Innovation and broadband services

Innovation is key for the development of businesses. We all know and our politicians remind us about this… although they do not support their statements with actions many times. I do not want to enter into politics, but last week, our new government informed that they would cut R&D funding for the next years.

Anyway, let’s go to the topic, which is innovation and broadband services.

Now telecom operators are starting to realize that if they do not innovate and offer novel services, their average revenue per user (ARPU) is stuck.

I would say that connectivity ARPU for residential users is around 30EUR for ultra high speed services and is very difficult to go above this figure. Therefore, if an operator wants to get more money from their customers, they need to innovate and offer new services.

However, I have not detected any offer that is really innovative in our country. The fight is just to offer more bandwidth at a lower price but… do end users really appreciate this? I would say they do not, because once you reach a decent data rate (50Mbps+) the limiting factor is the server side.

So, once we have the transmission capabilities, the next step will be novel applications which accelerate the use of ultra broadband.

I see three sectors where apps can really change the use we do of broadband:

• health
• security
• media

Now, end user main driver is price and not the possibilities they have with their broadband connection. Just power users know the benefits of having fiber at home. For instance, in my condominium, just 4 of 21 neighbors have switched to FTTH. The rest still have ADSL (there are three homes without broadband service at all).

Some advanced media services are starting to appear in the market (netflix and other alternatives) and this generates a new fight between network operators and service providers because the money is in the apps side but as operators have not been innovative enough, internet players have moved faster and are taking advantage of ultra high speed networks to offer really innovative services.

The next will be health, remote learning, security… and will be the topic to be discussed in the next post.

Digital divide in Spain

One of the effects that I expect from happening in 2012 is the increase of the digital divide between high-data rate connected places and those with very poor connectivity.

As I explained in my latest post, we are starting to have ultra fast infrastructures in Spain. As an example, now I have at home 50Mbps down and 5Mbps up, which is much more than what I had at the beginning of 2011 with a poor 10Mbps ADSL service that offered barery 800kbps of upstream data rate.

The fact is that in big cities like Madrid and Barcelona we are starting to have a nice broadband offer. However, in smaller cities and towns this is not happening and will not happen during this year.

Therefore, there is a real risk of creating a very deep digital divide between areas where ultra high speed broadband is present and those which just DSL services are available.

This digital divide affects:

• productivity: many companies are not located in the big cities and there are not many industrial parks with a competitive fiber offer. Also, teleworkers and early adopters that do not live in the cities can not effectively work from home.
• territory cohesion: big differences across the territory generate disputes and are not good to overcome the economic crisis
• lack of innovation: connectivity and fiber networks gain momentum if are massively present, so people can really enjoy of high data rates when they communicate to others with similar connectivity services. If just one end enjoys high data rates, innovation and new application can not be deployed effectively…

among others.

The fact is that broadband services and innovation need to be some of the pillars to overcome the bad economic situation that we are suffering and if we do not start to deploy massively high speed networks that are available to a significative amount of people, it will be difficult to change the productive model of our country.

However, bad news come when man analyzes whether private investment of the big operators can be complemented by the public sector. I can not see this happening, because most of the public governments are finding ways to reduce they expenses and investing on new telecom infrastructures is not a priority for them…

Now we have a new government and their firsts actions they have taken to reduce their budget has been to reduce R+D programs so the next post will be about the contradiction of trying to change our economic model and at the same time do not supporting research and innovation activities…

FTTH in 2011 in Spain

Now that we are starting 2012 it is a good time to recap what happened in 2011 and also predict what will happen in 2012.

2011 was a year of continuity, with small projects being developed (we have helped to develop FTTH in tree small towns) and Telefonica deploying massively FTTH in the big cities (mainly Madrid and Barcelona). ONO pushed hard their “fiber” and are strongly advertising 50Mbps and 100Mbps services (those rates are downstream, upstream is 5Mbps and 10Mbps, respectively).

Telefonica is also offering 50Mbps (5Mbps up) and in December they started to offer 100Mbps to the customers that have also mobile services with the incumbent.

Smaller and local operators are more creative and Adamo, for instance, is offering 100Mbps symmetric services under their coverage area (Asturias and some areas in Barcelona).

I believe that 2012 will be a year where things will evolve in the same way, so we will have Telefonica continuing their FTTH deployments and ONO offering their high-speed DOCSIS-3.0-based services. Municipalities will marginally invest in fiber, as their economic resources will be very limited and this will increase the digital divide between areas where FTTH is present and those which just have DSL technologies.

Thus, we will have a very digital scenario: up to 6Mbps in rural areas (although Telefonica offers 10Mbps through ADSL this datarate is barely achievable) and big cities where CATV and FTTH is present with +50Mbps broadband services.

The next post will be about this digital divide, how we can correct this and what happens if we do not find a solution to this problem. Keep tuned!

Happy New Year 2012

Hi all!!!

This is a quick post, to wish you all Happy New Year 2012 and… to remind you that this blog exists.

I realize that I have not been posting since some months ago because I have been extremely busy. However, one of my objectives of 2012 is to recover the good habit of posting about broadband technologies, so… stay tuned!

4th optixcat workshop

Next Thursday, 10th March we have organized the 4th optixcat workshop. After visiting Vilanova i la Geltrú, Girona and Tortosa, this forth workshop will take place in Lleida.

We had a very good response in the last events and we expect that this forth one will be as good as the previous ones.

Jornada Optixcat Lleida

FTTH Europe Conference and MWC

This week, as you already know, will take place the annual FTTH Europe Conference. This year the place is Milan.

Unfortunately, I will be unable to come. This will be the first time that I miss it in the last seven years.

The reasons for my absence are the fact that we have several projects that need to be finished this week and also that next week we have a major event in Barcelona: the Mobile World Congress.

Topics of both conferences are somehow uncorrelated, but this year I have chosen to be in Barcelona and develop more deeply MWC.

Thus, if you want to meet me, you already know where I will be.