- I doubt this is enough. A much more radical approach may be needed, like solar and wind power. My German neighbour is having a new home built, using only thermal power (the refrigerator turned upside down). It takes drilling a 80-100 meter deep hole, but a temperature difference of just 2-3 degrees is sufficient. How difficult is that. And how durable! Contrast that with the cost of building a smart grid.
- Savings of 14 percent may be unrealistic when the project moves beyond the initial group of trial homes, where people could be quite motivated to cooperate. There are a lot of jerks our there. Go drive on the highway to see how few people are interested in driving economically. Even though many cars these days have a smart meter, telling us that doing 90 km/hr will probably save us at least 30 percent of our as consumption, very few seem to be interested. That's human nature. Still, I hope the trial will prove me wrong. Smart software, added to the smart meter, may help us become better people.
Wednesday, December 30, 2009
Tuesday, December 29, 2009
Monday, December 14, 2009
- MAYBE they will accelarete FTTH. That would be a u-turn to previous statements, and construction capacity (currently at an annual run rate of 250k homes per annum) doesn't have much room to grow.
- MAYBE they will bet the farm on VDSL2. It is what they have announced, but it could be more than just an interim strategy (in theory).
- MAYBE have an acquisition to report. BBned is for sale and would add a handsome business provider (the wholesale provider would lose all its customers no doubt, and the retail business may have to be sold on). Still, they could replace BBned on a couple of FTTH networks.
- MAYBE they have a retail partnership to report. Perhaps Online Breedband is finally ready to live up to its promises (made in April). Or Tele2. But the real big fish would be Ziggo. Imagine Ziggo becoming an operator/RSP on the Reggefiber FTTH networks! (UPC would be a harder nut to crack - they suffer from a severe case of incumbofobia).
- MAYBE they have a content deal up their sleeve. Connected TV is all the rage. This would enhance the triple play.
- MAYBE there will be a switch to GPON technology (in the larger cities), in order to be able to re-use VDSL investments.
Wednesday, December 09, 2009
Saturday, November 28, 2009
Friday, November 27, 2009
In a download world, any NGN will do, but in a streaming world we need dedicated fiber.
Sunday, November 22, 2009
- Start-ups. There are dozens, including at least three in the Netherlands: UCD, Stream Group, and a promising newcomer: Metrological, that I wrote about in this report. Others include Sezmi, that just raised another $25m and launched a pilot. Trials, trials, more trials ....
- OTT giants, with an established revenue stream. Apple (Apple TV), Netflix (Roku), but where is Google? All its efforts are going towards mobile: search, ads, display ads (AdMob), operating systems (Android, Chrome OS), applications (VoIP, maps), possibly a smartphone and a Clearwire stake. Is IPTV the next big leap for Google? Are they awaiting all these trials to see who gets most successful - and then buy it, just like they did YouTube?
- Traditional operators. As usual, newcomers may open up the market, but traditional players more than once end up winners. Once they feel the heat, they embrace the new technology and rebalance their revenues away from their legacy sources of income. With Amino, an established STB vendor, announcing an Intel CE 4100 based box combining broadcast and OTT video, this may just be happening once again.
Tuesday, November 10, 2009
Polar realised its long term FTTN strategy would be unable to keep up with future demand. The solution was a shift to a FTTP strategy that began two years ago and will continue with the current Occam deployment.
Wednesday, October 28, 2009
Sunday, October 25, 2009
On the side, new service development is notoriously slow, which may contribute to KPN's undecisiveness. One reason is (semi) governmental agencies' unwillingness to move online. A reason behind this, as was stressed in my newspaper this week, is the fact that health workers are paid by the hour. They are completely disincentivised to embrace e-health, because it threatens to make their work much more efficient.
Wednesday, October 14, 2009
Thursday, October 08, 2009
- Paper: clearly on its way out, with Amazon's Kindle going worldwide. Still, nice for specific locations (public transport, restaurants, etc.). In the long run: a typical dinosaur.
