Director of Media & Digital Content Business Unit, IDATE DigiWorld
The development of connected TV is inextricably bound up with the widespread availability of high-speed Internet access, a shift to more and more individual viewing and the proliferation of smart devices in the home.
Together, these three elements are steadily revolutionising how viewers access their TV programmes, and providing them with an array of new functions and features. TV sets can be connected to the Internet in several ways. Using:
• a smart or connected TV (direct connection, via Ethernet or Wi-Fi),
• a connected set-top box,
• a streaming box or stick,a connected game console,
• or a smart Blu-ray player.
In 2015, almost three-quarters of the televisions being shipped are Smart TVs, even if their owners may not systematically take advantage of the Internet connection. At the same time, the market for streaming devices – whose main purpose is to play online videos – is progressing rapidly. Within this market that is still populated by a great many solutions and services, several trends are taking shape:
• the way users access and employ connected TV services has become more simple, and shifted from Internet-centric to video-centric;
• managing connectivity with users’ personal devices has become a key issue, with app systems playing an increasingly central role;
• OTT services are moving to the TV and making real strides;
Technological progress in a variety of areas is helping to bolster the market’s development, be it the growing ubiquity of broadband and superfast broadband access in the consumer market, major improvements in video optimisation and compression (HEVC), or the advent of innovative features such as casting which allows users to send video content from a personal device to the television. The main stakeholders in the connected TV ecosystem can be broken down into three categories, based on their original sector of activity: consumer electronics (CE) companies, TV market players and the Internet’s leaders.
• CE industry players are working to improve their software interfaces, either through dedicated developments such as Samsung has done with Tizen, or by acquiring another company, as LG has done with WebOS. The aim is to capture the added-value in the marketplace, whether in the arena of services and/or by selling high-end devices.
• Players from the TV universe are developing their OTT products, and working to bolster their position on the software side of the equation with more open and hybrid platforms. The connected TV could enable them to renew ties with consumers, and better monetise their plans. Broadcasters and pay-TV providers, especially in the United States, are therefore starting to roll out complete OTT plans which include a live component
• Lastly, companies such as Google, Amazon, Facebook and Microsoft that dominate the Internet, are very knowledgeable about software, and changing consumer habits. So they are in the best position to deliver a top-notch user experience, whether in terms of smooth and intuitive interfaces, or providing recommendations based on user data. Their increasingly vertical positioning – covering everything from the content to the device – is also bolstering their potential to capture a growing portion of the video entertainment market.
In this way, many scenarios are emerging for Connected TV to 2025, and will determine which industries are likely to increase their control over this environment:
The size of the OTT video market will vary considerably under these scenarios, depending on how the environment evolves and so which industries prevail, and The popularity of the different devices will also evolve along the same lines.
For the publication of the 16th edition of the DigiWorld Yearbook (pre-order now), IDATE is organizing a conference based on the detailed analysis of the current situations and some forecasts by IDATE experts on the major digital sectors, the discussion will deal with the great trends and challenges that will disrupt the digital markets by 2025.
IoT : The Internet of Things
Connected objects were everywhere and IoT is now becoming the Internet of everything.
Connected cars attracted a lot of attention with connected vehicles on most of equipment manufacturers’ and MNOs’ booths.
Renault’s CEO made a keynote where he presented the timetable for assisted driving. According to Mr. Carlos Ghosn, despite their numerous initiatives and some acquisition rumours, Internet giants are not rivals to car manufacturers but allies, as they consider electric cars and they help car makers to promote electric cars.
Ford had even its own booth presenting the electric vehicles (both passenger and entreprise cars) with dedicated solutions. In the meantime, Vodafone presented a Porsche Panamera model equipped with its new Telematics solution since the Cobra acquisition.
Smart is also getting traction in the IoT space. In the “innovation city” hall (space dedicated to the connected objects), through the AT&T offering (Digital life) where the home could control through the smartphone and even through the connected car (equipped with an AT&T SIM card). When approaching the home, the car can trigger the opening of gate by itself for instance (pre-programmed distance).
