Fiberevolution

Deutsche Telekom deploys FTTH... in Slovakia!

2009-11-09T12:28:19+01:00

For the first time I've seen a firm announcement of numbers for the T-Com FTTH deployment in Slovakia. According to Broadband TV News, T-Com now passes 275 000 homes in Slovakia. According to this press release from earlier this year, the solution is GPON and the vendor is Huawei.

What's interesting here is that T-Com is a subsidiary of Deutsche Telekom who seems - so far - to resist any pressure, market and otherwise, to deploy FTTH. Which goes to show that FTTH incumbent plans are a good measure of effective competition: most likely, if they have no plans, it's because they don't have much serious competition either...

In Slovakia, of course, T-Com faces Orange, who started deploying FTTH first.

London & DC in November

2009-11-09T11:57:06+01:00

I will be in Washington DC briefly on November 17-19th. I would gladly share a beer or two with some of the esteemed readers of this blog, probably on the afternoon / evening of the 17th would be best. Let me know if you're available and interested!

I will also be in London the week after with some availability on the evening of the 23rd. If anyone is game for dinner or beers, let me know as well!

Look forward to meeting you out there on the road!

THD92 is back from the dead!

2009-11-06T10:47:02+01:00

Yesterday morning in my snail mail box there was a brochure for the THD92 project. This brochure was distributed as a supplement to the monthly rag we receive from the 92 department. It's essentially propaganda, but when it's propaganda about fiber, I can't help but being interested!

This is what the cover looks like:

I looked at the interior and found it surprisingly accurate. It's trying to highlight the benefits of fiber to laymen and -women, and it does, in my opinion, a surprisingly good job of it. You might argue that my wife is hardly a laywoman fiberwise, but she told me she'd found it very clear and accessible too.

The booklet describes the nature of the project, the financing, how it will be rolled out, etc. On this last aspect, as the next two scans will show, it's not good news for me:

This graph shows where the fiber will be rolled out first. Unfortunately, I like in a detached house and these are at the very bottom of the list... But things get worse!

I live in Colombes which, with my luck, is in the lowest possible shade, meaning that deployment here will not happen in a good while. I'll be lucky if I have fiber by 2015, especially if, as many public driven projects do, the planning for this one slips. Maybe I should move abroad and rent my house for 5 years. Then when I come back I can be just in time for fiber!

THD92 is an interesting project in that it is designed as technology agnostic and open. The brichure even explains how MDU managers or owners can ask THD92 to deploy the vertical so as to ensure that none of the service providers will effectively own the vertical. The following graph explains how and where service providers can "pick up" the last mile network deployed by THD92:

And finally, of course, the obligatory "this is good for you" graph. There's another infographic in there that shows the time needed to download a movie, mp3s, etc. via DSL and via fiber. I haven't reproduced it here since these are classics, but I did find it surprising that a public financed project would list the time needed to download divx movies... Anyway, this is the more generic "why you need fiber" infographic:

So THD92 is back from the dead. It's going to be interesting to see if and how Numéricable (who owns 80% of the consortium selected to deploy and manage this infrastructure project) is going to find the ~500m EUR they need to finance this deployment considering their current financial situation...

The point of no return...

2009-11-05T13:00:00+01:00

There's been a lot of buzz lately around the recent findings of an Ipsos-Mori survey in the UK related to so-called music "piracy". The key finding of this survey is that people who admit to illegally downloading music spend on average £33 more on purchasing music every year. That's nearly double the amount of spending declared by people who don't admit to downloading music illegally (average of £34).

Why is this making noise now? I don't really know. There have been numerous surveys ever since the Napster incident that have demonstrated this. Each and every one of them has been dismissed by the music industry as irrelevant, skewed or not aligned with their own "research". As we say in French, "Il n'y a pas pire aveugle que celui qui ne veut pas voir."

The combination of this latest bit of information, reading Chris Anderson's Free and a great talk by Chris Castiglione at Ecomm got me on a new trail of thought though, which I'd like to share with you.

