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  1. #1

    Default There’s gold in them thar fibers!


    Next-gen investments provide telcos an entrée into the content driven world

    by Keith Willetts, TM Forum

    In an industry which, at times, seems to move at about the same rate as molasses being poured from a jar, the communications and media world got a whammy recently when Apple announced it was lifting Digital Rights Management (DRM) restrictions on all songs being offered on iTunes by April.

    This is big news, especially when you think about how hard record companies have been fighting piracy over the past few years. They succeeded in getting peer-to-peer sharing sites like Napster and Kazaa shut down, and they have not hesitated to drag individuals into court for the dreadful crime of sharing songs with others.

    How things have changed! The record companies probably figured out that they are going to lose the DRM war anyway, so why not make some money? Apple’s new tiered pricing means rather than just the usual US$.99 cents you pay for a song on iTunes, you might also pay $1.29 or the lower $.69 cents, which likely will be reserved for older songs.

    Technically speaking, record companies could come away a winner if they choose to have all new releases priced at the $1.29 level, and customers could feel more empowered by being able to copy the song to as many devices as they want without worrying about the Coldplay police breaking down their door.

    "...the Apple announcement is just a small example of the vast opportunities available for communications companies

    In a direct challenge to Nokia, Apple also announced it would provide iTunes downloads over 3G rather than just over Wi-Fi. It wouldn’t be a huge leap to say the next step down this DRM-free road is removing restrictions on movies. Yippee! Hopefully an end to those ghastly “Piracy is Theft” diatribes at the start of each DVD will quickly follow. But more strategically, we’ll be seeing a vastly different digital value chain than we have today.

    We could see a day when there’s an extremely simple way of downloading music, movies, TV shows, books and anything else that can be turned into a digital format and more with no complexity getting in the way. You just pay your money, and that’s it.
    Invest in infrastructure

    While many industry watchers are on the “gloom and doom” bandwagon, I think the Apple announcement is just a small example of the vast opportunities available for communications companies. Telecom is in a very strong position to take advantage, shifting money from where it’s currently being spent (in shopping malls, etc.) to being bought and delivered via their own portfolios. No need to invent brand-new services that nobody ever thought of before; it’s far easier to substitute for some existing service by doing it cheaper and more easily. It’s going to happen, so telecom companies need to grab the turf before others do. But the challenge is not just to deliver the bits, it’s about creating a great customer experience when acquiring entertainment — it has to be a complete service: easier, cheaper and better than browsing through a record store or whatever.

    During a recession period, the whole pie gets smaller, so winners and losers will be determined by who figures out how to take money from someone else. Telecom is in a perfect position to succeed here, because of the move to online commerce. Key to their success will be to make appropriate investments to facilitate this, but unfortunately there are roadblocks that operators have to go through first.

    We’re seeing all these fantastic services like being able to download TV programs, IPTV — and 3D television isn’t nearly as far off as you’d think. All of these services and others will need significantly more bandwidth than we have available today.

    When I was in Japan recently and saw a demo of 3D television, several people told me they had 100 megabit per second fiber coming straight into their homes. You might think that’s overkill, but you’d be surprised. Just a few years from now we’ll think 100 megabits is a joke, and gigabit speeds to the home will be the norm. And yet today, most of the world is living with 2 or 3 megabit connections if they are lucky (I’m not, I’m stupid enough to have bought a house a few miles from the central office, so I have to be grateful for about 500K!).

    In the computer industry, Moore’s law has ruled so long that nobody agonizes too much over the business case for higher chip speeds or more memory. Imagine if Intel said it wouldn’t develop higher speed chips until the applications were proven. In that chicken and egg conundrum, the capability has to be there before the application. Same for communications — bandwidth demand will mirror memory and chip increases and must be there before a really vibrant online industry can take off and truly change the shape of the market.

    But hanging back is basically what telecom is doing. Leery of “build it and they will come” telecom has, not unreasonably, taken the easy steps of DSL and tweaks to GSM to improve download speeds. But we are in real danger of the market demand moving much faster than new fixed or mobile infrastructure roll-outs, and the recession won’t help nervous CFOs any in changing that position.

    "Time [for government] to get out of the way and let the market do its job; time to stop regulating by looking in the rearview mirror

    But it’s not just the communications companies that need to seize the opportunity. Governments don’t help at all when it comes to letting the market do its job. Regulators around the world have layered so much legislation on infrastructure players that they have stripped out any commercial incentive to invest in new technology in access networks. So then we go full circle and start talking about the taxpayer having to subsidize it! OK, so market economics have had a bad press lately, but this is moving us towards the era of Soviet style five-year tractor production planning.

    The market demand is there and big shifts are occurring that will dramatically increase the demand for communications services; the major players have the cash if not the nerve, but the big barrier is the dead hand of government and regulation. If you have to give away your asset to your competitors, why would you ever invest in it?

    Time to get out of the way and let the market do its job; time to stop regulating by looking in the rearview mirror; time to move away for stopping things through regulating and start using tools that will incentivize and enable the kind of high bandwidth digital future where we actually change the economy and how people live and work.
    Telecom opportunities abound

    It’s clearer than ever before that we’re moving toward a digital economy. Almost every week we are hear of yet another bricks-and-mortar retail chain filing for bankruptcy or going into liquidation. As more and more people buy goods from e-tailers like Amazon and download music, movies, books and other media from a variety of online sources, telecom is poised to become more vital than ever to the shifting way people buy and consume goods and services.

    But instead of just sitting back and waiting for the digital economy, telecom operators have to step up and spend the money on their infrastructure. They can’t go it alone, however, and need to be lifted from the shackles of regulation, which at the moment is disincentivizing players from making these crucial investments in fiber and other technologies.

    Once the operators are able to start pouring money into infrastructure again and creating the environment to not only support but actively foster a new way of living and working, you’ll see a very rosy future become a reality for the communications industry.

  2. #2
    When IPTV (not quite sure the correct term) was out I was amazed when my client told me he wanted to connect his TV to his router.

    Telco's here in the country is investing on the fiber optic but hey we're still way way too far from the other asian countries. That's the result of massive corruption.

  3. #3
    Infra for IPTV is already in key cities here in the Pilipins.
    Cebu has one.

    DVBH was first offered maybe to test the market.
    But I think no one is interested. Ikaw bro, naa kay DVBH capable phone?
    Phones are available but still people use it mainly for text/SMS.

    Bisan unsa pa na ka nindot ang technology if there are no takers, walay mogamit, walay mopalit dili gyud na mo succeed.



    .

  4. #4
    Wala man DVBH capability akong Nokia 3310 nga phone.

    DVBH phones antenna ra katapat sa mga China phone. lol

  5. #5
    hahaha....see?

    wala man gani ka nikuha ug DVBH phone...unsa na kaha ang IPTV?
    hinuon, depende ra pud ni sa marketing technique para mo subscribe ang mga tawo..


    .

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