Analyzing Broadband Usage in France and Portugal

2 Feb


Last year Diffraction Analysis worked in collaboration with the FTTH Council Europe on a study analyzing the behavior and attitudes of Swedish Broadband Users. In particular, we examined their satisfaction, their intentions to upgrade or migrate and their broadband usage. We recently published a thorough analysis of these results under the title Fiber broadband drives higher satisfaction and advanced usage.

The second wave of that study will be presented in Warsaw at the FTTH Council Europe’s Annual Conference. I will be presenting the findings for our France and Portugal studies on February 12th AM. This is a unique study that yielded fascinating and quite unique results. The full-fledged studies for France and Portugal will be published later this year, but for advanced insight into the behavior of FTTH and FTTB users in particular, I hope to see you in Warsaw!

The Digital Single Market is Already Happening

29 Jan

Remember the key item on the incumbent telecom lobbyists’ agenda: a lower regulatory burden and unified rules across Europe so that large players can “consolidate”. Read “buy smaller players”. Behind the rhetoric is a very simple expectation from these large multinational players: less competition.

These last few months, we have seen such consolidation happening all over Europe. In France, Numéricable (leading cable operator) purchased SFR (#2 in mobile and #3 in fixed). In Portugal, Altice who owns Cabovisão (#2 cable player) is buying PT, the incumbent. In the UK, BT (fixed incumbent) is buying EE (#1 mobile player) and Three (#4 mobile player) is buying O2 (#2 mobile player).

It won’t stop there. Which raises an interesting question: why would we need to change the rules if the consolidation is happening anyway?

At the heart of it is a quasi-philosophical consideration around competition. Policy makers remain convinced that competition is not needed for competition’s sake, but because it keeps a market dynamic and healthy. The interview that the new president of ARCEP gave yesterday in Les Echos says nothing else.

The problem is that policy makers have so far refused to look at exactly what it is that needs to compete to make the market healthy. Incumbents want less competition because duplicated investments in infrastructure (what little there is) weigh them down. But do we need competing networks? At the physical layer, it’s pretty evident that we don’t.

Why not reconsider the paradigm for once? The Digital Single Market is happening whether the rules change or not. If we could avoid killing competition on the way, I’m pretty sure that would be a worthy policy goal…

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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A mile wide, an inch deep — Medium

6 Jan

I was recently quoted as saying, “I don’t give a shit” if Instagram has more users than Twitter…


As I ponder my "insight into 2015 and beyond" post for the new year, I’m looking into things regarding the Internet rather than broadband, and this article resonates because as a data buff I know that single-metric analysis never tells you the truth or even close to the truth. I also feel that the "numbers" competition between social networks is ridiculous as a user of twitter, G+ and Facebook: I have different activities on all three, and different expectations of all three. Sure, they overlap somewhat, but by and large considering social interaction tools as interchangeable is missing the point.


Anyway, this is well worth a read and it highlights a number of massively important points: metrics are much too often US centric, the confrontational nature of the numbers competition misses the point on how users are engaged, and a profitable business online does not necessarily need as many users as possible (in the same way that a micro-business on Facebook might not benefit from more sock-puppet followers). 


Time for a more mature way of looking at online engagement. 

See on Scoop.itConnected World

The Disruptive Power of Wholesale Approaches

8 Dec


Steve Kamman’s blog Strong Views Lightly Held has come back to life. This is excellent news. Steve is both a top telecom market expert and a great disruptive thinker, a winning combination if you want to look at things a little differently. His latest blog post got my mind churning, connecting (as he often does) a number of previously unconnected dots in my mind.

The post is entitled US Wireless About to Get Interesting (and Ugly). I strongly encourage you to read it, but in a nutshell, Steve argues that DISH’s massive spectrum assets will be put to use to disrupt the US market in the very near future. Most interestingly though, Steve outlines one possible use of that spectrum that resonates a lot with me: building a wholesale wireless network centered around IoT rather than human communications.

Steve isn’t arguing that it should be solely able to deal with IoT (I think) but rather that it could be designed with IoT in mind from the get go, both from a technology standpoint and from a business model standpoint. One of the issues I raised in a number of speeches I made recently is that Cities are currently paying through the nose for sensor-based smart city applications because the network layer is sub-contracted to carriers who have no genuine interest in this market and are not adapting their pricing to its needs. While that might push Cities to consider alternatives (like deploying their own backbone fiber + wireless or even their own fiber to the home as a basis for smart city applications), the alternative Steve outlines could be a really interesting way of complementing that “self-reliance” scenario.

In fact, in combination with the recently announced Veniam products, a little Sigfox for low-level continuous data and deep fiber aggregation + wifi for upstream, you could totally see how cities could, with minimal investment, completely circumvent the traditional telecom ecosystem. Not to mention that, in the case of DISH, it could open up opportunities for traditional mobile telephony/data disruptors like Ting to expand their footprint and (possibly) make higher margins than with the current MVNO deals they’re getting. And there’s probably a way that open SIMs fit into this as well. If DISH was the first to fully embrace that in the US (T-Mobile is kinda there but not quite, as I understand it) the Verizons and AT&Ts could be in for a lot of trouble.