- E-reader: saves newspapers a lot in terms of paper, ink and distribution costs. But who is going to pay? There is some resemblance to the femtocell conundrum. Will the end user be willing to pay for a piece of hardware that saves his provider a lot of money?
- Netbook: if newspaper companies adjust their websites to the specs of a laptop or netbook, then they won't need to venture into the risky e-reader market. Instead, they could subsidise netbooks. If they make their websites fully for-pay only, they could make an offer to their subscribers: if you give up your print edition, we will give you a netbook and you can download our newspaper every day for a reduced subscription fee. If they score an MVNO deal, they could have the download process automated and performed daily (or even several times a day) over a 2G or 3G connection (cf. Amazon).
- News: AP, AFP and Reuters aren't going away. Newspapers, relying on printing syndicated news from these sources alone, are on their way out.
- Background stories, in-depth reporting, interviews: here is where a newspaper's value is, I believe.
- Non-content: My NRC newspaper is venturing into community services that are especially appealing to its rather well-defined demographic: trips, books, CDs. Perhaps these services reduce churn somewhat, but I doubt they add much value.
- Content: Since newspapers are in the content industry, they could become portals for customised content by adding related content from a variety of sources. They could add books, blogs etc. to their daily newspaper download to the subsidised netbooks or e-readers.
- Other: newspapers have a billing relation and a more or less well-defined reader demographic, which in theory positions them to become MVNOs or even RSPs on broadband networks.
Tuesday, October 06, 2009
This year's Nobel Prize in Physics is awarded for two scientific achievements that have helped to shape the foundations of today’s networked societies. They have created many practical innovations for everyday life and provided new tools for scientific exploration. In 1966, Charles K. Kao made a discovery that led to a breakthrough in fiber optics. He carefully calculated how to transmit light over long distances via optical glass fibers. With a fiber of purest glass it would be possible to transmit light signals over 100 kilometers, compared to only 20 meters for the fibers available in the 1960s. Kao's enthusiasm inspired other researchers to share his vision of the future potential of fiber optics. The first ultrapure fiber was successfully fabricated just four years later, in 1970.
Today optical fibers make up the circulatory system that nourishes our communication society. These low-loss glass fibers facilitate global broadband communication such as the Internet. Light flows in thin threads of glass, and it carries almost all of the telephony and data traffic in each and every direction. Text, music, images and video can be transferred around the globe in a split second.
If we were to unravel all of the glass fibers that wind around the globe, we would get a single thread over one billion kilometers long – which is enough to encircle the globe more than 25 000 times – and is increasing by thousands of kilometers every hour.
Saturday, September 19, 2009
- Tele2 NL, focusing on VDSL2 for now, but an FTTH trial wil be conducted in 2010. And: it was acknowledged that VDSL2 is an interim strategy.
- UPC, FTTH's nemesis, however had an interesting quote: "Should we need to do FTTH in 10, 20 or 30 years, we will."
- Ams-IX doesn't directly feel the effect of FTTH, because uptake is a very gradual process. Interestingly, community services (local traffic kept on-net and hence off the Internet) will grow its share of total traffic.
- At the active layer? This is the traditional ISP view, who feel they need to unbundle copper of fiber. So they need to be an operator. However, there is only limited (economic) space in each PoP to justify this model for more than 2 or 3 players.
- At the services layer, but on-net? This is the view of Genexis. It has a drawback: WBA isn't regulated. So what you see now is that KPN and cablecos are starting to make innovation happen themselves and seem to be trying to keep RSP's out of the market.
- At the services layer, but OTT? This is the Google, Skype, iTunes model. A lack of QoS and security is a drawback, that is however pushed to the background by network upgrades and the rise of CDN's.
Thursday, September 10, 2009
Sunday, September 06, 2009
- Business case. Make sure you have one, including funding. A high take rate is essential. Remember that fiber is cheap; it costs only EUR 1,000, which is negligible when compared to your home's value.
- Community sense. Everybody needs to be in.
- Triple play. This will make the network finance itself.
- Communication. Forget fiber speak. Keep that 75 year old granny in mind when talking about your plans. Focus on telephone and television services.