While 5G is already in the tracks, very low throughput network technologies are also under the spotlights. After the recent release of its 100 MEUR fundraising campaign among telecom operators, Sigfox was also on everyone’s lips at the MWC. Among the main new shareholders, Telefonica confirmed its strategic investment and its willingness to integrate the technology into its portfolio to address additional verticals and applications.
The GMA (Global M2M Association) also announced a strategic collaboration with Gemalto and Ericsson to provide a Multi-Domestic Service based on a single SIM (using the eUICC technology) helping global enterprises (chiefly from the automotive and consumer electronics segments) capitalize on the growth of connected devices.
Growing market but still key challenges though
During his keynote, if AT&T Wireless CEO predicted that the smart phone will be the remote control of everything in the next few years, he also pointed out the key challenges to address in order to make the IoT market grow significantly:
• Privacy concerns
• Effortless (ease of use)
Data about devices and their users is generated in real-time, often by default and without the user being aware or having choice (especially for free apps). There is a need for a different approach to giving users transparency, choice and control over their data and privacy.
Generally user has a single choice : accept or not using the service, there should be gradual approach (like sharing some id attributes but not all of them).
Privacy could be a competitive stick for service providers, as users are becoming more aware of privacy.
Facebook in emerging countries
• Airtel: “Operators and Facebook are like the beauty and the beast, but the beast (facebook) is becoming more human nowadays”. Airtel was reluctant to introduce Facebook because of VoIP threat. Is looking at it like the “boiling milk”.
• Millicom, Telenor: have seen ARPU rise thanks to facebook launching, very promising for them.
• Wikipedia has the same approach of “Wikipedia zero”, dealing with operator to provide data access for free.
More informations about IDATE's expertise and events :
Nouveau cycle de conférences de prospective numérique sur les enjeux de l’Internet, de la télévision et des télécoms à 2025
A l’occasion de la sortie de la nouvelle édition de son DigiWorld Yearbook, l’IDATE présente son nouveau cycle de conférences de prospective numérique sur les enjeux de l’Internet, de la télévision et des télécoms à 2025 !
A partir des analyses des experts de l’IDATE, les débats seront animés par Marjorie Paillon, Journaliste, Tech 24, Philippe Escande, Rédacteur en Chef, Le Monde et Gilles Babinet, avec les contributions exceptionnelles de :
Director of the Telecom Strategy Business Unit,
DigiWorld Yearbook project leader, IDATE
Digiworld Yearbook 2013
What is the future of telcos Business models ?
Increasingly stiff competition, particularly in Europe, and the growing role of the internet and OTT (over-the-top) services, has upset the telco industry. Revenue from calling minutes is tumbling, data traffic is exploding and NGN (LTE and fibre) rollouts require massive investments. This is the backdrop, then, against which telcos are having to consider the future of their business models.
Creating more value from access
They do have certain leverage to deal with this change, starting with creating more value from network access now that OTT services are increasing user consumption. NGN technologies allow telcos to increase speeds (‘best network’ strategy) and to introduce noticeable quality improvements, both of which can differentiate their offerings. The challenge now is to increase data revenue, smartphone and tablet use and to extricate themselves from the price wars raging in certain national markets. So we are starting to see new pricing strategies emerging, with per-minute charging being replaced by new ways of creating value from access and data: tiered pricing based on speed and access quality, data-sharing options between multiple devices and/or users, and bundles that include optimised access for a group of applications.
Other than necessary investment in infrastructure, implementing these innovative approaches also requires significant effort in upgrading software tools (OSS/BSS) in order to control traffic and usage in real time, and to provide the flexibility required for policy management and real-time charging.
Also worth underscoring is that operators see the migration of IT architectures to the cloud and the proliferation of connected objects (machine-to-machine, the internet of things) as major opportunities to earn back on some of their spending on access.