There's no denying that sales in recorded music have gone down over the last ten years. Unlike what the music industry would have us believe, piracy is not the only reason although it is a contributing factor, no doubt about it. The way I see it, the reasons are:

the gradual breaking up of the album model that was enabled by digital music
the realisation by customers that the music industry had been gauging customers for years
the plethoric offer of "free" legal music online
the ease of use and gratuity of "pirated" content
spending gradually shifting to other media or cultural goods

And yet, heavy downloaders purchase more music than others. That hints at an essential misdirection of the efforts of lawmakers to crack down on lawbreakers. What would be really interesting would be a study looking into the music spending of casual listeners, people who are not passionate about music but just listen to it occasionally. How has their spending evolved?

My suspicion, which I'd like to see verified with numbers if they exist, is that their spending has dwindled to next to nothing. Not necessarily because of music piracy, but simply because if you're a casual listener you have ample opportunities to hear the music you want for free, legally or illegally.

Think about it. People used to have to buy a CD album to get the single they liked. Today they can just buy one song on iTunes or Amazon and stick on their ipod Nano. Spending ten years ago was £20, spending today is £1. And they're more satisfied than they were ten years ago. Assuming these people represent the vast majority of music buyers (which I strongly suspect is the case) that alone explains the dramatic drop in CD sales.

In other words, the music industry is paying the price of a historically constrained delivery model that suddenly became unconstrained thanks to digital. This is exactly like you're butcher selling you 600g of mince meat when you only ask for 500g. Except they were selling you 12 tracks when you only wanted one.

The question then, in terms of response strategies from the music industry is: is there a way for them to shift the market back to people buying what they don't want? I would say the answer to that is a resounding no. Which is why three-strikes, were it even technically viable (which it isn't) won't change anything.

But there's another fallacy around the thinking of the music industry which I think is infinitely more dangerous for them. I had this intuition for a while that the execs in the music industry think that if they could somehow eliminate piracy, the market would shift back to the glorious peaks of the late 90s. Reading Anderson's Free I think I understand now that their thinking is even more deluded.

In Free, Anderson explains how you can't map a price of zero in a price elasticity graph. There's a complete discontinuity between a 1p spending and a 0p spending. This made me realise that the music industry actually thinks that if they could eliminate piracy all of the "free" downloads could then be monetised. Which is a fundamental misunderstanding of what's happening and the appeal of "free".

Any paid transaction is going to be weighed in a cost/benefit analysis by the purchaser. Even impulsive purchasing goes through that process. Thinking that your price elasticity curve still means something when you reach a price of zero - in other words that the infinite spike on the far left of your graph actually means something from a market perspective - is absurd.

And that leads me to the key point of Chris Castiglione's presentation at Ecomm last week. The title really says it all: Copy what can't easily be sold and sell what can't be copied. Of course, one of the key outputs of his presentation is that the industry itself ultimately becomes useless, at least as an intermediary to distribution and a means to collect payments. But he's got it right: artists can only thrive by embracing this new paradigm where the music itself becomes a commodity and what customers value is interaction, proximity, unique experiences that cannot be replicated digitally.

Inevitably, Chris got a question at the end of his presentation asking "how Prince would go on making millions with such business models". Chris answered that the new models would likely generate less upper class musicians and more middle class ones. I thought that was a very polite answer indeed. Mine would have been "who cares about Prince's revenues?" The music industry has been using the argument of "protecting the artists" to defend an obsolete business model when really the only artists they want to defend are the one's that don't need defending: the billionaires who have become part of the industry themselves...

I will end this diatribe by pointing you to a really interesting experiment that was undertaken by email friend and talented harmonica player Richard Hunter prompted by Derik Sivers of CD Baby fame. Following Derik's recommendation, Richard started selling his whole stock of CDs at gigs, even if the price paid by the end customers was zero. Quoting Richard:

