Why telecom has been a land grab for exclusive telecoms infrastructure – and why this needs to change.
I’m not sure that I fully agree about the degrading value of the last mile argument, but I really like the way Richard looks at it, especially in light of considerations on structural separation: an alternative to value going down is keeping the monoploly separated and regulated. A better (in my opinion) way to keep the investment going.
It’s with great sadness that I learned about the passing away of Keith McMahon on Monday. I only met Keith on a couple of occasions, but he was at the top of the analyst game when it comes to meaningful, insightful and no-nonsense analysis. I followed him on twitter and his feed was one of those that rarely failed to make me ponder. He will be sorely missed.
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.
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.
It’s refreshing to see that not all telcos are going the way of the phone tree, doing all they can to discourage you from talking to anyone on the phone.
It’s hard to believe that profitable businesses would be so detested by their customers, and yet survey after survey shows how US broadband users revile their cable operator. The latest is the subject of an article in the Washington post entitled A Soup of Misery, which shows (amongst other findings) that over half of US Cable customers would switch to another provider if they actually had an alternative.
The amusing thing (or ironic, or sad depending on how you want to look at it) about this is that cable still insists there is competition. If this market was a free market, with satisfaction ratings like that cable would be bankrupt instead of being amongst the most profitable industries in the US.
There’s an added bit of irony for me. A few weeks ago I got into a bit of tiff on twitter debating with Luigi Gambardella, the head of the European Telecom Network Operators’s Association (ETNO). ETNO has been lobbying fiercely for a regulatory model that’s more akin to that of the US, despite overwhelming evidence that that market is dysfunctional and anti-competitive. I naturally took exception to this view (as well as to the preposterous assertion that wherever fiber was being deployed, it was not regulated), and the back and forth went south very quickly (you can read the whole exchange here, assuming it doesn’t get deleted). The point here is that Gambardella’s final stroke was the following:
@fiberguy the customers are very happy in US and there are a lot of investments
— Luigi Gambardella (@lgambardella) 12 Avril 2014
Needless to say that baffled me…
Anyway, all this to say that looking at the US for a functional model for Europe is not just ridiculous, it’s dangerous…
For the last few days I’ve been musing about the recent “right to be forgotten” that has been imposed on Google (and, presumably other search engines, although I haven’t looked at Bing and others in any detail on this issue). Read this good Techcrunch feature if you don’t know what I’m talking about. And then I watched the excellent segment above last night and things started to coalesce.
Needless to say, I think it’s a bad idea. If you are (to take a hypothetical example) a failed Spanish business man who is tired of people finding newspaper articles on your failures, you should turn to said newspapers and ask them to remove the incriminating articles from their online archives, or at least delete your name. The newspapers are the ones who wrote about you. Google changes nothing conceptually from someone finding an article on you in the paper archives of a library. Sure, it’s easier to find information on you via a search engine today than it was twenty years ago, but the search engine is not responsible for the information it links to.
The implementation seems even more ridiculous to me. Quite simply, here it is: I can see three circumstances here where this plays out, and all three are different :
- first, you post stuff that you regret later. Then it’s your responsibility to remove it. Or it should have been your responsibility to not post it in the first place. Ignorance is a lame excuse in that instance: it’s been said enough that anything posted to the internet is there forever.
- second, someone (an individual) posts stuff about you that harms your reputation (photos, sex-tapes, illegal recording). Then there are laws to protect you, you should sue their ass and get the content removed by law.
- third, the (online) press at large writes about you. That’s not a search engine issue, it’s a freedom of the press issue. If it’s defamatory, you sue.
In none of these circumstances is the fact that potentially harmful information about you is available on the internet Google’s responsibility. None.
Don’t get me wrong, this is not about absolving Google on all issues, but on this particular issue, I think this is totally wrong-headed. Ironically, Google is playing this the way they play best: they’re playing dumb. The process to remove things is so manual and so subjective that the results will most likely be disheartening for anyone who wants out of Google.
And, as John Oliver points out in the video above, the Spanish guy who wanted his debts forgotten now is famous worldwide… for his debts.
Just found this fantastic video that illustrates in the best way I’ve ever seen what latency really is.