Moving toward two-sided markets
Alongside this strategy, telco services can take two approaches:
• adding value to access and using a two-sided market approach, by enhancing wholesale services: telco CDN,
• API agreements (billing, geolocation and others)
• beyond access, by relying on certain assets that underpin their originality. For example, value can be created from the personal information available through their consumer relationship, either by optimising their own offerings (downstream side in the two-sided structure), or by selling analytics services to third parties (upstream side).
The challenge is therefore to find the right balance so as not to destroy the image—and the value that comes with it—of a ‘trusted third party’ that consumers have of them. There are also increasing opportunities with regard to services. Operators can harness the creativity found in start-up companies, as seen with Telefónica Digital) while managing the risks of destabilising agreements that would likely be signed with major OTT players. They can also enter into collaborative projects, with players from user sectors (particularly within vertical markets), or between themselves to define applications deemed strategic (NFC and payment) or related to traditional interpersonal communication (see joyn RCS services). In particular, this would involve challenging the proprietary solutions developed by device manufacturers.
Industry reorganisation in the medium or longer term
These changes to business models tailored to operators’ specific assets could be accompanied by a consolidation of the telecommunications landscape in the more or less long term, particularly in Europe which has been singularly hard hit by the economic crisis and by having an extremely fragmented market. It is possible that the new round of mergers in the US could make its way to this side of the Atlantic, or result in a series of infrastructure sharing and pooled investments.
Maintaining the status quo could, on the contrary, only speed up European telcos’ loss of power, impede the development of NGN and, ultimately, result in their being taken over by carriers from the US or one of the powerful emerging economies.
About the Digiworld Yearbook
197 pages that deliver the finest market insights from IDATE experts who track the changes at work in the globe’s telecom, Internet and media industries throughout the year.
the DigiWorld Yearbook is published in English and French and available in print and PDF format. An iPad edition, developed by Forecomm, is also available.
The 2012 edition can be downloaded for free
The 2013 edition is available for purchase. Print: €99.99, incl. VAT; PDF and iPad: €54.99, incl. VAT
- You can have a look at the digiworld yearbook 2013, purchase it or even download the 2012 version for free at : www.digiworld.org/yearbook/
Opening day of the 34th Summit: The future of the digital economy according to its leaders
This morning IDATE Chairman François Barrault opened the 34th edition of the DigiWorld Summit in Montpellier. The Summit has become one of the must-attend events each year for playmakers in the telecom, Internet, television and video game industries. It will bring together more than 1,200 participants and 130 speakers from over 20 countries around the world.
IDATE and the members of the DigiWorld Institute are putting the spotlight on “Game Changers: Cloud, Mobile, Big Data” for this year’s Summit. The objective of the event is to discuss the factors that will lead to the emergence of the next decade’s digital leaders.
Executives from device and cloud heavyweights as well as content providers and telecom operators will present their views on these subjects over the next two days.
John Chambers, CEO of Cisco, affirms that the pace of innovation today is the fastest it has been in the past 25 years.
Hans Vestberg, CEO of Ericsson, stresses the need to combine a strategy of vertical integration and openness to “capture the innovation of other players.” For Ben Verwaayen, CEO of Alcatel-Lucent, Europe should speed up LTE rollouts despite the economic uncertainties. Qualcomm Chairman Paul Jacobs, riding high on the success of the firm’s technology, which is used in many smartphones and tablets, predicts a “sixth sense, in that everything will be connected around us.
In addition to such distinguished speakers, the DigiWorld Summit is also recognized for its detailed preparation of the themes and the series of sessions based on IDATE analysis. During the opening session the Institute’s experts will each present an overall analysis of their focus sectors. They will highlight the dominant role of three game-changing factors applicable to all the links in the value chain:
- Mobile’s irresistible momentum, with the battle of the OSs and then LTE, which is expected to be central to the new differentiation strategies to break out of the price wars.
- The Cloud, which for IDATE is not limited to externalized enterprise computing (“cloud computing”) but includes application distribution architectures (including for audiovisual content), shaking up traditional roles.
- Big Data, an asset that all players will be looking to capitalize on through real-time applications, aiming to enhance their services and offerings (devices, content, connectivity services, storage and application platforms, etc.).
