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Gigabit Providers Not Focused on Apps – Study

Jason Meyers

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?)

For the latest on Gigabit Cities, visit Light Reading's broadband/FTTx content channel. And watch for forthcoming details on Light Reading's Gigabit Cities Live event, to be held in May 2015 in Atlanta.

"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

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10/31/2014 | 1:54:16 PM
Focus on "gee-whiz" common
The focus on the "gee-whiz" factor is nothing new. The same thing happened to movies when talkies were first introduced, to television when color was first introduced, etc. With every new introduction of technology, innovation/quality of the product fell off because it was thought that the new bells and whistles would be enough. Usually they are, but only for a little while.
Mitch Wagner
Mitch Wagner
10/29/2014 | 3:27:30 PM
Re: It's in the way that you use it
Great points, Jason. A few users will be hypnotized by the prospect of gigabit Internet (I'm one of them!) but most will want to know what they can do with it. 
Tim Downs
Tim Downs
10/29/2014 | 12:44:33 PM
Gigabit City Survey
I find the results of this survey consistent with the perceived driver of network upgrades, which is economic development and attracting new businesses. While any city leader may not know precisely what a gigabit network can be utilized for, it isn't a big leap of faith for that same city leader to propose the deployment of a gigabit network to differentiate their city from others in the region. Businesses all over the country have a choice on where to locate; some choose tax breaks, some choose weather, some choose proximity to an NBA or NFL franchise close. In a globally connected digital economy, more and more business leaders choose state-of-the-art digital infrastructure as a primary reason to move or open up shop in one location over another. As survey respondents said, being a 'tech leader' says it all.
10/29/2014 | 11:41:42 AM
It's in the way that you use it
I'm increasingly convinced that fostering development and availability of gigabit-worthy applications and services must be the primary focus of gigabit service providers if they want to justify and monetize their investments. The implications are broad -- entertainment, education, healthcare and beyond. Video-based collaboration for home-based workers is huge in and of itself, especially considering time-sensitive applications in areas like telepsychiatry and teleradiology. Watch for upcoming coverage here on what Orange is doing in this area to encourage application development. 
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