I brought 50 CDs to the gig. I repeated over and over to the crowd, starting with my hellos, that I wanted 50 people to go home with CDs, whether they paid for them or not. Ultimately I sold or gave away 36 CDs at prices ranging from $0 to $20 for total revenue of $156, almost exactly $4.33 per unit.
For this size crowd--about 100 people--normally I'd have sold about 15 CDs at $10 each. So the total take was similar, my cost was about $20 higher (about $1 per CD), and over 20 people--1/5 of the crowd--went home with my music who otherwise wouldn't have. And I don't think anyone at that gig will forget me soon. The goodwill I generated today was substantial. A lot of people were smiling in that crowd. The people who ran the [venue] loved it, too.
[...]
For me this experiment was a success. I'll certainly try it again. I'd MUCH rather end up printing a couple thousand more CDs to sell at an average price of $4 apiece than sit on boxes of CDs at home that a lot of people won't buy at $10 apiece.
If you're selling your CDs at your gigs, I suggest you give it a try. Tell the audience that everyone is going home with a CD, ask them to pay whatever they want to pay for it (I told my audience I would accept anything from $0 to $1 Million), and see what happens.

This is the face of the "new" music industry...

Summarize Ecomm Competition

2009-11-04T10:16:47+01:00

Surely you all remember this monument of absurd humour that is the All-England Summarize Proust Competition. I'm hoping that my attempt to summarize Ecomm is not quite as absurd, although I'm slightly worried considering James' complete cop-out and Brough's systematic factual approach.

Rather than comment on all presentations I attended (as I've been known to do in the past) or even just to locate the highlights for me, I've decided to take more of a global approach to summarizing the event by listing what I believe to be the key questions or issues that it raised. These - incidentally - are issues that I might address from my own viewpoint in future blog postings.

Clearly the very first question that jumped at us at about 9.05 AM on the first morning of the conference was Can Telcos Change? I find that the telecom world is divided into three essential categories when it comes to answering that question. The first, and largest, doesn't understand why they should. The second believes that they can and must. The third believe that they can't and will die or transform through collapse. Sadly, very few of the first category were present at Ecomm or they would have perhaps swiftly changed their outlook on telco future. Many presentations during the conference addressed this, from Martin Geddes' insight on redefining what a voice service might be to Julien Salanave's future scenarios for the industry and Stefan Hopmann's presentation of Swisscom's Open API program.

Another thread that emerged as soon as James Enck took the stage centers around the economic contribution of the telco sector. James' presentation was a welcome smack in the face for those optimists who think that the crisis is over, or that the telecom sector escaped unscathed. One of the questions he raised (in his darkly humorous way) was What do telecoms have to contribute to the bigger picture? (The Kindle, he pointed out, wasn't gonna cut it.) If I understood his point correctly, there's a futility around the obsession the telcos have with hollywood and leisure services when their infrastructure and services could be contributing to so much more. A few other presentations gave us a glimpse of what that 'so much more' could be although to be fair I sensed a bit of a paradox here when numerous other presentations seemed to be themselves focused on 'feel-good' as opposed to 'necessary' services.

A third issue which I found really interesting though a little hard to grasp for a wireline focused guy such as myself centered around the Future of Mobile, both as a network and as a purveyor of services. Brough Turner, Sascha Meinrath and William Webb - amongst others - explored the issues around spectrum allocation and the potential for non-regulated wireless services. Moray Rumney gave a masterful presentation on mobile technologies all the way up to LTE and why the obsession of vendors and mobile operators alike on top speeds as opposed to average speeds might spell their doom.

Finally, to me the last crucial question which came back time and again in presentations and discussions centered on Redefining Communications for the 21st Century. Throughout the three days it became very apparent how legacy technologies - and perhaps more importantly legacy mindframes - were stopping a much needed rethink of communications. Martin Geddes touched on this looking at what a modern Voice Messaging service should be, the strong presence of Google Wave people hinted at what collaborative communication might look like, and various innovative vendors like Rebelvox and Voxygen examined what communication services should be when redesigned from scratch. (Note to self, if I ever start my own business, don't use "Vox" in the name)

There were, of course, other topics touched on during these amazing three days of conference, things around Augmented Reality, Mobile Devices, and a variety of other interesting subjects. But these didn't necessarily get my mind juices pumping like the above four threads did. My own presentation was focused on aspects of the FTTH business model and I have uploaded it to slideshare.

This was my first Ecomm, and it's an understatement to say that it fulfilled its promises and then some. The organisation was spotless, the speakers were of very high caliber both content-wise and as speakers, the informal socialising was excellent and I came back loaded with business cards of really interesting people. If anything, I wondered at times if it wasn't too much. It suggests that perhaps there is a virtue in the occasional guy doing a sales pitch you care nothing about as it gives you an opportunity to check your emails or go to the loo...