Three important voices offer a counterpoint to IDATE’s analyses: Ben Verwaayen, the boss of Alcatel-Lucent, Léo Apotheker, former chief of SAP and HP, and Carsten Schloter, CEO of Swisscom. Overall the messages converge, with all three insisting on one point: Europe has a lot going for it. However, these pluses are particularly concentrated in the telecom industry, which is currently suffering multiple ills: the economic situation, its relative disintegration and the constraints of a world where traffic is exploding but applications tend to lean in favor of over-the-top (OTT) players.
The sessions on November 15 will be devoted to sketching a potential next-generation telco. Presenters include Terry Denson, Vice President of Global Strategy for Verizon, Stéphane Roussel, CEO of SFR, Jean-Ludovic Silicani, Chairman of ARCEP. The heads of Ericsson and Orange, Hans Vestberg and Stéphane Richard, will close the debate. Some big names in traditional content (the BBC) and new online platforms (like Netflix) will also be present. A conclusion will be given by players that hold promising futures in platforms with IBM, Amazon, BT and Cisco.
Also note that five executive seminars will be presented on November 14 and 15, on the following topics:
- Impacts on privacy, with the input of Google and CNIL.
- Key issues for next-generation networks: FTTx, LTE, etc.
- Expectations surrounding the rise of smart cities.
- Perspectives related to the concept of smart TV.
- New business models for video gaming.
> Follow live the plenary sessions: Live streaming DWS12 !!!
> More information about our program and our speakers on the website DigiWorld Summit 2012
Senior Consultant, Mobile Devices & Platforms Expert DigiWorld by IDATE
The new iPad unveiled by Apple yesterday was much as expected. Rumors during the run-up proved fairly accurate when it came to the main features of this third version of Apple’s tablet (especially retina display and 4G) and we believe that this update is a fairly solid response to what competitors have been able to produce so far. No groundbreaking features but rather improvements aimed at strengthening Apple’s position in the market.
Below are some thoughts on what we learned yesterday. These analyses build on our ongoing research on the mobile device market – as found in last year’s report on LTE devices (which is part of our LTE Watch service). If you are interested in this topic, an in-depth analysis of mobile device manufacturers’ strategy and future mobile device innovations, can be found in our upcoming report on Next Generation Mobile Devices which is due out in Q2 2012.
- Support for LTE is not necessarily the main advantage of the iPad as is a feature aimed chiefly at users in the US. The new iPad, powered by Qualcomm multimode LTE baseband, supports both 700 MHz and 2100 MHz LTE bands which in itself limits its interest worldwide. Those two bands are and won’t be the much used by operators when deploying their LTE networks. From a European perspective for instance, the device will need to support the 800MHz, 1800MHz and 2.6GHz bands to be usable. But this is not a major issue, given the limited deployments so far in those frequency bands. What this LTE support tells us is how important Long-term evolution has become in the US as a differentiating argument in the mobile device market. It’s also impressive to see how much the US wireless market has evolved over last 4 years. Remember when the first iPhone was launched back in 2007, with no support for 3G because of those new-gen networks were still embryonic in America? Now, the US is at the forefront in deploying the latest radio access network technology, and Apple could not ignore it when targeting its domestic market. It is still unclear how far US operators have been pushing Apple to go that way, but one thing is sure: the announcement that the latest iPad supports LTE was clearly US-driven.
- Given the low rate of deployment for LTE networks outside the US (and Japan and South Korea which are the two other big LTE markets), and the increasing number of bands to be supported, supporting DC HSPA+ and HSPA+ was Apple’s only option to limit the number of different versions of the iPad and have 4G-branded iPads sold internationally. There has been a lot of debate over whether or not it was fair to use the term 4G for DC HSPA+ and HSPA+ technologies. They are indeed evolutions of 3G standards; their performance is an improvement over what we are used to and, for everyday uses, can be considered to deliver “LTE like” performance. We should also remember that even LTE is not considered by the 3GPP as a 4G technology: only LTE-Advanced and WiMAX IEE 802.16m are considered as such. In any even, from a market and network deployment perspective, supporting DC HSPA+ and HSPA+ was the best solution for the non-US market. Operators all over the world announce are upgrading their networks to this standard to able to support downlink rates of up to 42 Mbps (in dual carrier mode). The new iPad will support this maximum theoretical bitrate, while DC HSPA+ will eventually be able to sustain 84 Mbps. Plus these deployments will be in existing 3G bands, so Apple will not need to provide support for other bands.
