I had a “wow!” moment this morning reviewing a presentation given by WiK’s Scott Marcus entitled State-of-the-Art Mobile Internet connectivity (thanks for Chris Marsden for pointing this out).

In particular, there’s one graph in there that blew my mind, I’m reproducing it here.

Source: Mobidia / Informa (2013)

This shows the proportion of mobile data traffic that is offloaded to private wifi networks (in blue) or public wifi networks (in light blue). Basically, only a quarter to a third of the data traffic consumed by mobile devices is actually delivered over mobile networks (except in Japan and India where it’s half).

Wow.

Take that, “we’ll only need mobile networks in the future” posse…

After the FTTH Council Europe Real-estate and FTTH webinar (the replay of which can be found here), I was sent this picture by a contact in Lebanon. It’s good to see that – especially in emerging markets – the perception of the added value of fiber for new developments exists.

I already published a humorous video on the Australian Coalition’s NBN plan last week, but this one is even better. Why don’t we get this kind of humour in France ?

The tech press has been abuzz last week when it was first leaked and later announced that Deutsche Telekom would soon apply data caps to their wireline broadband offers (see this Fierce Telecom article for details.) Unlike AT&T style caps, heavy users will not be charged overage, they will be throttled to service levels marginally higher than what we’d get in the days of dial-up.

The company, as is often the case with these stories, claims that this is to avoid the cost of bandwidth hogs spilling over to the general public’s subscriptions. It’s not.

Caps serve no purpose in managing traffic flows, as Diffraction Analysis clearly demonstrated in our study last year entitled Do Data Caps Punish the Wrong Users. In fact, that’s even been admitted semi-officially by the head of the US Cable lobbying association. Data Caps serve no purpose other than to create a very strong disincentive for customers to consume video “over the top”. The fact that DTs own video-on-demand service will not count as part of the monthly traffic allowance is to be expected, and is a clear giveaway.

DT is playing foul, but that is also to be expected: this is just a new front in the war against Net Neutrality. Since operators, incumbents in particular, can’t get a clear go-ahead on the ability to throttle online service providers to their hearts’ content or to make them pay a toll for delivering traffic to end-users who have already paid for the right to access that content, they’re creating barriers on the side of the end-users to make their own service offerings unfairly competitive.

The real question is what happens next: will DT lobby the government and regulator to apply the same caps to their wholesale bitstream offers ? I suspect they will, just as it happened in Canada. Otherwise, other operators in the market will start advertising no-capping policies, and if they’re smart they’ll even start partnering with online content providers to drive the difference (for more on that see Diffraction Analysis’ latest report Building the Optimal NGA Service Portfolio). That could mean loss of market share for DT.

Is the German market truly competitive ? Guess we’ll know soon enough.

Photo Credits: Gaffel Kolsch by Generallysceptical (CC)

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.

I have written a fair bunch recently about Net Neutrality, and I’ll be writing some more, because this is by no means an issue that’s going anywhere in the near future. Meanwhile though, I wanted to relay an example of a blatant neutrality breach that really stunned me. It was reported by Zachary Henkel on his blog last month in an article entitled ISP Advertisement Injection.

I encourage you to read it, but here’s the story in a nutshell: connecting through a wi-fi network, Henkel noticed some really intrusive advertising banners. He thought it was malware at first, but after extensive testing on multiple computers, he realised that it was the ISP superimposing advertising over his normal surfing.

In France recently we’ve seen an ISP deleting adverts, and sadly some people were in support of that, because they think they’re already subjected to too much advertising. But this is really the same thing at core: it’s the company that sells you internet access deciding what you should see or not see of the internet.

Now if that doesn’t make you scared…

Last week I was interviewed by Phil Dobbie on the Australian Telecom Podcast Crosstalk about the viability of on-demand FTTP. The whole show addresses issues of copper pull-through with an AAAC representative and on-demand FTTP as seen from the UK perspective as well as my own comments on the issue.

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 the most interesting features of this week’s alternative NBN plan published by the Australian opposition (see my article Australia’s NBN becomes a political football on Telecom TV) is this notion of “on-demand FTTP”.

On paper, there’s a lot to be said for this concept. Basically, the operator (public or private) deploys Fiber to the Node, but a consumer can pay to get Fiber to the Premises if they really want it. This feature is not unique to the alternative NBN proposal, it’s also being trialled by BT in the UK as highlighted in this article. What’s interesting about the concept is that in theory it addresses the demand issue. In a nutshell, we’ll deliver “better broadband” to you for free, but if you really want “kick-ass broadband”, you can pay extra to get it.

Except it’s a technically absurd concept, for two reasons:

• firstly, because the costs of FTTP deployment that are commonly considered (say around €1000 per home in dense urban areas) are mass deployment costs. These costs can be met when you send teams on the field to connect every home. If you send teams on the field to connect one home, the costs are much much higher. Just look at how much large businesses are paying to connect their premises: it’s in the tens of thousands of euros. Presumably, there’s a comfortable margin built into that price, but it still gives a sense of what the real cost would be.

• secondly, and very ironically, both BT and the Australian NBN chose point to multipoint architectures. That means that if a customer was to ask for an FTTP connection in a given area, the whole active equipment chain from the customer’s ONT to the splitter to the OLT would have to be activated for a single customer. The costs of that are absolutely prohibitive.

And I won’t even mention the network management absurdity of maintaining two parallel infrastructures, one of which only serves a very small number of customers.

On-demand FTTP is a fallacy. It will either never materialize or be priced in such a way as to convince customers not to take it. The reason it’s being put forward is purely as a marketing argument for BT and the Australian opposition to be able to say “those that really want it will be able to get it”.

Not unless they’re filthy rich, they won’t…

Photo Credit: On Tap by Benoît Felten

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.

I’ll let you read the rest of the interview here.

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.

The Op-Ed is called Competition central to French fast broadband and since it’s behind a paywall, you can find the full text on Google News here.

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).

Photo Credits: Sydney Opera House by Kurtis Garbutt

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!)

Not long, that’s how long.

Stefan Stanislawski writes a really interesting blog post over at Fibernomics.com entitled Typical major telco shareholders hold the stock less than a year – is this really the right type of capital to fund fibre?

Stefan details the average duration of investors holding on free float shares for major European incumbents. On average, it’s less than a year. Stefan argues that as policy makers seem convinced still that incumbents are the solution to get fiber deployed, that reality itself might make it impossible. Such short term dealings are not aligned with the requirements of infrastructure investment.

Very interesting read.

Photo Credit: Wall Street by jpellgen