The AT&T–Time Warner deal: what’s pushing telcos to invest in content?


Yves Gassot,
CEO, IDATE DigiWorld

AT&T had only barely begun integrating DirecTV – the second largest pay-TV provider in the US, behind Comcast – when it announced its plans to acquire Time Warner for more than 85 billion USD (over 105 billion USD including debt).

This is no small chunk of change, as the company had to pay top price for a media conglomerate that is in fairly good shape and boasts a large stable of assets, including major Hollywood studios, the country’s top pay-TV channel, HBO, and several other cable properties such as CNN and TMC. The appeal of these assets has attracted a number of suitors since the spin-off of Time Warner Cable, including Apple.

A less welcoming environment

To assess the rationale for the deal, we should first give a bit of background.

First, we should mention the very abrupt slowdown in the mobile services market in the United States. If AT&T (like Verizon) is a colossal enterprise, with more than 110 million mobile subscribers in the US, the market has become far more difficult following aggressive moves from T-Mobile and Sprint, and as consumer equipment matures. AT&T had sought to anticipate the change by merging with T-Mobile, but the FCC and antitrust authorities quashed the deal. As in Europe, intense competition is weighing on mobile operators’ margins, while the explosion in traffic is still hard to monetise and telcos will need to keep investing heavily in their networks to keep up. On the other side of the equation, the applications generating this explosion in traffic are largely the product of Internet behemoths such as Google, Amazon, Facebook and Netflix.

Second, in those locations where it is a wireline telco, AT&T is having to contend with cable’s growing dominance (66%) of the Internet access market. For several quarters now, AT&T, Verizon and the country’s other telcos (Frontier, Century Link…) that offer connection speeds over 50 Mbps in only a small handful of locations, are losing customers to cable and its ability to deliver increasingly fast connections, thanks to DOCSIS 3.1 – giving it a steadily growing subscriber base and market share. Plus, the top cablecos appear resolved to enter the mobile market, with the belief that “mobile is the new cable!".

Lastly, we need to remember the remarkable success of the deal that led the number one cableco, Comcast, to acquire another TV and movie industry giant, NBC Universal, back in 2013.

How will it maintain its cash-flow?

AT&T does not have that many options for maintaining its cash-flow and dividends.

It is forbidden to engage in mobile market mergers. Of course, it can count on 5G to accelerate and widen its lead over T-Mobile and Sprint, as it managed to do (alongside Verizon) with LTE at the outset. But this lead would only last around 18 months.

Acquiring cable companies could open up certain prospects – as the cable market’s consolidation is not yet complete – but will only be allowed in those areas where the carrier has no footprint.

International investments are still on the menu, with the acquisition of two mobile operators in Mexico in recent years. And even if growth in more or less every telecom market is sluggish, AT&T did also have its eye on opportunities in Europe, and later in India… But, like Verizon, AT&T has been focused largely on its domestic market for more than a decade.

It is true that the acquisition DirecTV is considered largely a success. It creates national cross-selling opportunities between mobile subscribers and satellite customers. DirecTV’s roughly 20 million subscribers bolster the company’s negotiating cloud in Hollywood, well above what it had with its 5 million U-Verse subscribers. With DirecTV, however, AT&T was still just a distributor and so sensitive to the slow but sure cord-cutting trend.

A deal that equals both vertical integration and diversification

So the acquisition of Time Warner would change all that. It would allow AT&T to move one or two notches up the programming value chain, positioned in both TV network operation and the production of premium TV series and films. The new AT&T would thus have a very impressive strike force on the content front, powerful enough to fuel its ambitious DirecTV Now TV streaming project.

This does not mean that AT&T is putting all its eggs in the vertical integration basket. It would be foolish to monetise its films, TV programming and channels only through its own fixed and mobile broadband services. So the deal can also be seen as a diversification move. AT&T has no doubt concluded that, more than ever before, content is indeed king.

We would be wrong take away from this merger the idea that is the pipes that govern broadcasting and content. The new understanding is more that, now that we can watch TV, live or in VOD, through a good quality streaming service, competition at the connectivity level will become more efficient, net neutrality rules will rein in the most direct attempts at discrimination… so it is not the pipes but rather the programmes that will be the decisive factors. Along with data on Internet users’ behaviour and habits.

Telcos do have several cards to play when it comes to the TV and video market. Cards that could allow them to stand out from other telcos, open up cross-selling opportunities, secure customer loyalty… When going head to head with the Internet titans, acquiring TV rights to sport and amortising investments in premium productions will nevertheless be possible only for the wealthiest telcos, with the most ambitious video strategies and tens of millions of subscribers. Like AT&T.