- Apple is by no means the first device manufacturer to announce support for LTE. Samsung, HTC, LG and especially Motorola were first to launch such devices in the American, South Korean and Japanese markets. As we expected and noted in our report on LTE Devices and in our LTE Watch service insight last year, Apple has taken a more cautious approach in its release timetable, waiting for baseband solutions to be mature enough to lessen the number of wireless versions of the iPad, and enable Apple to provide a solid enough 4G experience in terms of battery life. Here, Qualcomm was the most relevant solution for Apple – providing the broadest support for RAN. As mentioned earlier, providing support for DC HSPA+ alongside LTE and CDMA2000 EV/DO was a strategic move on Apple’s part – both in terms of industrial process (reducing manufacturing and BOM costs) and marketing (being able to call it 4G worldwide).
- In terms of battery life, Apple could not afford any noticeable reduction in performance when using 4G. Of course new LTE basebands from Qualcomm (probably the MDM 9600) somehow reduced their footprint, but also forced Apple to perform some major reengineering to handle increased drain on the battery. This basically boils down to making more room for bigger batteries, without altering the form too much. The relative increase in the new device’s thickness (9.4mm as compared to 8.8mm for the iPad 2) is an indication of how challenging it was for Apple to provide support for LTE and deliver increased graphical performance required for the retina display. When we look at the specs, the new iPad battery is a 42.5 watt-hour unit, as compared to a 25 watt hour battery previously… so nearly twice the capacity as before. Impressive. It still remains to be seen how the new iPad compares to other LTE tablets. There appears to be a growing consensus around the web that the new iPhone will naturally support LTE as well. I’m not so sure, as the design constraints this involved for a smartphone are a whole other ball game. It will be much harder to make extra space for increased capacity battery. In any case, the technical challenges are big enough for me to think that, should it support LTE, the new iPhone will be rolled out in October rather than in June.
- The Retina display is probably the most obvious improvement. The previous iPad had just a standard resolution for a 9.7-inch display, but the pixel density of the new iPad really makes a difference … both with the previous model and with what the competition is offering. It is not sure how many of Apple’s display partners (LG? Samsung? Hitachi? Sharp? Panasonic?) are involved here, and if competitors will have access to this technology (it took some time for Apple’s competitors to release a smartphone with higher ppi than the iPhone 4S). What is certain is that Apple may well prevent its rivals from getting their hands on the technology by occupying the production channel. Given Apple’s unmatched capacity to order such components in very high volumes, its competitors will likely find it difficult to find enough components for their own devices.
- In all of this, there has been no mention of Amazon and its Kindle Fire… even though it is reported to be Apple’s most successful competitor in the tablet market. Apple still isn’t targeting this segment of the market overtly, even with a lower-priced iPad in its line-up. This may be a sign that, for Apple, Amazon is more a competitor for Android tablets than for the iPad which is aimed at the mid-range to high-end market.
Radio Technologies & Spectrum Practice Manager - IDATE
27 February 2012, Barcelona, Spain – IDATE provides regular analyses of the main trends shaping the world’s mobile markets: networks, devices and services. DigiWorld by IDATE have teamed up to publish the new edition of its special White Paper: “LTE 2012 - Markets & Trends” to coincide with the Mobile World Congress in Barcelona (27 February-1 March 2012).
