Gigabit Providers Not Focused on Apps – Study
Many operators rolling out gigabit services are jumping on the bandwagon and are more focused on simply providing ultra-high-speed access than on enabling new applications, according to a new study.
The report, published by Broadbandtrends LLC , surveyed 88 service providers in various parts of the world (with a heavy focus on North America) about their plans for delivering gigabit broadband. Not surprisingly, the study credits Google Fiber Inc. 's announced intent in 2010 to enter the market with both raising consumer consciousness about gigabit services and catalyzing other providers. Google, the report suggests, sparked a race to save face.
"When we asked what the drivers were, it was interesting that being perceived as a tech leader was number one," says Teresa Mastrangelo, principal analyst for Broadbandtrends. "It wasn't about the speed at all. It wasn't about future-proofing the network. It was about saying 'We're the first in this market,' and being perceived as very forward-looking."
It also wasn't about identifying and fostering new or enhanced applications like gaming or high-definition telepresence, for example, that could fully leverage the speed of gigabit networks, Mastrangelo says. That's significant, especially given widespread skepticism about the need for gigabit speeds -- particularly in residential environments -- and industry efforts to foster creation and development of gigabit-ready apps. (See US Ignite Cultivates Gigabit Apps, Are Gigabit Cities Lands of Confusion? and Gigabit: What Is It Good For?)
"They seemed unsure about what they wanted to offer and unsure what they could do with gigabit networks," she says. "I felt there was a lot of 'if we build it, they will come' but not a lot of understanding about what it would take to get people to use it."
The surveyed providers also ranked unclear demand as the number one challenge in deploying gigabit networks -- yet only 18% of them are requiring pre-registration, a tool that can be used to directly measure demand.
Overall, the study rightly identifies a market in the early stages of evolution -- one that many players perhaps rushed into without strategies for customer acquisition and service differentiation solidly in place.
"There were indicators that they were jumping on the gigabit bandwagon without thinking long-term about what it was going to mean," Mastrangelo says. "I'm not sure some of them even care if they're going to get subscribers to their gigabit service. They just want to say they have it. But that play can't last forever."
— Jason Meyers, Senior Editor, Gigabit Cities/IoT, Light Reading