telco 2 access

8/14/2019 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

6

Mar-

06

Apr-0

6

May

-06Ju

n-06Jul-0

6

Aug-0

6

Sep-0

6

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
http://www.iliad.fr/


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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
http://www.sws-schwerte.de/ruhrpower/index.html


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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?

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