Fit-for-purpose broadband

Martin Geddes www.martingeddes.com December 2013

Speed sells

The broadband industry promotes its offer based on peak burst speed as a proxy for good QoE.

Investment is focused on driving up capacity and peak speed.

Market regulation rewards increased speed, both for individual operators as well as countries.

Is ‘speed’ what customers really value?

Whilst capacity is necessary, it is not sufficient, since peak burst speed is a weak proxy for QoE.

Indeed it can in extremis be counter-productive, as high-speed offers lack loss & delay stability.

Examples: SFBB is worse for gaming than basic DSL; cable has high delay variability; 4G is worse

than DSL for many apps; fibre is gated by WiFi quality; small cell backhaul remains problematic.

The market is evolving beyond speed to user-centric offers – e.g. EE’s ‘no buffering’ ads for 4G

video. There is unmet demand for trustworthiness, dependability, reliability, and convenience.

Regulators, political stakeholders and investors are questioning whether they are getting their

return on investment in ‘speed’. (I gave a workshop on this last month at ITU Telecom World).

The telecoms industry has not covered its cost of capital any year this century (source: PwC).

Is our broadband supply offer fit-for-purpose to meet demand?

The market is moving towards ‘fitness-for-purpose’

“This model indicates that the median household will require bandwidth of 19 Mbps by 2023, whilst

the top 1% of high usage households will have demand of 35-39 Mbps. These speeds are lower than

those previously cited regarding future capacity needs…”

—Broadband Stakeholder Group, preface to “Domestic demand for bandwidth”, November 2013

“Their key underlying principle is that it is not necessary to have such high speed capacity available

everywhere at all times; it is enough if the device or appliance which is using the connectivity finds

that it is not constrained in its demands by the network infrastructure in place.”

—Institute of Engineering & Technology, “Demand Attentive Networks (DAN)”, November 2013

“Actual experiences of connectivity can be poorer than population statistics suggest”

—Ofcom in 2011 (Ofcom are looking at how QoE can be directly measured.)

“…consumers also need to know if they are getting Champagne or lesser sparkling wine.”

—Neelie Kroes, Vice-President of the European Commission

The money has already spent on ‘speed’, and there is demand for more money. Whilst the technical

promises have been fulfilled, the political and economic benefits of broadband are widely perceived

as having fallen short of expectations. Is there a deeper structural problem we are not addressing?

Do you observe and expect a switch from a supply-push to a demand-pull model?

Is the way we package, promote and price broadband suitable for the future?

If not, what needs to change for the offer to be fit-for-purpose?

What does that mean for you, this event, and our industry?