Content providers or infrastructure operators?


I have been thinking about future business models for FTTH networks and I want to write a little bit about horizontal segregation and vertical operation models.

Depending on the countries, traditional operators try to block the development of wholesale operators while in other countries, they react positively.

The difference between them is how they position in the market. The ones that are against wholesale operators tend position as infrastructure operators while the ones that are happy to have wholesale operators tent to position as content providers.

This difference has also implications depending on the situation of each operator in the market. Please, do not forget that telecom operators are also companies focussed on getting maximum revenues.

Traditionally, incumbents and big operators with a lot of civil infrastructure tend to be reductant to the development of a wholesale operator. On the other hand, small and new ISP tend to be very happy with the development of a wholesale operator.Those concepts above are very basic.

For me, the key point is where the money is.

It has been demonstrated that money is in services and applications (ask Apple Inc.) and not in infrastructure or networks. Thus, traditional operators need to start thinking about their business models because it is very unlikely that traditional network operation models will be successful in the future.

I see here a big issue. To develop new access infrastructure, a lot of investment will be required and it is difficult for traditional operators to find a viable business model because they are focused on vertical operation. This means that new applications are required because margins in connectivity services are very tight.

Which is the solution then? I think the solution, specially for the network part is to optimize network resources, and this means wholesale operation so there is no need to deploy several high-speed networks in parallel.


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