How will antitrust authorities react?

It remains to be seen how the Department of Justice (DoJ) and the FCC will react: they could oppose the deal or impose conditions. AT&T will argue the precedent of the Comcast-NBC merger, and the fact that no media or telecoms industry player would be eliminated or have its market share altered. Industry players and politicians that are against the merger will point to the dangers of having the country’s largest carrier get its hands on one of the largest media conglomerates. Others will see opportunities to strengthen provisions for increasing transparency on ISPs’ use of consumer data, and to expand net neutrality rules.

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Total SDN and NFV market valued at 19 billion EUR in 2020


Tiana Ramahandry
Senior Consultant, IDATE DigiWorld


A mini share of the global telecom and IT equipment market, but a maximum impact on the networks’ capabilities


72 telco SDN/NFV projects benchmarked

The latest IDATE report – “State of the SDN/NFV market” – spotlights the main pioneering players in terms of SDN/NFV implementation, and what they are doing today. The report provides a separate dataset with 72 detailed project fact sheets as of August 2016, as well as an analysis of major stakeholders – telcos and vendors – and their strategies to evolve and transform their networks to a software-based infrastructure.

“These projects are at different stages, ranging from trial to deployment, but a few (36%) have achieved a commercial launch. Whatever their level of development, most of these projects are taking place in developed countries: Europe, the US, Japan, South Korea and China,” says Tiana Ramahandry, the report’s project leader.

SDN/NFV projects per status


Source: IDATE DigiWorld, State of SDN/NFV and network investments, September 2016

Telcos’ adoption of SDN and NFV over the long term

IDATE DigiWorld analysts provide SDN/NFV market sizing data, with coming investment forecasts up to 2020. Even this market, which is expected to reach almost 19 billion EUR by 2020, remains very marginal compared to the telecom and IT equipment market, which itself is estimated at over 300 billion EUR, transformation potential in network management will be huge, as will telcos’ opportunities to adopt new services and innovative business models.

While a modest part of the global SDN and NFV market will be captured by telcos in 2020, NFV is being implemented more and more with the growing number of cloud and SDN solutions being introduced for new business services. Telcos’ large-scale deployments are expected to begin in 2016, and their CAGR over the next five years is projected to stand at 47%.

Indeed, the vast majority of the market will come from enterprises and cloud service providers that were the first to adopt SDN for use in datacentres, for both internal operations and connections with other datacentres.

Discover the perspectives,  key trends, and scenarios about "SDN & NFV market" and contact Tiana Ramahandry for further information.
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World television market: OTT services keeping American players in the lead


Florence Le Borgne
Head of the TV & Digital Content Practice, IDATE DigiWorld


“For the first time ever, an OTT company – Netflix – made it into the world’s 20 top earning media groups in 2015.”


The United States: global OTT market leader

Still overshadowed by Netflix, which is present in 190 countries, and iTunes with services in 112 countries, Amazon is steadily building up its global OTT footprint through its e-commerce platform.

American OTT video services’ global footprint as of 31 December 2015



Source: IDATE DigiWorld, World TV market, July 2016

The United States: world’s largest OTT video market

With the exception of Starz, which lost 900,000 subscribers between 2014 and 2015, the top premium cable channels in the US continue enjoy a steady increase in subscriber numbers, and this despite stiff competition from OTT services. Between 2012 and 2015, HBO reported a 16.4% increase in subscribers to its linear channel, while Showtime and Starz reported a +1.3% and +0.7% increase, respectively.

But the momentum for signing up new customers is clearly with OTT services. During that same period, Netflix paying customers grew by 70% while Hulu Plus subscribers rose by an impressive 269%.

The top OTT services’ subscriber numbers in the United States in 2015 (million)


Source: IDATE DigiWorld, World TV market, July 2016

With its extremely dynamic national market, populated by consumers who are willing to pay for their TV content, the United States has become the world’s largest video on demand (VOD) market. Thanks to the popularity of Netflix, as well as Hulu Plus, Amazon Prime Video and more recently HBO Now, the US singlehandedly accounts for 57.5% of global VOD subscription revenue. If download to rent/own (DTR/DTO) are less popular with American viewers, the country still accounts for 47.8% of all DTO and DTR revenue.

Also noteworthy is that the United States continues to generate more than half of the world’s pay-TV revenue.

But the North American market is also showing the first signs of flagging, while growth in other parts of the world is progressing steadily.