So, Steve, how do we make that pitch to Ergen ?


Photo: (cc) by Camilo Rueda López

Veniam Wants to Build a Smart City One WiFi Bus at a Time

3 Dec

Startup Veniam lands $4.9 million Series A round to build its WiFi for moving vehicles network to enable municipal WiFi for smart cities


This is something I’m going to have to dig into big time. I can see the potential, I find it interesting, and yet at the same time I fear that this will be seen as "sufficient" infrastructure by short sighted city executives. "Do we need to think about network infrastructure needs?" – "Of course not, we’ve got the bus thingy…" 

See on Scoop.itConnected World

An Example of Spin-Off

2 Dec

In the last few weeks, Thomas Langer and myself have been talking about structural separation via spin-off at length, and interestingly yesterday’s news gave us an illustration of what it might look like. I’ll let Thomas describe this to you in his own words:

Yesterday, one of Europe´s largest utilities, German e.on announced its plans to split into two publicly listed companies via a spin-off. This approach nicely corroborates our views of how fixed access spin offs could add value to the incumbent sector. Admittedly, market dynamics in the energy and communications markets are not comparable. Without going into the details of the motivation for the decision (excess capacity in the power generation market, repercussions of the decision by the German government to wind down nuclear power), a number of details of the proposed transaction highlight some of the aspects we discussed in our „Structural Separation“ study:

1. Even large European companies are considering spin-offs to release value for shareholders. The presentation to analysts mentions strategic, operational as well as financial benefits. These range from the creation of „more focused companies“, less complexity of organisational structures and a „better alignment between rewards and results“. Last , but not least the transaction „provides tow different and compelling investment opportunities.“

2. Interestingly, the spin-off will lead to structural separation between traditional power generation on the one side and green power and services on the other. Clearly this suggests that a shift in technology and a focus on service orientation both played a role.

3. The initial spin-off will take place in 2016, in less than two years. This illustrates that large organisations can execute a reorg. within a short time frame. Skeptics that look at structural separation in communications markets as too complicated should analyse this deal. It´s doable.

4. One slide of the presentation deck is entitled „Safguarding emloyees interests“. This corresponds ideally to our standpoint that a spin off must not be seen as a means for job cuts and larger downsizing. This would risk losing both internal support and consent of labour unions.

Ah yes: The e.on share was up by more than 4% by midday yesterday while the German Dax was slightly down.

So, not a telecoms sector example and not perfectly mappable, but interesting to examine. And remember, the best example out there is New Zealand, and we’ve described it at length in one of our reports entitled Can the New Zealand NGA Model be Replicated?

Diffraction Analysis in Crosstalk

1 Dec


Crosstalk is an Australian podcast on Telecom matters, and as one might expect, the Australian NBN is a frequent topic. Diffraction Analysis’ Benoît Felten is interviewed in the latest podcast, Doesn’t a 3030 Vision Need Fibre? Phil and Benoît discuss Structural Separation in the wake of the publication of our report Can Structural Separation Via Spin-Offs Help Europe Achieve its European Ambitions. Is Australia a good example of Structural Separation? (Spoiler: no) Could a classic Structural Separation model similar to that of New Zealand be implemented in Australia? And how future proof is the current “three networks” NBN plan exactly?

Photo: (CC) David Jenkins

DT didn’t shelf its variable rate plans…

28 Nov


There was an interesting and animated discussion on twitter yesterday about the fact that journalists systematically present network congestion due to Online Service Providers as a given. The discussion led to talk about Deutsche Telekom’s pay what you eat plans announced last year, and their apparent shelving. But Pál Zarandy pointed me to this article which suggests that the plans haven’t been shelved.

Essentially, and even though the wording is all but clear, what this suggests is that consumers will either be able to buy expensive “flat rate” plans, or cheaper variable-rate plans, the ones that DT believes would help them leverage their market power to coerce Online Service Providers into paying for zero-rating their content (as shown in the video I posted yesterday).

Now as Dean Bubley repeatedly stresses, this has exactly zero chance of happening… as long as there is significant competition in the market. Now the bid for further consolidation in-market appears more clearly as a part of this mad plan. I still believe the chances of it actually being implemented are zero, unless a stupid policy maker (EU Parliament who voted a non-binding motion to structurally separate Google, I’m looking at you) actually buys the argument…

The Incumbents’ Net Discrimination Plan Exposed

27 Nov

I was just pointed to this fantastic German video that ‘unveils’ Deutsche Telekom’s plans with internet discrimination. It’s both funny (because it turns every creepy aspect of it into a ‘feature’, like “you will no longer be bothered by these thousands of services you could never figure out“) and scary, because from all I can gather in discussions with Incumbents across Europe and the US, this is exactly what they hope to achieve. Seriously worth watching.

Oh, and since I always insist on the lobbyists working for Big Telecom being exposed, the guys behind this are Internet activists, and you can find them on