Last night the US regulator FCC announced that they were carving out exceptions to Net Neutrality rulings for “fast lanes” that ISPs could charge to OSPs. Only in La La Land can this still be called Neutrality. I’ll write about this more at length when time allows, but in the meantime let me share this wonderful drawing on the topic by Susie Cagle:
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).
Spread the word!
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: https://www2.gotomeeting.com/register/826247690
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!
UFB deployment to continue.
Sneaky but clever move from Vodafone. Good that the government held it’s ground: implementing structural separation to then let a vertically integrated player provide wholesale would have been a catastrophic move.
See on www.itnews.com.au
The week before last, after the FTTH Council Conference in Stockholm, Stokab and Stocholm IT Region organized an event for their customers and stakeholders. They filmed the whole proceedings and have put it all up on a the Stockholm IT Region website. Since all of the speeches were of great interest, here are individual links to each one of them:
The morning started with an address by the Chairman of the Board of Stokab, followed by a fun presentation on the history of telecommunications in Stockholm by Anders Johansson.
This was followed by a very interesting presentation by Ericsson’s Head of Strategic Marketing on Smart Cities, presenting Ericsson’s Networked Society Index. You can find the Index itself here. What was interesting, beyond the ranking itself, was the trends emerging in terms of infrastructure, affordability of services and usage maturity.
Which led to Diffraction Analysis’ intervention, specifically on Smart Cities and the Infrastructure issues that are raised by connected community initiatives. It’s not the first time we deliver this speech, but I believe it was very appropriate to this audience and went down well. You be the judge.
Then followed an excellent speech by Christopher Mitchell on the US market and how some cities are taking broadband matters into their own hands (and others can’t). Christopher also talked about Google Fiber and the impact it’s having on the US market.
Henry Quek of Singapore’s regulator iDA then detailed how Singapore led the pack in terms of NGA and structural separation, and in particular showed how despite quasi-universal coverage the story is not over. Some fascinating things about enabling Smart City applications there, and a graph from Diffraction Analysis research quoted, always good for our ego.
The final speaker of the day was Chorus’ Martin Sharrock who explained very clearly how groundbreaking the New Zealand NGA model is, and the challenges that it faces from political turmoil.
There was finally a 45mn Q&A session with Ulla Hamilton (City of Stockholm), Crister Mattsson (Acreo) and Benoît Felten (Diffraction Analysis). The discussion was very complementary to some of the discussions had during the Investor’s Day earlier in the week: EU political process, structural separation, community involvement, etc.
Since Stokab then ran separate interviews of all the speakers, here’s Benoît Felten’s interview that summarizes some of the topics discussed during the presentations and panel discussions.
- “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.
In The Wall Street Journal, Andy Kessler writes that the FCC could change this overnight by focusing on what’s best for the economy, not just for those it regulates.
The underlying current of "it’s the cities’ fault" in this piece is one more reason every city in America (and many outside of America) should seriously ask themselves if taking their broadband future in their own hands isn’t the better option…
See on online.wsj.com
During the days preceeding the Sotckholm FTTH Council Annual Conference, we published a good number of tweets teasing some of the results of the first FTTH Consumer Survey. This study was undertaken in december with a panel of 400 users, 3/4 of which were FTTH/B users.
The full results were presented in Stockholm, and will be presented during a free-to-attend webinar sometime in April, but meanwhile I thought it might be interesting for those who haven’t read all the teasers to have them all in one place:
- In Sweden a huge majority FTTH users (75%) think their broadband is better than before they had fiber.
- 67% of Swedish broadband users think broadband over fiber 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 the average FTTH user spends 5.3 hrs online at home, 6.7 hrs for <35 yrs old. DSL only 4.1 hrs.
- 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 fiber 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.
The next step is to convince policy makers that there is value in the gaming market. It’s bizarre how "entertainment" is a great market when it comes to touting your export achievements, but not so much when it comes to justifying investment in infrastructure…
See on opticalreflection.com
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!
There are two ways to read this. One is to dismiss it entirely as yet more vaporware (lord knows there’s been a fair amount of that around Google Fiber). The other is to conclude that Google deployed P2P (unlikely) or is looking into WDM-PON (more likely). Either way, does it really change the name of the game ?
See on www.droid-life.com