Popularity of on-demand viewing in the US providing a global springboard for local players

If OTT services have not been adopted to the same extent in other parts of the world as they have in the United States, viewers across the planet are watching more and more on-demand programming and less and less live TV.

Although the balance between the two still tips heavily in favour of “classic” linear TV programming, which accounts for 86% of viewing time in the US, it is by now a foregone conclusion that VOD is not a passing phase, nor confined only to millennials.

Consumers in Europe, as well as in South America and in certain Asian and African markets, are also embracing OTT video. If national services have developed in most corners of the world, very few have managed to hold their own against the global juggernauts that are Netflix for SVOD and iTunes for DTO and DTR.

It does indeed appear that series are the main incentives for signing up for SVOD services. Which means the ability to attract new subscribers and keep them depends on being able to offer exclusive, high quality programming, which is something few players can do.

Netflix became the world’s second largest investor in programme production and acquisition in only a few years, outdone only by sport channel ESPN. Netflix spent 5.8 billion USD on content acquisitions and original productions in 2015, compared to the 5.5 billion USD that ESPN spent on acquiring TV rights and HBO’s budget which is estimated at 2 billion USD. At the same time, the company’s spending on original series continues to rise. Netflix invested 120 million USD in 2016 on its new series, The Get Down, or 7.5 million USD per episode, which makes it the new American titan’s most expensive show to date, ahead of Marco Polo which had a budget of 90 million USD.

But growing budgets coupled with slowing growth at home are making the search for outlets outside North America imperative. Clearly, the wealth of its library is one of the main reasons for Netflix’s global success, although international development costs and especially marketing costs are in no way detracting from the company’s profitability.

If Amazon and HBO are following, albeit more discreetly, in Netflix’s footsteps, it is hard to see what European player today could rival them, and most are put off by the size of the investment required and the meagre prospects for ROI in the short term. Vivendi appears to be struggling to build a pan-European offering, while Sky is advancing cautiously with plans to launch its Now TV streaming service in Spain by the end of the year, which would make the country the only market where it only sells an OTT product, with no satellite service to back it up.

The TV market did not enable the emergence of any major pan-European service. Will OTT give Europe’s industry a second chance?

To find out more about our forecasts for the TV content market and the future of television, read our latest report or contact Florence Le Borgne

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The global revenues from telecom services will grow from 1,174 billion EUR in 2015 to 1,293 billion EUR in 2020


Didier Pouillot
Head of Strategies Telecoms Business Unit , IDATE DigiWorld

With revenues from mobile services as principal growth engine, which will grow by 14% between 2015 and 2020 (+2.8% per year on average), and reaching 814 billion EUR in 2020.


With global penetration more than 100% in 2014, subscriber growth is expected to gradually slow down over the next few years. The number of fixed Internet subscribers is increasing at roughly the same pace, but customer numbers are eight times smaller. The one billion mark is not expected to be reached before 2020 and traditional landlines continue to loose ground as VoIP and mobile gain ground.


The spread of broadband

the number of fixed broadband subscribers is expected to reach 1 billion worldwide by the end of 2019. The number of LTE customers is shooting up, with services based on carrier aggregation no longer being limited to just the more developed countries.
Three major factors will play in favour of the spread of broadband:

The success of bundled offers (fixed telephony, VoIP, TV, mobile telephony) and the appetite for video applications.

The investment of telecom operators in the migration of their infrastructures to mobile or fixed broadband.

The comfort provided by ultra-fast mobile broadband and the new uses it enables.

Revenue from telecom services

The global revenues from telecom services will grow from 1,174 billion EUR in 2015 to 1,293 billion EUR in 2020, representing an average annual growth of 2.0%.

• Revenues from mobile services will grow by 14% between 2015 and 2020 (+2.8% per year on average), reaching 814 billion EUR in 2020.

• Revenues associated with data transmission and Internet will grow more strongly (+21% between 2015 and 2020, i.e. +4.3% per year on average), to reach 344 billion EUR in 2020.

Revenues from fixed telephony will continue to decline significantly (-23% between 2015 and 2020, i.e. a decline of 4.6% per year on average), to be at 135 billion EUR in 2020..

Disparate performances from operators in emerging countries

Top telcos in emerging countries continue to suffer from a sudden halt in value growth. China’s three operators in particular have seen virtually no progress: China Unicom actually reported a 3% drop in revenue. Their margins are come in line with industry standards: between 30% and 40% of EBITDA margins.
Several of these operators are actively engaged in an international expansion into Africa and Latin America, but also into advanced markets, particularly in Europe.