- Local services. This is something the cableco can't replicate. Think of the local soccer club, even marriages taking place in the local church.
- Customer service. Remember that people hate call centers.
- Reliable network.
Monday, August 31, 2009
Sunday, August 23, 2009
- The mobile phone liberated us from having to sit at the desktop phone.
- VoD liberates us from having to watch linear broadcast TV.
- Social networking liberates us from having to be friends with family, neighbours, colleagues etc. only, because it allows us to explore the entire world.
- The digital camera made us much more independent from the photo store and the limitations of 'analogue' (chemical) photography.
- How does a gallery owner select photographs in the age of digital photography? ("Everyone can be super! And when everyone is super ... no one will be.") Which raises the wider question: What is art anyway?
- How does a teacher put together a curriculum in the age of Wikipedia? What do you teach kids when they can look-up and download anything from the Internet?
- Where do you get a profound musical experience (check out Cesar Franck's Piano Quintet) in the age of MP3-files, flat fee access to millions of songs and DJs being promoted to artist status?
- How do you engage in profound relationships in the age of e-mail and social networking?
Wednesday, July 22, 2009
- The Medium. In general, the shortcomings of HFC networks include limited downstream (where Docsis and other technologies help out), even more limited upstream (where channel bonding options are more limited), the medium itself (which is much less 'transparant' for signals than fiber, which is why HFC operators need several amplifiers in their access networks) and the fact that it is a shared access network (just like wireless).
- The Upgrades. HCF operators have a choice of many technologies and techniques (I counted 14!) to upgrade their networks. The trouble is, some do not apply for practical reasons, some are still embryonic and others may prove costly.
- End-game. Even if HFC operators manage to do node splits to 1 per 20 homes and fiber deep to reduce the access network to 50 meters, expand the spectrum to 3,000 GHz and apply 256-QAM, questions remain: how much does it cost, and is it enough?
- Access network. In the above case, a 50 meter access network could in practice not be too different from an in-home network based on copper or coax in most FTTH networks.
- Non-linear video. The big threat is a migration away from linear TV to non-linear HD video, in both the uplink and the downlink. Here it is important to note that people tend to overestimate the short-term and underestimate the long-term. In other words: yes, upgrading will allow HFC operators to compete for several years; and no, it may not be enough and a full FTTH migration may be necessary.
Thursday, July 09, 2009
Monday, June 29, 2009
"On average, American adults are now spending just under 4 hours each day online; that is an 81% increase over 2006 numbers, according to a new report from The Media Audit. Researchers have found that the Internet now accounts for more than 30% of a 'media day' for adults in the US."In other words: time spent online must have doubled since, let's say, 2005. And it makes up only 30% of a media day.
Wednesday, June 24, 2009
Tuesday, June 23, 2009
Wednesday, June 17, 2009
- In-building work starts in September. It is free for those who signed up and will take four hours. During the first month, 56k homes and 1k businesses will be wired. At the end of 2010, 60% coverage will be reached.
- Activation and commercial service is set to be launched sometime during H1 of 2010.
Thursday, June 11, 2009
Coffee is a typical commodity, and many people don't mind drinking it just like that (left). Came along Nescafe and Douwe Egberts/Philips, to give the world Nespresso (right) and Senseo. These products are outrageously overpriced, but equally popular.
Tuesday, June 09, 2009
Friday, May 29, 2009
FTTP is a key profitability driver for our Company and we believe there are significant opportunities for our services in select communities. Our ability to provide a voice, video and data "triple play" offering attracts customers who, because they are subscribing to three services rather than one, generate higher monthly revenue per customer. For example, Average Revenue Per User (ARPU), at March 31, 2009 for our non-FTTP U.S. customers approximated $75 per month, while ARPU for residential FTTP customers exceeded $175 per month with business FTTP customers exceeding $300 per month. Furthermore, these customers tend to stay; monthly business and residential FTTP had an attrition rate of approximately just 1% and 1.7%, respectively during the quarter.
Thursday, May 28, 2009
- In New Zealand, one country among several in the region working toward FTTH, it has been noticed.
