Multiscreen households will drive the adoption of very high-speed broadband
“Since we conducted our first FTTH Domestication Insights Study in 2012, new services have emerged that require very high-speed broadband connectivity – including cloud storage services, (video) streaming applications such as Netflix, and smart living apps that are triggered by the emergence of the Internet of Things,” says Karel Vandenbroucke from iMinds - MICT - Ghent University. “But will any of these services become the single killer-app the industry is looking for? Probably not.”
Yet, according to the researchers, the potential for residential high-speed broadband has never been more promising – as its benefits (such as high upload and download speeds and low latency) are no longer reaped just by a limited number of Internet junkies, but also by millions of multiscreen households that want to simultaneously run multiple apps on a variety of devices.
“According to the latest release of the iMinds digiMeter – a yearly survey that monitors media usage and trends in the Belgian region of Flanders – 77% of the households in Flanders have access to at least three screens; 21% even have access to the five screens – TV, laptop, desktop, tablet and smartphone – that are included in the digiMeter survey. And these figures pretty much reflect what is going on in the whole of Europe,” Karel Vandenbroucke continues.
Combining the digiMeter findings with the insights from a number of literature studies and the results from an FTTH living lab project in the Belgian city of Kortrijk (whereby FTTH users were studied in a real-life environment), this year’s iMinds study confirms that people who have not yet experienced FTTH do not see a need for it. Yet, once people are provided with (FTTH’s) higher bandwidths, they are going to experiment with those, be less concerned that they might exceed their subscription’s data limits, and interact with Internet applications in novel ways. Multiscreen households are the exponent of that trend.
“We think the industry should focus less on searching the killer-app – but rather exploit the opportunity of the multiscreen user, whereby services such as video streaming and time-shifted TV on a variety of devices will naturally drive bandwidth demand,” concludes Karel Vandenbroucke.
Demand aggregation as best-practice to maximize RoI for greenfield FTTH deployments
Researchers from iMinds - IBCN - Ghent University also presented their techno-economic views on potential roll-out strategies to maximize the return on investment (RoI) of greenfield FTTH deployments.
Dr. ir. Marlies Van der Wee from the techno-economic broadband network research unit within iMinds explains: “We investigated the various business models that are being implemented by new operators around the world. Some of them focus on deploying FTTH to all households in a specific area, without knowing in advance how this will translate in actual subscribers and revenues. Others, such as Reggefiber in the Netherlands, aggregate user demand before kicking off their deployment; they only start to deploy FTTH when they know a certain percentage of households in a given area will take up the service. Reggefiber, for instance, currently uses a 30-40% uptake number as an upfront threshold, depending on the region (as deployment cost per household depends on population density). Stimulating that uptake, however, is left to the various neighborhoods.”
According to the iMinds - Ghent University researchers, a very successful strategy to maximize RoI of a greenfield FTTH deployment is the one used by Google Fiber in the US, as they combine a demand aggregation strategy with local involvement.
“As part of their Kansas City deployment, Google Fiber has contacted local schools, hospitals and administrations – providing them with a free fiber connection if they manage to bring on a sufficient amount of residential customers. This local commitment furthermore provides easy access to rights-of-way and existing infrastructure, thereby reducing deployment costs significantly (up to 30%). This type of demand aggregation has proven to provide them with a much better, healthier business case, as they have reached an uptake of 50-60% of households within 2 years of deployment,” concludes Marlies Van der Wee.
iMinds – the digital research center of Flanders, Belgium – combines the strength of its 850+ researchers at five Flemish universities to conduct strategic and applied research in areas such as ICT, Media and Health. Together with its research partners (companies, governments and non-profit organizations), iMinds translates digital know-how into concrete products and services. In addition, iMinds supports researchers, young entrepreneurs and start-ups in the successful market introduction of their ideas. More info at www.iminds.be (Twitter: @iMinds).
Wim Van Daele, iMinds Media Relations - firstname.lastname@example.org; +32 9 331 48 23