European operators starting incrementally to get back on track

Telcos in Europe are back on a growth path. If most of the top carriers are still reporting decreasing revenue, some are seeing an increase, notably Deutsche Telekom, Telenor and to a lesser extent Orange, thanks to their international operations. Their spending on LTE and superfast fixed access networks (FTTx) has not yet paid off and helped to bolster ARPU.


Discover the perspectives,  key trends, and scenarios about the telecoms market for the next decade through our dedicated report or Contact Didier Pouillot

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Digital Innovation & Finance Transformation, Interview with Olivier DUCHENNE & Sophie EOM


"Digital Innovation & Finance Transformation"
DigiWorld Economic Journal n°103

Interview with Olivier DUCHENNE & Sophie EOM
Co-founders, Solidware

Conducted by Jooyong JUN

C&S:  Please make a summary presentation about Solidware.

Olivier DUCHENNE & Sophie EOM:  We (Solidware) build Machine Learning-based predictive models for finance companies. They need a predictive model for their business as they are related to various kinds of risks, such as underwriting, product offering, or customer retention if we name just a few.

Many financial companies already have the enormous size of valuable data. Their risk management system, however, has been mostly based on a simple model, which hinders their ability to fully utilize the data as it is plagued with many human assumptions and biases. As a result, financial firms fail to maximize their revenues while consumers pay more for loans and insurance premiums.

With our machine-learning based data analytics solution, DAVinCI LABS, we analyze clients' data and find the best combination of different machine learning algorithms such as deep learning to generate the most accurate risk prediction as far as possible, without wasting any information in the data. In all, we help to find and minimize risks, and eventually generate significant additional values.

A lot has been talked, but few success stories were observed in machine learning (ML) and FinTech at this point. Which area of finance do you think is best-suited for machine learning? (e.g. credit information discovery, robo-advisor, failure or default prediction), and which is not?

(Sophie) At this point, credit scoring is best-suited for ML. Robo-advisor does not necessarily work well because more often than not the amount of data is insufficient. It is also far harder to predict the market.

How far can ML replace the implicit knowledge that banks have and use in relational banking? What do you think the role of human traders/investors/analysts will be like in the future after the widespread of ML in finance, if there is any?

(Sophie) Humans will be able to spend more time building better "strategies" based on the insights extracted through machine learning, rather than trying to spend time extracting insights from themselves.

If every financial firm and/or investor uses FinTech services based on the similar ML algorithm, would not it homogenize the financial system and increase systematic risks?

(Sophie) I want to emphasize "No free lunch theorem". There's no single algorithm that works the best for all cases. Moreover, different datasets will give different results.

From your experience, what do you think would be the value of social networks' data or publicly available data, which are claimed to be used by many FinTech lending firms for the credit evaluation of an individual at this point? What do you think it would be like in the future? Is there any difference between individuals and firms?

(Sophie) Social Network Service data is biased, not complete, and usually difficult to match with target variables such as default and fraud probability that financial companies are interested in. In my opinion, it is not really worth spending time and resources to use SNS data for our business at this point.

If most of the financial market participants use ML, decision makings may become more homogeneous. Would not it worsen the probability of systematic risks such as a (bank) run?

(Olivier) I think if everyone has the same data, the correlation of decisions will increase with adopting ML. However, individuals, companies, and organizations have huge amount of private data now and will collect more in the future. As we said before, machine learning applied to different datasets will not lead homogeneous behaviors among financial market participants.

Many economists are still reluctant to adopt ML and big data because ML finds correlations in big data while not identifying causality which is important for policymaking. In your opinion, how can we use ML for policymaking decisions?

(Olivier) Well, I am not very familiar with the application of ML to social science and policymaking. In my opinion, for many cases, the data may not be "big" enough to justify the use of ML. Those applications require supervised machine learning, which implies that you need to already know which option is "more correct" than others. Still, ML may be useful if we know the underlying mechanism, the policy making decision is very specific (e.g. fine tuning of sales tax rate or interest rates), and there exist sufficiently big data for the process.

What are the barriers which may handicap the ML usage in banks and financial companies (potential impacts on the employment, regulation, etc.)?

(Sophie) I think one of the barriers is that banks and financial companies have to "explain" the result of their predictions to their customers and regulatory authorities. For example, if a bank rejects to give out a loan to a certain individual, that individual will ask the bank why, and if the bank does not provide a clear answer, the customer may file a complaint to the government, which will be a big trouble to the bank. However, ML is like a black box and it's difficult to explain logics behind prediction results.

What is the difference between desired objectives in computer science and in finance when it comes to applying machine learning?