- Optimum Lightpath is launching an Interactive Patient Care service for hospitals. It takes little imagination to see this extended 'to the home', as Orange seems to be thinking.
- 3-D as a driver of FTTH is gaining momentum. There is talk of standardisation (also for a version sans lunettes) broadcasting is 3-D is starting to happen (Spain, US) and Futuresource is expecting a rapid take-up.
Wednesday, May 27, 2009
Thursday, May 14, 2009
- DIY trench digging: already 80% of Lyse's customer base. But that's Norway.
- Emerging markets: fiber coming to Lebanon, India, India again, the Philippines, Iran and Estonia.
- Infrastructure-based competition: Swiss utilities are banding together and Swisscom is abandoning VDSL in larger cities in favour of FTTH.
- Munifiber: UTOPIA is picking up steam. Focus is on businesses now and Integra Telecom is added as a business-oriented service provider. Meanwhile, FuzeCore launched a 100/100 Mb/s service at 147 $/mo in the residential market.
- Business VAS: Eurofiber (a Reggefiber sister company in the Reggeborgh holding) launched a surveillance service with a third-party SP, DIT is beveiligen.
- Separation: Telstra may be allowed to buy into the NBN (capped at 49%), by first contributing fiber assets in exchange for 20%. One condition would be for the company to be functionally (?) separated.
- DOCSIS 3.0: Virgin is testing a 200 Mb/s service, but here is why it stands no chance against FTTH.
- 3-D: Digital Hollywood wants it to come to our homes and indeed one consultancy expects up to 10% of homes to be upgraded by 2012. Meanwhile, the new Pixar film UP opened the Cannes festival.
Thursday, May 07, 2009
- This is a WBA (wholesale broadband access) deal, not unbundling (ODF access, which is not really an option on PON networks anyway), which was killed years ago. Perhaps the new FCC could reverse that. Obviously, Verizon is trying to stop it, as is described here (free registration). Are they making nice with the FCC by doing this deal?
- A wholesale deal makes Fiber Extreme not just subject to any pricing squeeze from Verizon, it makes the company much more dependent on Verizon for provisioning and innovation. Or so goes conventional wisdom. It is remarkable to see here that the deal comes without portal, email, content and security. Fiber Extreme will be bringing its own value-added services, including Google Apps Premier. And so goes unconventional wisdom: innovation is not only created at the active layer, it can be done at the services layer as well. In fact, new services, that fiber is so desperately in search of, are here today; they are called Web 2.0.
- Will Verizon learn that wholesaling (and unbundling) will actually help it fight off cable?
Tuesday, May 05, 2009
- Cyrte plans to create value by running Bol.com in a better way. No chance. The Cyrte people may be smart at finance, but they are not in the business of running an online store. I know my Stravinsky, but that doesn't make me a composer.
- Cyrte scored a good deal and plots an exit by selling Bol.com to a greater fool. Could be. The greatest fools can be found at the stock exchange, and the IPO climate seems to be clearing. Vodafone Qatar was successful and Skype is planned for next year.
- Interest in Bol.com was minimal and Cyrte pensils in a sale to a trade buyer. This is the intriguing option. In theory, a party such as Amazon could always afford to pay more than Cyrte because of synergy benefits. One particular party comes to mind: the Media-Saturn-Holding, operating the Media Markt and Saturn stores in Europe and controlled by the Metro Group. The websites connected to these stores are not online stores, but that is changing. After the Summer, both chains plan to operate web stores.
Saturday, April 25, 2009
Two years ago, I argued that it was a great fit for Amazon.com. Bol.com, much like Amazon, is venturing beyond books into electronics and it too has fierce local competition from an eBay affiliate: Marktplaats.nl (classifieds).
Financial details of Bol.com are not disclosed, but let's see how they compare:
- Sales 2008: Amazon $19.166bn (+29%), Bol EUR 224m (+31%). This makes Amazon 65x larger (at current USD and EUR rates). Growth rates have pretty much converged.
- Employees (at present): Amazon 20,600, Bol 230. On this metric, Amazon is 90x larger.
