Telco 2 access
Transcript of Telco 2 access
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Pipes yours, mine, theirs or ours?
James Enck
October 2006
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The changing shape of access
A number of challenges are arising in the
traditional access order, which pose uncomfortable
questions for telcos, MSOs, utilities, andregulators:
How broad does broadband need to be?
What is broadband connectivity for?
Who should offer it? What should offer mean?
How does the incumbent respond?
How does regulation change?
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Recent study from Arthur D. Little came to the followingconclusions about European broadband in 2011:
? Not more than 10% of broadband households areexpected to exceed 30Mbps;
? Upload speed of 8Mbps will be sufficient;
? FTTH will mostly be relevant at a local/regional
level, assuming it is able to offer more than superiorbandwidth.
Thanks for telling me about your planet
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now let me tell you about mine
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Virtual worlds, real money
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I mean REAL money
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On my planet people like to contribute
AS WELL AS consume
Source: BigResearch, August 2006
0%
5%
10%
15%
20%
25%
30%
35%
40%
Blogging Satellite radio Web radio Instant messaging Video gaming
Mar-06
Aug-06
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Frequently, in some cases
0%
5%
10%
15%
20%
25%
30%
35%
Every day A few times a
week
Less than a few
times a month
This is the first time A few times a
month
Frequency of video uploading
Source: Interpublic Group Emerging Media Lab, User Generated Content Generator Motivation Study, June 2006
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They use free, sophisticated tools
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They remix, modify, mash-up
Source: Fark
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They find DIY distribution
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They create micro-markets
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Sometimes they find a sweet-spot
0%
10%
20%
30%
40%
50%
60%
70%
80%
Liveco
ncerts
Live
sportinge
vents
Videopod
casts
Full-l
ength
movies
orTVshow
s
Concert
highlights
Amateurv
ideos
Sport
shighlights
Musicv
ideos
TVor
movieclip
s
News
Types of online video watched
Source: AOL/AP September, 2006
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Sometimes they do naughty things
0
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
70,000,000
Dec-0
4Jan
-05
Feb-0
5
Mar-
05
Apr-0
5
May
-05Ju
n-05Jul-0
5
Aug-0
5
Sep-0
5
Oct-0
5
Nov-0
5
Dec-0
5Jan
-06
Feb-0
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Mar-
06
Apr-0
6
May
-06Ju
n-06Jul-0
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Aug-0
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Sep-0
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Weekly total
Monthly run rate
Weekly and normalized monthly download figures, top ten global video titles
Source: Daiwa, from p2pnet.net and BigChampagne data
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They will demand true broadband
- Kenjiro Cho, 2005
AND THESE ARE JUST THE APPLICATIONS WEKNOW ABOUT THINK OF WHAT MIGHT COME
ABOUT BETWEEN NOW AND 2011!!!
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Will the current formula deliver?
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Look at the Dutch market
Seemingly a perfect example of the EU
vision of facilities-based competition:
DSL vs. cable 60/40 split
ULL takes c.30% of the DSL market
Among the highest broadband penetration rates
in the OECDBut
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times do change
KPN has acquired a number of other smaller players, nowc.75% of the retail DSL market
Two of the three largest MSOs now under control ofprivate equity expecting to merge
KPN moving from 1,350 C.O.s to 28,000 local accessnodes for FTTC project to be funded by sales of the oldC.O.s (OPTA has placed some safeguards as of yesterday)
The market becomes more, not less, concentrated. Is this a
triumph of regulation? Besides, if everything is working so well, why are there so
many signs of unrest?
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The sleepy Dutch town of Hillegom
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The bustling city of Rotterdam
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Economic/social policy collide with the telco
raison detre
"...future proof data infrastructure is for Rotterdam just as
important as a good connection by means of water, road andrailtrack. A fiber network has proven to be an important
settlement criterion for young professionals, knowledge-intensive
companies, port-related companies and companies in the medical-
technological sector. A high-quality communications network is
essential as well for cultural institutions.
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In Singapore
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Liberte, egalite, et fibre
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Maana this!
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The sewers are alive, with the sound of
http://www.cablerunnerusa.com/index.htmlhttp://www.wienenergie.at/we/wienenergie/jsp/home/guestHome.jsp?BV_SessionID=@@@@2001798676.1141723449@@@@&BV_EngineID=cccdaddhejhhdmfcfngcfkmdfhjdfkn.0 -
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Springtime for muni-utility fiber
Currently paying DT 30mp.a. for copper access
Will spend 200m overfive years for FTTH
Needs to inspect and renewmunicipal sewer system
Will progressively pushfiber as it goes
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Summary points
The traditional model for access is going to befundamentally challenged:
1. Municipalities/regions see broadband access as asocial/economic policy tool;
2. Players with backgrounds in construction andinfrastructure management can be credible players;
3. Regulatory Pandoras box may open i.e., how doyou maintain national regulation when the national
incumbent has 15% market share in certain areas?4. What is the rational response from the incumbents fight, flight, or pragmatism?