(Sophie) In computer science, it is about finding the algorithm that beats the state-of-the-art, world-best one at the moment. On the other hand, in finance, it is about finding the explainable algorithm beating the incumbent models while working fast enough.

You had a choice to start your business either in France or in Korea. What factors affected your decision making?

(Olivier) First, compared with France and other EU countries, starting a company in Korea requires less complicated processes. Taxes and other regulatory burdens are also lighter in Korea. Second, compared with the US and the EU, compensation costs for engineers in Korea are lower. Third, the level of competition in the Korean market is also lower.

What are the points that you might emphasize in managing a company with people from different countries (France, Korea, Russia, and Sweden in Alphabetical order) and cultures like Solidware?

(Sophie) The common language must be English (Very important) all the time. All official documents and all talks are done in English. We emphasize task-based management. No hierarchy. (Olivier) Some of our engineers are not very comfortable with speaking in English, but they can communicate well with writing.

Do you want to stay specialized on the financial sector? For example, is there any room in your vision for a business model in which you would license your ML technology to banks and insurances? Who is your more relevant competitor?

(Sophie) We're trying to be more vertically integrated in the financial sector. That is, we are trying to adapt our solution to specific forms of datasets that financial companies often use. Potential competitors may be financial companies which are our clients as of now, if they try to build their own machine learning system.

How do you see the future of your company?

(Sophie) Bright! (Olivier) The market for ML application in finance grows fast in Korea and our revenue also does. Second, big names in ML such as IBM and Palentir are in the market, but their performance here is not on par with their reputation. We can cover more tailored and specified needs of our customer companies. As Sophie mentioned, potential competitors may be financial or credit information companies which want to internally have both data and technologies. Personally, I think it requires quite a long time for them to have both.

More information on DigiWorld Economic Journal No. 103 "Digital Innovation & Finance Transformation" on our website

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The Mobile Ecosystem’s Evolution


Vincent Bonneau,
Project Leader, IDATE DigiWorld

Benefits and impact on mobile industry competition of Android and iOS

Have mobile OS helped create a mature and more open mobile ecosystem?

The study, commissioned by Google, illustrates the paradigm shift in the mobile industry introduced by iOS and Android, due to decreased fragmentation. It analyses the clear benefits that new OS bring to the digital economy, with more affordable and more powerful devices, and providing access to a host of applications and services. Lastly, it assesses the impact that new OS have on competition, arguing that they have not reduced consumer or developer options, and have actually enabled the rise of new players (Samsung) and even of major competitors such as Facebook.

iOS and Android have helped to reduce fragmentation in the mobile industry and so were quick to attract developers.
 iOS and Android are the real driving force behind the rise of the smartphone and mobile Internet markets, where previous attempts with WAP and walled gardens failed.
 This has led to a thriving mobile app economy in Europe, with close to 1.5 million jobs and 13 billion EUR in revenues (paid apps, advertising) in 2016.
 We have seen a great many success stories independent from iOS and Android, especially in the mobile gaming industry (e.g. Rovio’s Angry Bird) or around Facebook.
 Competition is stronger in the device market than before the launch of iOS and Android. Android has even opened the way for newcomers thanks to low prices.
 Developers are using multiple platforms, especially by leveraging cross-platform tools.

> Download the White Paper


A looming trust crisis in digital?


Jean-Dominique Séval,
Deputy CEO, IDATE DigiWorld

Vincent Bonneau,
Director of Consulting and Innovation, IDATE DigiWorld

Our faith is clearly being tested these days. There is a growing sense of mistrust amongst the electorate,  users and consumers, but digital could be an exception?


At first glance, the answer appears to be yes: digital technologies continue to spread just as quickly and to penetrate our lives more and more deeply, as they make their way into sectors that had not yet embraced the digital path: sectors as diverse as transportation, healthcare, education and travel are making the leap as they feel the pressure of mobility, Big Data, artificial intelligence (AI) and the Internet of Things. So it is imperative that we have a firm grasp of the risks surrounding hyper-connectivity, to prevent the hopes of growth attached to this digital revolution from being dashed.

The heyday of the Privacy Paradox

However paradoxical it might be, the digital universe has not been spared its own crisis of faith. Everyone knows, more or less, that the new services on offer are not perfect: 60% of Internet users do not trust the Internet as a whole. A level of trust that deteriorated, in fact, between 2011 and 2015 for online banking, e-government and e-commerce. Only social media’s trust levels are rising, but only up to 43%, and topping out at 35% when it comes to cloud services. (“Digital Trust Barometer for France” ACSEL-CDC by IDATE DigiWorld, 2015).