Amazon's market capitalisation is $36.3bn and it has $0.4bn in long-term debt, a total of EUR 27.7bn. One can only hope that Cyrte paid less than Amazon's 2x sales multiple valuation, which would translate into a maximum of EUR 400m.
Tuesday, April 21, 2009
Tuesday, April 14, 2009
- Complete separation of passive and active elements.
- Vertical integration of active elements and services.
- No cannibalisation of legacy income streams. All interests are perfectly aligned.
- It remains to be seen what will happen once the farmer decides to allow another (horse) keeper to co-locate at his farm. There doesn't seem to be a reason for the farmer to keep the newcomer at a disadvantage, so it looks like this will lead to some competition.
- Complete separation of passive and active elements.
- Vertical integration of active elements and services.
- Full cannibalisation because there is just a single service: travel. The 'pie' most likely isn't growing very much, unless service levels at competitors are higher, which may draw travelers away from their automobiles. Right now, this doesn't seem to be happening, as witnessed by competitor complaints. To be sure: the pie is growing somewhat because competition has urged NS to raise its level of service.
- Vertical integration of the active elements operator and the dominant service provider seems to be an inhibitor for the system to really work. (Art Price would say: You can't compete with your customers.)
- Adding wholesale service to ProRail would effectively collapse the passive and active layers into a single network layer. It doesn't seem to be a bad idea, because there doesn't seem to be room for a competing active operator anyway.
- Meaningful innovation arises at the active level (HoF is new to the farm). Innovation at the service level probably has more to do with service levels (railways are about taking people from A to B - no more, no less).
- Newcomers co-locating compares to xDF access (MDF, SDF, ODF).
- Newcomers not in control of active elements, are sold wholesale broadband access (WBA) by the operator.
- ... buy WBA access from the horse keeper (operator)? A newcomer wouldn't bring his own horses. Service levels may rise, but innovation is questionable. If a new service provider wants to sell new services, it is dependent on the horse keeper to teach the animals new tricks. But then the new tricks could become available to all service providers.
- ... buy xDF access from ProRail (owner): A newcomer would bring along his own stations. It could be possible in theory, because many stations are too small anyway and serve as bottlenecks, degrading service levels. How about this for a stimulus plan?
Tuesday, April 07, 2009
- Ownership: government, managed at an arm's length; majority i.e. at least 51%; may not be sold until 5 yr after launch; private investment expected; any RSP max 15%.
- Technology, topology: FTTP, max 100 Mb/s, to cover 90% (all towns of >= 1k people), elsewhere wireless/satelliet, 12 Mb/s.
- Total cost: AUD 43bn (initially AUD 4.3bn), funding through Building Australia Fund and the issuance of Aussie Infrastructure Bonds (AIBs)
- Time-line: 8 year roll-out; simultaneously in metro, regional and rural areas from early 2010; first national backbone and Tasmania (July 2009, to be built by Aurora); FTTP mandatory in greenfields from July 2010.
- Jobs: 47k jobs, 25k staff every year (peak: 37k).
- Government strategy: facilitate access to land, poles, ducts; e-health, e-learning; FTTP required for greenfields from July 1 2010.
- Regulation: consultation on measures considered at Telstra: access, functional separation, horizontal separation; response due June 3 2009.
- PON (effectively 2-layer; no unbundling, just WBA) or P2P (3-layer, WBA or ODF access) network?
- How about in-home wiring?
- Role of Telstra: horizontal and/or vertical separation; access to infrastructure; spin-off assets into the new company?
- Penetration targets?
- Will 1 Gb/s come into play?
- Clear choice for FTTP over FTTN.
- Mixed ownership of the passive layer.
- Open access.
- Structural separation.
Sunday, April 05, 2009
- Part of the iN2015 policy.
- FTTH PON network, in the familiar 3-layer model. Structural separation between passive and active layers, operational separation between active layer and any RSP owned by the same company (i.e. StarHub). Open access (OA) at layer 2 and 3 (slide 8).