The first commercial LTE rollouts and the main operators’ strategies are forging the trends that will shape the LTE market’s development in the years ahead:
- LTE is being implemented mainly to supply added capacity, but some operators are using it as a way to distinguish themselves from the competition
- LTE is also driving costs down for mobile operators
- LTE will dominate 4G: the LTE ecosystem is trimming the mobile WiMAX market
- The lack of LTE-compatible devices (2.6 GHz band) is currently an issue in Western Europe
- Spectrum fragmentation for LTE is slowing down roaming prospects
- The scarcity of digital dividend spectrum and the drive for sustainable business models in certain developing markets will drive a greater degree of network sharing
- Voice (VoLTE) is chiefly a long-term concern for most operators
- LTE femtocells will play a key role in LTE deployments
- LTE-Advanced will roll out sooner than expected: the first real-scale deployments due in 2013, instead of the previous target of 2015
- TD-LTE is now seen as a complement to LTE FDD in many countries
- LTE in the digital dividend can provide a substitute to the fixed network – as seen in Germany, Australia and as planned by Verizon Wireless
- LTE wholesale model developing worldwide with many implementations around the world
At the end of 2011, there were approximately 9 million LTE subscribers worldwide according to our LTE Watch Service database. More than 60% of LTE subscribers were in the US as of 31 December 2011, with Verizon Wireless accounting for close to 90% of them.
We forecast that, by the end of 2015, there will be more than 482 million LTE subscriptions worldwide. Of these, Asia-Pacific will represent 34.3%, North America 28.9% and Western Europe 17.9%.
We anticipate that mobile traffic will reach more than 127 EB in 2020, representing a 33-fold increase compared to 2010. By 2020, Asia will represent 34.3% of total mobile traffic, followed by Europe (22%) and the Americas (21.4%).
Mobile voice and data traffic 2010-2020
Source: IDATE - 2011
Radio Technologies & Spectrum Practice Manager
firstname.lastname@example.org - Tel +33 (0) 670 708 542
Head of the Internet Business Unit
IDATE has recently published its market report “Net Neutrality – Core issues and business models” which explores the technical-economic issues surrounding Net neutrality and its current status in markets around the globe. It also delivers analysis of the traffic management practices and technical measures needed to control costs. And, finally, looks at the new business models we are seeing emerge through an examination of stakeholders’ models, along with synthesis of the state of affairs in each country.
“The many debates that have taken place over Net neutrality these past several years have now been whittled down to chiefly technical-economic questions over network financing, taking into account the increase in traffic and the need for ongoing innovation in services. A host of players now make up the value chain (IP transit providers, CDNs, ISPs, service and content providers, users) all operating very different business models and all looking to capitalise on the basic rules that enabled the Web’s development”, says Vincent Bonneau, Director of the Internet Business Unit at IDATE.”But when it comes to the Internet’s overall business model the status quo does seem hard to maintain. Some longstanding rules could be called into question, especially the system of settlement-free peering now with the rise of asymmetrical traffic, along with offers of unlimited traffic that are often extended to users.”
Status of Net neutrality around the world
The degree to which Net neutrality debates have progressed – as much in terms of identified issues (ISPs’ traffic management measures, operators’ and content providers’ stated positions, etc.) as regulation (sector-specific or under general competition laws) varies a great deal from country to country. Even within each country we find disparate approaches being taken to fixed and mobile networks. The Netherlands is in fact the only country among those being examined here that has introduced specific Net neutrality legislation for mobile networks. It was joined by Chile which became the first country in the world to introduce Net neutrality into Law in July 2010.
The debate has picked up steam in Europe over the past several years, even if concrete instances of traffic management practices, notably on fixed networks, are still rare. But European regulators are not necessarily looking to introduce severe sector-specific regulation, and continue to work more on encouraging competition. In addition to intra-modal competition, regulators can also draw on the Telecoms Package for provisos concerning traffic management practices. Any identified problems are today being handled chiefly by soft laws or general competition law, as has been the case in Italy (P2P) and in Germany (mobile VoIP), with the Netherlands standing out as an exception, with Belgium due to follow suit.