At the same time, it is impossible not to see that this lack of trust is in no way impeding consumption. We have agreed to hand over our personal data in exchange for free services on our favourite social networking sites, fully aware that this information is being exploited for commercial purposes, and believing that it’s just “the price we have to pay”. We now accept that our new (and quite expensive) connected objects will utilise increasingly private information in exchange for services which, however promising, are still far from perfect. The latest statistics are not reassuring: cyberattacks rose by 38% around the world in 2015, and by 51% in France (PWC survey). As a result of this hacking plague, more than 700 million data were lost or stolen in 2015 (Breach level Index). It is both the frequency and the scale of the attacks that are striking: in early 2016, 80 million dollars were robbed from the Bank of Bangladesh. But it is still surprising that, if piracy is hurting the reputation of the company’s that have been the victims of it, the consequences ultimately stop there: no enterprise has yet been destroyed by a cyber attack, no matter how widely publicised it was.

And here is the crux of the paradox: the extraordinary acceleration of Internet services, with the GAFA quartet at the helm, their new challengers (Netflix, Airbnb, Tesla and Uber) and the multitude of start-ups in their wake, is playing out in a climate of latent mistrust.

The digital planet under pressure  

What does the next chapter have in store, at a time when sensors are tracking our various actions (locating and monitoring our info and movements in real time), mapping our behaviour using AI and predictive techniques? Our computers and phones, and soon our driverless cars, our connected doorways and electrical outlets… are relatively easy to hack. Even blockchain, despite is reputation of being unhackable by design, is suffering its first failures: a hacker managed to siphon 3.6 million ethers, or 46 million euros in  Ethereum cryptocurrency, from its DAO fund.

Will we continue on the current trajectory of a tricky imbalance, where innovation wins out over trust and security issues? Or will the change in scale and the sensitivity of the data used by third parties (well beyond the socio-demographic data being shared today) force a real change in the arena of trust? The debate is far from over*. And a new balance will be established depending on the responses that users, public policymakers, hardware suppliers and service providers offer or manage to impose. The stakes are high as very different Internets could emerge, depending on the collective choices that are made. One of the key hypotheses of our “Digital Economy 2025” scenarios is based on accessing data that users share with third parties, and in accordance with local laws. If access remains open, as it is today, we will likely keep the current Internet: one that is dominated by veteran heavyweights (along with a few newcomers from Asia or the retail sector), and characterised by the rising use of new generation predictive applications, integrated virtual assistants and recommendation tools.

If, on the contrary, we are forced to deal with a crisis of faith, which is indeed possible, an entirely other Internet would emerge, one where data exchanges are confined to trusted third parties and players whose prime concern is security (banks, telcos, etc.). This would trigger a technological arms race aimed at guaranteeing users’ protection (biometrics, encryption…), as well as a legal battle to limit the ability to exchange data outside sector-specific silos (insurance, transport…). How we answer the question of what new ecosystem will the right one to manage our most private information, health-related data, genome data, for instance, will be key in shaping the next chapter. This is thus a crucial challenge for Europe, as it could mean an opportunity to regain control of its digital destiny.

*A debate that will be one of the focal points of the upcoming DigiWorld Summit, devoted to the theme of “The Digital Trust Economy” (15-17 November 2016)

This Viewpoint was published in Les Echos on 23 September 2016

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DigiWorld Summit: The Digital Trust Economy


Debate over the crucial role that trust will play in the digital economy’s future


The 38th annual DigiWorld Summit will run from 15 – 17 November 2016, and have as its central theme: The Internet of Trust. It will be an opportunity to engage in a meaningful international debate over digital trust issues – starting with security and privacy – which have become major sources of concern for all of the ecosystem’s stakeholders.

As the number of reported cyber-attacks worldwide is growing by close to 40% a year, we expect that upcoming stages in digital technologies’ evolution will only amplify the phenomenon. And this to such an extent that any future scenario is possible: from a continuation of the current chaos to a breakdown in trust that would lead to the construction of a new digital economy, which will no doubt differ in many respects from the one we know today.=

Are we reaching a tolerance threshold for online trust?
How can veteran digital industry players (equipment suppliers, telcos, IT companies) capitalise on the current climate?
Are verticals threatened by the situation or, on the contrary, on the winning side of trust and security issues?
Do we need a new regulatory framework to govern, or reassure, market players and consumers?

