interesting entry today (peppered with his usual sharp wit) about value perception in the broadband market, arguing that customer perceptions are largely skewed when it comes to the relative value of broadband and other goods and services (including POTS line rental). The post is entitled Value Perceptions and is well worth a read.
I fully agree that this situation opens up opportunities for disruptive positioning, and this ties back to my earlier blog post on Technically Speaking about the Innovator’s Dilemna in the broadband market. It’s a sad truth of our market that few players dare to be disruptive, even if they are poised to benefit the most from turning the tables on legacy players. Who is going to educate the customers on the value of high quality broadband if not them?
As some of you may know, US incumbents and cable operators have been lobbying fiercely in the last few years to forbid local governments by law of investing in broadband infrastructure. This morning, one such bill which was to be voted by the Georgia legislature was repealed. I wanted to publish the comic strip that the opponents to the bill have been circulating, because I find it marvelous and sadly closer to reality than the caricatures suggest. The even sadder thing is that while this is a victory for those who believe that the destiny of communities cannot be left in the hands of a for-profit duopoly, this is the second time this law has been put up to the vote in Georgia, and it’s likely to rear its ugly head again next year, and to rear its head in many other states as well. 18 US States (if I’m not counting wrong) already have such bans in place.
I have been invited to contribute my thoughts to the Technically Speaking blog edited and moderated by the excellent Gareth Spence. My first contribution went up yesterday under the title of Scarcity is the Achilles’ Heel of Legacy Broadband. I’m going to try and make these on a regular basis; they will at times move into tech territories that I don’t normally dwell in, but that’s a good thing, I think!
(Oh, and if you don’t know why apples and oranges, well… I’m not sure I do either!)
I have great news to share with you today: 
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