While traveling to visit a customer in North Africa, I was reviewing in detail the CMT report about the viability of the deployment of FTTH networks, their assumptions for the study and their conclusions.
I found two points, which I believe are unlikely to be corroborated. Those are related to service penetration and the type of services that the end user will subscribe to. I am also preparing another post aboust business models because I have found that CMT is just focussed on vertical operators and they are not taking into consideration open access networks.
Anyway, on the report they expect 46% penetration in pay-per-view TV and 50% penetration of premium services in the big cities (Madrid and Barcelona). Let me disagree with that.
The first question related to TV in 2023 is… are we going to watch TV in the same way as we are at present? I think we will not. I am not a guru in TV services, but what I predict is something like YouTube HD videos to be streamed and displayed on the TV set in the dining room so we can watch what we want, when we want… Just live events (football matches, F1,…) will we delivered in a similar way as at present… Maybe we have to pay, but not on monthly fee basis, but per stream (similar to iTunes). Maybe, in 15 years we have 3D TV… who knows… We have also to take into account that the digital generation will become parents and this means that their habits will differ from ours.
The second point is related to premium services… I think the study overestimates the penetration of premium services. To predict 50% penetration in very high, taking into account that just power users will get those services, and frankly, Spain does not have 50% of power users in big cities. This, for me, is critical because many business models of FTTH networks fail due to incorrect prediction of premium services, which are the ones that increase the average ARPU.
My opinion is that the service that FTTH operators have to offer is CONNECTIVITY so others can offer the services (video, voice, whatever-will-come-in-the-future,… but this is just an opinion…