An analysis of 13 countries in Europe, North America and Oceania reveals several similarities in:
• The content and services targeted by traffic management measures. Although the Net neutrality debate aims to be one of general principles, it often focuses on a few services and types of content, namely P2P file sharing and online video (UGC and catch-up TV) on fixed networks, and VoIP (or SMS over IP) and P2P on mobile networks. Discussions centre on who should finance the network (especially wireline ones), and/or on bottlenecks and, to a lesser degree, on operators’ ability to favour their own managed services over services delivered on the open Web. Access providers that are introducing traffic management measures on P2P are endeavouring mainly to alleviate bottlenecks, while those applying differentiation measures to video are working to ensure financing for their network.
• Volume-based billing and bandwidth throttling and capping. Volume-based billing is virtually ubiquitous on mobile and cable networks. AT&T and Deutsche Telekom were among the first telcos to (re)introduce this approach on their wireline networks. So the issue of network financing becomes a different one since, in addition to there being a traffic cap, customers’ will either see their charges vary according to the traffic they generate or their available bitrate diminished. Volume-based billing is applied across the board in Australia which, due to a geographical particularity – i.e. most traffic comes from the rest of the world and is routed in via costly undersea cables – cannot offer unlimited access plans. So the Net neutrality debate there is focused mainly on bottlenecks, even if network financing remains an important topic of discussion as well.
• Major local content and service providers’ often heavy use of CDN solutions. All of the Web’s major players are working to improve the availability of their content and services through traffic optimisation solutions. The Internet’s titans are installing their own infrastructure, in particular to develop their own content delivery networks. Major telcos such as France Telecom, Telefónica and AT&T are also becoming interested in content delivery networks.
• The European regulatory framework and various approaches across the EU. Aside from Norway and the Netherlands on the matter of mobile networks, all European countries are focused more on inter-modal competition for access provision than on Net neutrality, per se, as it creates a more competitive marketplace. This therefore creates a situation that makes differentiation impossible unless all operators apply it. Otherwise customers will naturally chose the operators who are not billing based on traffic or QoS. European players also have a common regulatory framework on transparency in traffic management practices with the Telecoms Package.
Vincent Bonneau is IDATE’s chief expert on fixed and mobile Internet services and software innovation. He is the head of the Internet Business Unit which tackles issues surrounding the Web and emerging technologies, and especially services, markets, usage and monetisation aspects. Vincent’s particular specialty is detecting and analysing innovations.Before coming to IDATE, Vincent worked in the software and telecom industries. He was the “Internet Software and Technologies” attache to the French Trade Commission (DREE) in San Francisco, in addition to having gained strategic operational and marketing experience working for Noos, Wanadoo and France Telecom in Paris; Mr. Bonneau is a graduate of the Ecole Polytechnical (1997) and the Ecole Nationale Superieure des Telecommunications (2002), and holds a Masters Degree in New Technologies Management from the HEC business school (2002).
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Director Telecoms Business Unit
Munich, 15 February 2012 – Europe (EU-35) reported a solid 28% increase in the number of FTTH/B subscribers in 2011. FTTH/B coverage continues to progress fast in Europe with a yearly growth of 41%. This confirms that expanding FTTH/B coverage is still the top priority for players. There were nearly 5.1 million FTTH/B subscribers in the EU-35 at end 2011, and nearly 28 million homes passed.
“Main European economies are now on tracks for FTTH/B: France presents a 34% growth in terms of subscribers in 2011, and Spain is progressing fast being very near to enter FTTH Global Ranking2,” says Roland Montagne, Director of the Telecom Business Unit at IDATE. “2011 has been a crucial year for Germany concerning FTTH. Even is the number of subscribers is still very low, competition led by local players backed by municipalities and also large deployments of DOCSIS 3.0 has forced DT to get involved on FTTH. This engagement should be a real starting point for FTTH in the country.”
“Among CIS countries, because of its specific demographic features, Russia leads the way in terms of FTTH/B subscribers and homes passed – and the potential of the Russian market is huge, with 4.5 million FTTH/B subscribers and 12.3 million homes passed at end 2011”, comments Valérie Chaillou, lead FTTx analyst at IDATE. “Ukraine is also home of more than half a million FTTH/B subscribers, and we expect to see new players becoming involved in FTTH/B deployments in the near future.”