> Including the 120 speakers on this edition:
•    Anne BOUVEROT, CEO, Morpho
•    Isabelle FALQUE-PIERROTIN, Chairwoman, CNIL
•    Pierre, CHAPPAZ, Co-founder & Executive Chairman, Teads
•    Didier LAMOUCHE, President & CEO, Oberthur
•    Joseph LUBIN, Founder & CEO, ConsenSys, Co-Founder Ethereum
•    Carlos LOPEZ BLANCO, Global Head, Public and Regulatory Affairs, Telefónica
•    Stéphane RICHARD, Chairman & CEO, Orange
•    Corrado SCIOLLA, President Europe, BT Global Services
•    Nicolas SEKKAKI, CEO France, IBM

Choosing the theme for the 2016 DigiWorld Summit came about quite naturally. The vast majority of IDATE DigiWorld were eager to tackle the topic of trust.
For some time now, trust has been recognised as a vital ingredient in the success of a brand, an economy or a society. This is all the more true in a world being transformed by digital innovation. In its scenarios for 2025, IDATE DigiWorld underscored that trust was one of the key variables in tomorrow’s digital ecosystem. To shore up this belief, we need only look at some recent headlines:

•    the cyberattacks against telcos, TV networks and government agencies,
•    the legal wrangles between Apple and WhatsApp and government authorities wanting access to the encryption key for the devices or messages;
    the very drawn out European Union negotiations over new data protection rules;
•     the end of the Safe Harbor transatlantic agreement and ensuing debates over the new Privacy Shield;
    questions over the dangers surrounding connected/driverless cars, and the growing ubiquity of the IoT in general;
    the ad–blocking phenomenon;
    questions over what impact multiple FinTech solutions will have on the soundness of the banking system, and blockchain’s ability to replace today’s trusted third parties;
So trust is a focal point for telcos, cloud computing companies, Internet giants, start–ups, governments and regulators, but also for every economic sector across the board, not to mention consumers and citizens.
And, as always, acknowledging risk must not prevent us from also analysing opportunities, in terms of innovation, differentiation strategies and the competitive advantages available to many market players.

Once again this year, the vital meeting place that this international conference has become, will include plenary sessions that will provide a springboard for a series of high–level specialty forums.  These forums are an opportunity to delve deeper into the main trends we expect to see in mobile networks with the advent of 5G, ultrafast broadband, the Internet of Things, the TV market’s transformation in Europe, FinTech, video games, the digital promise in Africa and what makes a smart city.

A unique international forum for debate and networking

> DigiWorld Week
A week devoted to understanding what makes our new digital world tick (12 – 20 November 2016)
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Key facts & figures

Europe’s trailblazing conference on the digital economy

The DigiWorld Summit is an annual event organised and hosted by IDATE experts, with the support of DigiWorld Institute members. Every year it holds ultra high-level international debates on the core issues shaping the digital economy, with the finest speakers and industry insiders.

Participants: 1,200 participants at the DigiWorld Summit and more than 5,000 at DigiWorld Week
Speakers: 120 speakers from around the world; 400 at DigiWorld Week
Partners and sponsors: over 100 partners and sponsors (businesses, public sector, media…)
Social media: 15,000 tweets (trending topics) and 2,000 live followers

For more information, visit our website: www.digiworldsummit.com

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DigiWorld Research Market Watch Service


Yves Gassot,
CEO, IDATE DigiWorld

How to keep up with the fast-paced changes in our industries without being buried by the avalanche of news which, every day, urges us to read about some new important disruption? On a more practical level, how to gain access to vital data, benchmarks and preliminary independent analysis to begin planning a project or considering a market?


Thanks to its teams of highly qualified consultants and analysts, IDATE DigiWorld is able to deliver a complete set of telecoms, Internet and media market watch services.

I hope you’ll allow me to use this month’s editorial to highlight how invaluable these services can be, taking as examples three reports on timely and crucial topics that were published by our teams this summer:

How much importance should be given to pioneer user experiences and the first LTE plans for fixed services? This report that was just published by Carole Manero ("LTE for fixed access: the next big thing ?") takes a look at the factors that make for a more credible solution after the failures of LMDS and WiMAX… but also taking into account Google’s recent announcement that it could be scaling back spending on Google Fiber projects in the US, to focus instead on wireless solutions, and the news that AT&T and Verizon do not have the national carrier status when it comes to deploying LTE or even 5G fixed wireless products, based on early trials.

Sport: live TV’s last bastion? Florence Le Borgne seeks to answer this question in her report entitled, ("Sport content: TV vs. OTT") – analysing the impact of skyrocketing TV rights resulting from competition between TV networks, competition from VoD and the Internet giants’ growing ambitions.

