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:
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.