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Huawei Ultra Broadband Forum 2018

The Perennial Need for Speed

Connection speed has long been the marketing hook that operators have used when fishing for broadband customers, but is it now due for replacement?

Several speakers at the recent Ultra-Broadband (UBB) Forum in London believe speed will become less important as ultra-fast networks proliferate, forcing operators to tout other capabilities as they fight for business.

Yet this is not happening in a hurry. "There's been a lot of discussion about this move from speed to services and customer experience, but operators are still promoting themselves on the basis of speed," noted Mark Newman, the chief research officer of Ovum's telecoms research business.

That has clearly rubbed off on customers, who largely think of their broadband service as little more than a fast pipe, judging by the results of an Ovum survey of broadband users in 15 countries. When asked by the market-research firm what they would recommend about their service to a friend or family member -- and asked to choose between speed, customer experience, brand and services -- more than 50% of respondents picked speed.

Vodafone, for one, sounds eager to get away from this obsession with the megabit flow. Matt Beal, the operator's head of technical architecture, envisages a time in the not-too-distant future when speed will be irrelevant and customers will not be able to distinguish between network technologies on that basis. "Customers will solely be focused on the service that we render -- its ability to be agile to their needs, and its ability to be relevant and personalized," he told UBB Forum attendees during his presentation.

But is this really plausible? If there's anything the short history of broadband has told us, it's that the relentless consumption of bandwidth has kept telecoms engineers constantly on their toes. Networks and services have always spurred each other's development, and it's hard to see this changing.

It's even harder to imagine after hearing some of the UBB Forum speakers describing the services that broadband networks may have to support in the years ahead. Besides 4K, 8K and even 16K TV, we have artificial intelligence, virtual reality gaming, robotics and remote-control surgery to look forward to. Operators will surely have to continue investing in their networks to meet this demand, and customers who are slow to adopt newer technologies seem bound to get a poorer quality of service than their more adventurous neighbors, as is the case today.

Operators are fond of telling journalists that customers don't care about the underlying technology they only care about their service experience. In fact, operators have made customers care about the technology by emphasizing its importance to that experience. In the UK, note Virgin Media's heavy promotion of 'fiber optics' when BT was still solely reliant on copper, or EE's plugging of 4G while its rivals were stuck with 3G/UMTS.

Mark Winther, group vice president and consulting partner of worldwide telecoms at IDC, another market-research company, even told UBB Forum attendees of a recent conversation he had in Denver, Colorado, with a coffee-shop barista, who expressed an eagerness to get GPON installed at his home.

Of course, if operators have failed to market capabilities other than speed, it's partly because they've made a feeble stab at developing those capabilities in the first place. Most notably, they have struggled to either compete against or collaborate with OTT players. But what are 'branding' and the 'customer experience' other than the final layers of polish?

In the absence of a coherent OTT strategy, operators foremost have to think about their core competence of pumping bandwidth down a pipe. And that's likely to remain as relevant and visible to customers in the future as it is today.

Iain Morris, Site Editor, Ultra-Broadband

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brooks7 10/2/2014 | 11:14:06 AM
Re: Interesting...  

Kb,

 

I would argue in fact that QoverQ growth would occur when they stop trying to be what they are not.  Imagine spending all your time and money on optimizing your network and lowering your costs.  Instead of trying to monetize other people's products just make yours the best that you can.  Simplify the network.  Automate your processes.  Improve your customer service.  But instead we get jealousy ot those who have other skills and business models.  Imagine the money saved if they just fired all their lawyers trying to get money out of the content companies.  The content companies are going to win and fighting it is just costing them money.

 

seven

 
KBode 10/2/2014 | 11:03:29 AM
Re: Interesting... The problem is the push into other markets is driven by the investor obsession with improved quarter over quarter results. Just offering the best damn connection you can at the best price is a win for consumers and probably a win for a company in a sane universe, but not when investor demands dictate that just "doing very well" isn't good enough. I've seen cable companies get into everything from home sales to used cars as a result...
brooks7 10/2/2014 | 10:57:50 AM
Re: Interesting... Kbode,

I am a thin voice in the wind, but I actually think that the ISP business would make a lot more money if they stopped trying to be something other than a dumb pipe.  MSOs, Telcos, Wireless spend a lot of money trying to do a lot of things that don't add value.  They try and fail to become things that they are not.  

seven

 
KBode 10/2/2014 | 10:42:46 AM
Interesting... This is an interesting subject. Most consumers want their ISP to be a dumb pipe -- delivering the best connection at the lowest price. Most ISPs in turn want to be all things to all people, and consistently try to delve into everything from OTT services to home security, even if many of these efforts aren't very good.

I worry that this fear of a dumb pipe syndrome will ultimately lead a larger number of companies toward heavy usage caps and overages, especially once TV and voice (which are just data) revenues start significantly eroding.

I personally WANT my ISP to be a dumb pipe. I don't need anti-virus software, or a fairly-awful Netflix clone.
DHagar 9/30/2014 | 4:27:29 PM
Re: The Perennial Need for Speed Iain, interesting points.  I agree that they have inherently made the technology the name of the game and are banking on those investments in speed and capabilities.  I do think, however, that a company - like Vodafone - can break that mold though by expanding with applied services (maybe like in artificial intelligence) that will deliver a better product/service to the customer.  I think that will unleash demand for something other than speed.
MikeP688 9/30/2014 | 4:24:28 PM
Brief Thoughts On the Future.... One of the key implicit messages is the commodization of this whic we've periodically deliberated here.  The question is, then, what other value-add?   The only thing is content--and original content at that.   This is why the leading lights of Tech (AMZN; MSFT; et. al) are seeing the light (and yes even Softbank that we've had a chance to deliberate this week).    
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