Should we expect an end to telecom market consolidation in Europe? In his report ("Telecom consolidation in Europe: toward new challenges?"), Christoph Pennings takes a look back at in-market mergers and acquisitions of recent years, and explores the paradigm shift created by (notably fixed-mobile) convergence deals, but also policy changes coming out of Brussels.

I could just as easily have cited several reports that are currently in the final production stages, on IoT, Industry 4.0, the new generation of LEO satellites, blockchain, FTTH rollouts around the globe… For more information about these upcoming reports, and our complete catalogue, visit the IDATE DigiWorld website, or contact our head of sales (j.george@idate.org) or the consultants listed earlier.

PS: -"Yves Stourdzé, explorateur et éclaireur des mondes à venir": Some of you may have noted that IDATE’s headquarters are located on "allée Yves Stourdzé". Yves, an academic who was appointed Director of CESTA (Centre for the Study of Advanced Systems and Technologies), was among those who believed in IDATE’s development and supported us in our early days. Following a symposium in Paris on his work, held at the Ministry of Research, I urge those of you who are French speakers to acquire the book entitled: "Yves Stourdzé, explorateur et éclaireur des mondes à venir" – providing insights into the man and analysis of his work, through contributions from 25 personalities. This same publisher (Sens & Tonka, www.sens-tonka.net) will also be soon releasing a new edition of the main works of Yves Stourdzé.


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LTE has gone mainstream: 1 billion subscriber mark exceeded at year-end 2015


Carole Manero
Director of Studies, IDATE DigiWorld Contact

Fixed LTE will be definitly part of the game: by the end of 2020 we forecast, overall, almost 5 billion LTE SIMs worldwide or 78% of total SIMs.


The fixed-mobile convergence has been trending for years. The opportunity to use LTE and its evolutions as a solution for providing high-speed Internet access at fixed locations has raised generated much interest in the last two to three years.

The use of LTE for fixed access makes sense. The elements to make adoption possible are there. Throughputs delivered over LTE are on par with fixed ones or are expected to be on par in the medium term. Population coverage is almost universal and will continue to increase to cover hard-to-reach areas. LTE fixed monetisation without any data caps is another valuable asset. All the lights will be on green when coverage reaches rural areas thanks to low spectrum use or to government push.

On the technological side, fixed LTE holds many virtues over WiMAX, satellite, mobile LTE or XGP/AXGP technologies even if there are no real specificities to fixed LTE when it comes to standard.

• Fixed LTE networks are basically just LTE networks addressing fixed users. Fixed LTE retains mobile LTE advantages in terms of throughputs/capacity and latency. Population coverage is likely to remain a weakness. It is not really a different technology from mobile LTE but it is to be implemented in very different ways when it is provided as a fixed-only technology or as a complement to a mobile network. Other fixed LTE advantages include:

• Higher power emission levels than for mobile LTE leading to improved signal quality.

• Mobile LTE is mostly operated on FDD mode and on TDD for fixed LTE. Fixed LTE could be mostly operated on TDD mode which is better suited for providing Internet access than FDD. Higher frequencies considered for fixed TDD LTE notably in 3.5 GHz, 2.3 GHz and 1.4 GHz bands or in very high frequencies necessitate heavy deployment of small cells for blind-spots coverage and the use of satellite to handle tightened backhaul issues.

• Hybrid solutions combining xDSL and LTE show similar strengths to fixed LTE with slightly higher latency. They are gaining traction with some commercial launches in Europe.

• Satellite and especially new LEO satellite constellations can likely offset the relative weakness of fixed LTE in terms of population coverage.

Favourable market dynamics have pushed a number of players to jump onto the bandwagon. They aim at either enlarging their customer base, giving a boost to revenues (MNOs, integrated players, satellite), or taking a chance to remain a market disruptor and eating into mobile revenues (OTT), or at repositioning themselves in case of an upturn (LMDS players, PHS or WiMAX providers and CDMA2000 450 MHz players). CDMA2000 players are migrating towards LTE in the 450 MHz band. Former PHS (Japan) or WiMAX providers also see real opportunities in shifting towards fixed LTE. Manufacturers offer fixed LTE solutions to meet market demand and help operators close the gap between investment and returns.

From a commercial perspective, the door is open for fixed LTE as a mid-term solution whose business case however is rather limited in developed countries, mainly focused on connecting the un- or under-connected in rural areas. In developing countries where fixed broadband is really limited, the market for fixed LTE is more promising.

Discover the perspectives,  key trends, and scenarios about "LTE for fixed access" and contact Carole Manero for further information.

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