- Passive layer to be built by OpenNet (SingTel 30%, Axia NetMedia 30%, SP Telecomms 15%, Singapore Press 25%). Subsidy SGD 750m. Residential wholesale tariff 15 SGD/line/mo, business 50 SGD/line/mo, no connection fee.
- Active layer to be built by Nucleus Connect, a separate StarHub company. Subsidy SGD 250m. Tariffs (include OpenNet fee; all in SGD/line/mo): residential 100/50 Mb/s for 21, 1.0/0.5 Gb/s for 121; business: 100/100 Mb/s for 75, 1/1 Gb/s for 860.
- Open access to retail service providers (RSP).
- Nucleus to be incorporated April 17 2009, RfP to formally close October 2009.
- Service launch April 2010.
- Coverage 60% by end of 2010, 95% by end of 2012.
- Universal service obligation from 2013.
- 2015 targets: 330k residential subs, 80k business subs.
- Pretty much fits my ideal for a FTTH network, featuring structural separation of the passive network. See what is does for ownership and bringing in third-party investors. SingTel may spin-off network assets into OpenNet. It goes even further than New Zealand (structural separation only once Telecom NZ gains a majority share) or KPN/Reggefiber (functional sepapartion 'only'). It is striking to see how functional separation in the NL is defended by referring to the competitive situation (nationwide cable coverage), which has nothing to do with it - see Singapore, where structural separation is forced because the network needs to function properly, not because there is competition from some other network.
- Too bad it's PON, not P2P (slide 24).
- The 1 Gb/s offering is neat, though.
- The residential offering is asymmetrical. We are seeing more of this, because FTTH needs to be positioned above DSL (i.e. more expensive), including business DSL.
- The 2015 targets appear to be quite modest, for a state that is home to 4.8m.
- We'll be on the lookout for RfPs to equipment manufacturers. RSPs are suggested to bring their own residential gateways (see slide 26). The NTE will allow end-users to get services from several RSPs at once (as limited by the number of ethernet ports on the NTE, I suppose).
- The 100/50 Mb/s service will be 21 SGD/mo for the RSP (just over 10 EUR/m0), the 1.0/0.5 Gb/s service will be 121 SGD/mo (60 EUR/mo) at the wholesale level for RSPs. The retail price for a triple play will add a margin plus the cost of both TV and telephony. It looks like an extended TV package is 37 SGD/mo, and telephony (line rental, unlimited local calls) is around 10 SGD/mo. The fast triple play would then be around 68 SGD/mo (EUR 33,50), the ultra-fast triple play 168 SGD/mo (EUR 83), before earning the RSP a margin. I suppose the triple play will be commercially available for under 40 EUR/mo.
- MobileOne lost this round, but has stated it will be a RSP. Sureley SingTel will be one too.
Thursday, April 02, 2009
Monday, March 30, 2009
- making a significant contribution to economic growth;
- neither discouraging, nor substituting for, private sector investment;
- avoiding entrenching the position, or ‘lining the pockets’, of existing broadband network providers;
- avoiding excessive infrastructure duplication;
- focussing on building new infrastructure, and not unduly preserving the ‘legacy assets’ of the past;
- ensuring affordable broadband services.
- The vehicle for investing the subsidy will be crown-owned: Crown Fibre Investment Co (CFIC). It will invest, alongside co-investors, in Local Fibre Cos (LFCs). CFIC will hold up to 50% of the shares of the LFCs.
- "Selection criteria will be focused on several aspects – the amount of additional fibre coverage being proposed, the proposed capital structure (including the parties’ relative capital contribution requirements), the commercial viability of the proposal, consistency with government objectives, and the track-record of the partner."
- "The government’s shareholding may be concessionary, and in particular may be subject to a lower rate of return than the partner for an initial period (for example, up to ten years). These provisions will be negotiable."
- "LFCs will not provide retail services. However, the government will not exclude partners that own or operate telecommunications retail operations, but such partners may not have the majority of voting control on the board of LFC (unless they divest themselves of any retail business). Telecom, and other telecommunications operators with retail operations, will therefore be able to participate in the contestable selection process, subject to the above requirement."