I probably won't be able to make the San Francisco event in 2010, but I have every hope of attending a future European event and maybe heading out to California in 2011 if Lee will have me again. For a sense of what the conference and the speakers looked like, I have uploaded my photos of the first day of speakers and the evening social.

The Return of the Walled Garden?

2009-11-03T14:00:00+01:00

The debate on Net Neutrality is raging on. Sometimes, they say, a picture is worth a thousand words and we certainly have seen thousands of words on this particular topic. I like this graphic design of what an ad for internet access might look like in a non net-neutral world:

Torrent client learns to self-throttle...

2009-11-03T10:00:00+01:00

I am planning a series of posts on bandwidth hogs in the coming days, since the topic has resurfaced with a vengeance amidst discussions of net neutrality. I have mentioned in the past that fighting against peer to peer was a silly attitude for telcos who should be working with peer to peer client developers to ensure a non-disruptive use of network resources by said clients.

A new example of this is visible in the recent utorrent announcement relayed by slashdot today. Essentially, the new utorrent client will evaluate the amount of congestion in the network on the basis of the time needed for a packet to reach destination and will regulate the data load down and especially up on that basis to avoid using too much network resources when available.

Paradoxically, this might not be such good news to service providers who like the bandwidth hog argument to justify bashing net neutrality. If bandwidth hogs are no longer there, the emperor might very well stand naked...

Broadband in Bulgaria

2009-11-02T16:18:37+01:00

Last year, Brough Turner's remarks on Romanian fiber access and the University of Oxford Saïd Business School's Broadband Quality study prompted me into looking at Eastern European fiber access. It turns out that in addition to Romania, five other countries stand out for fiber access, namely Bulgaria, Russia, Latvia, Slovakia and Slovenia.

More recently, Yankee Group and Stratix have been working on a project for the FTTH Council to look at broadband and FTTB in Bulgaria and the socio-economic impacts it might have. The hard part is to ascertain exactly how the services delivered equate with Western European technical norms, but for simplicity's sake I will call these services FTTB for now. Did you know that 57% of Bulgarian broadband is FTTB? Admittedly, they have the lowest overall broadband penetration in Europe, but Sofia still ranks 10th in the most recent Oxford Saïd Broadband Quality city ranking.

In order to track the importance of the broadband connections and the broadband quality to the welfare of connected Bulgarians, we have had a survey up online for some weeks now. This survey will close in a few days and I wanted to give anyone reading me the opportunity to not only fill the survey for themselves but to spread the word around so that more people in Bulgaria could get an opportunity to fill this survey.

Just to be clear, the survey is in Bulgarian and open only to Bulgarian nationals living in Bulgaria. If you fit these criteria or know people who do, please spread the word around. Here is a link to a Bulgarian blog posting by ISOC luminary Veni Markovski that explains the context and links to the actual questionnaire.

100Mb/s guaranteed bandwidth for US$13/month... from HKBN!

2009-11-02T10:00:00+01:00

Yesterday HKBN made an announcement that they were lowering the price of their bandwidth guaranteed 100Mb/s symmetric fiber service in Hong-Kong to HK$99, roughly US$13. HKBN already is one of the only providers worldwide to offer 1Gb/s symmetric service, and the only one (to my knowledge) to offer a moneyback guarantee on broadband quality. They currently own a little above 20% of the broadband market in Hong-Kong according to their latest numbers, and they are the fastest growing (and most profitable) broadband provider there.

This is no insignificant price decrease since HKBN's 100/100 offer was previously HK$268! Awesome indeed! Yet more proof that acquisition is more important than ARPU in the FTTH game. It will be interesting to see the impact of this announcement on their take rates in the coming months.

Ecomm has started

2009-10-28T10:17:33+01:00

It's 10:12 here in Amsterdam and we're already on the 4th presentation here at ecomm. I love it. There's a very active twitter backchannel under the #ecomm hashtag. I encourage you to follow that if you can. The big question of "can telcos change or will they just die" has been addressed, but not conclusively answered yet.

I'm speaking in an hour or so. Wish me luck!