Current status of FTTH/B rollout projects at the end of 2011
As in previous years, IDATE has been commissioned by the FTTH Council Europe to provide an overview of the status of FTTH/B rollouts across Europe at the end of 2011. To date, the Institute has identified around 260 FTTH/B projects in the EU-35.
The first type of player to become involved in FTTH/B deployments was alternative carriers which singlehandedly account for 55% of FTTH/B homes passed in Europe. Alternative carriers have performed rollouts in France, Italy, Germany, Sweden and in Eastern Europe (Slovakia, Slovenia, Romania, and Bulgaria).
We include cable companies in this category as they are often involved in large-scale FTTB network rollouts – with examples that include Numericable in France and ER Telecom in Russia. Cablecos have the advantage of not having to negotiate building-by-building to access homes since the coaxial outlet is already installed plus, in a great many instances, the civil engineering to pull the fibre to the foot of the building has already been performed.
Another category of stakeholder is local authorities and regional power companies (which are often owned by public authorities). While this category represents only 13% of homes passed for fibre at the end of 2011, it accounts for the largest number of FTTH/B projects, most of which are small scale ones – covering only a local territory. Their involvement will probably increase in other countries such as Italy but also France, and the UK through national programs.
These players can encounter difficulties when taking on the business of operator which usually has no correlation with their core responsibilities. To help alleviate these difficulties, we are seeing some of these small-scale rollouts being grouped together to form a network – with examples that include Stedenlink in the Netherlands, Netixopen in Finland and, in the form of an ISP, Waoo in Denmark.
This allows the parties involved not only to pool their expertise but also to create a brand and to build alarge customer base (to attract TV broadcasters, for instance). The other category of player worth mentioning is incumbent carriers which account for 33% ofFTTH/B homes passed in Europe. Virtually all of Europe’s incumbent carriers are either now involved in FTTH/B rollouts, are gearing up to it or are in the planning stages. Even those who originally opted for an FTTN+VDSL solution, such as KPN, Swisscom and now BT and Deutsche Telecom, are turning their attention to FTTH – in many cases as a result of the growing competitive pressure created by cable companies’ and local authorities’ fibre initiatives.
Excluding Russia, which leads the FTTH/B market in terms of subscribers and homes/buildings passed thanks to its demographic make-up (4.5 million FTTH/B subscribers alone), Sweden is still the leading market with 644,000 FTTH/B subscribers at end of 2011. This leadership could be challenged in the near future by countries such as France, which is already home to nearly 630,000 FTTH/B subscribers. Other countries are also reporting strong growth and are now positioned in the top 10 in terms of number of homes/buildings passed. This is true for Ukraine, Romania and Portugal which ranked 3rd, 5th and 6th at end of 2011. We should also mention that Spain is progressing fast, being very near to enter FTTH Global Ranking. Indeed with nearly 171.000 FTTH/B subscribers at end 2011, Spain is presenting the highest growth in 2011 (+184%). Scandinavian countries, and notably Sweden and Norway, still lead the way in Europe in terms of penetration rate – with 39.5% and 59.7%, respectively. Nevertheless it is now in Eastern Europe where we found also high penetration rates: Czech Republic with 42.4%, Hungary with 39.6%, Turkey with 26%.But the situation across Europe as a whole is still quite disparate as countries like Italy or France are still reporting low penetration rates (13.8% and 10.6%, respectively, lower than the EU-35 average which reaches 18.4%). Regarding the technology deployed, Ethernet is still players’ first choice across the EU-39, and represented 70% of all FTTH/B rollouts at end of 2011. As concerns network architecture, FTTB still accounted for 59% of rollouts at the end of 2011. Players are favouring an FTTB configuration as it allows them to avoid the issues that come with installing fibre on private property, and especially MDUs – i.e. having to negotiate with each property owner.
DigiWorld Institute by IDATE
Roland Montagne - Director Telecoms Business Unit - email@example.com
Jeremy GEORGE - Tel+33 (0)6 10 607 808 - firstname.lastname@example.org