www.comms-dealer.com
MARKETWATCH
EXIT MATTERS...
BROADBAND
update:
By Nigel Cook, CEO of Evolution Capital
In September BT Wholesale took
the ISP community by surprise
In its glory days as a beacon of Edinburgh’s
financial respectability, the actuaries at
when it more than halved
Scottish Widows set rigorous standards. They
the price of bandwidth for
were rumoured to want the first question on
a proposal form to be, ‘Are you immortal?’.
broadband tails connected to
What actuaries do, of course, is to take
its new NGN. Andrew Dickinson,
what they know about each runner in Life’s
handicap and price the market with the
Sales & Marketing Director at
acuity of a Ladbroke’s odds-setter. Now
Griffin Internet, examines the
that self destruction no longer invalidates
life assurance payouts, actuaries who have
implications of this move.
offered cover to France Telecom personnel
might be getting itchy. Apparently, 24 France
Telecom personnel have committed suicide
since February 2008 and Louis-Pierre Wenes,
the deputy CEO of French operations, has F
or the first time since the rise of the LLU
providers, a BT based broadband product
could be price leader. Combine that with
Andrew Dickinson
asked CEO Didier Lombard to relieve him the forecast 75 per cent WBC UK coverage by
of his responsibilities. His replacement is spring 2011 (coverage currently sits at 40 per With the introduction of new technologies
Stephane Richard, already CEO designate, cent – 50-55 per cent by March 2010) and it such as Fibre-to-the-Cabinet (FTTC) and Fibre-
and analysts see the move as offering appears that the broadband market may have to-the-Premises (FTTP) reaching speeds of 40-
an acceptable solution to management a very different landscape over the next few 100Mb/s downstream and 5Mb/s upstream,
and investors, as well as mollifying press, years. It will be interesting to see whether any there is significant business demand for premium
labour union and political interests. of the LLU providers lose their momentum in the class broadband. That’s where Quality of
campaign to migrate customers away from Service (QoS) profiling becomes so effective
The most recent WHO figures from 1999 put BT. The knee-jerk reaction would be to lower in building assured rate products for critical
the French suicide rate at 35.5 per 100,000 bandwidth costs too, but a further reduction business applications. BT will be releasing real-
and around half of France Telecom’s 191,000 only fuels the fire for a spree of low cost, time QoS options at the end of 2009 that will
personnel are locally based. The company’s unlimited, low margin products, much like we underpin, for example, high quality voice
suicide rate is not above the national average have seen in the residential broadband market. and videoconferencing services, and Annex
but an actuary can explain why they will M which enables downstream bandwidth
likely spike in 2009. The reasons seem to be This could be counter-productive within the to be traded to boost upstream rates. This is
a deteriorating working atmosphere and a business sector, where quality, reliability and especially appealing to SME customers for IP-
wide ranging re-structuring process. Michael performance are more important to retaining VPN, voice services and faster data transfer.
Kovacocy of Daiwa Securities believes that customers than price alone. Furthermore, the
the Wenes resignation, by leaving the current cost of migrating end users from BT to LLU is Some say that the residential market challenges
CEO in post, will avoid de-stabilising change more than three times that of moving between always come to impact the business market
at the company... ‘Hopefully a line will be ISPs on BT’s network. LLU has to be much a couple of years later. In the last few months
drawn and management can concentrate less expensive than BT or offer a far better we’ve seen it develop at double speed. Business
on its stated cost control objectives’. product or there will be no reason to switch. users are demanding more bandwidth to serve
multi party video calling, HD video streaming,
Interestingly, while France Telecom was For the reseller and their customer the effect hosted VoIP, larger remote backups, remote
privatised in 1998, two thirds of the staff are is likely to be less around entry level price networking, video enabled commerce and 30
on civil service contracts. It’s always hard and more around usage. Remember that simultaneous VoIP calls. Most of these need to
for a public service culture to adapt to the for the average user two thirds of the cost happen all at the same time. As a result, usage
discipline of having accounts written in of their broadband line is the tail, and the per user could easily double from today’s levels,
black. We may see similar stresses here when reduction in BT’s price for this is less significant. in what looks likely to be another bandwidth
commercial discipline means, as it will, an It does mean that customers will be able to explosion. This time it’s clear that the market
agonising reappraisal of public service gold consume much more bandwidth at a lower has moved on and is ready for premium class
plated pensions. One solution (not a tip) might incremental cost. The risk of heavy users broadband. The premium broadband consumer
be to investigate the shares of the efficient will be less to ISPs and we are likely to see is alive and kicking and demanding premium,
and acquisitive funeral director, Dignity. many of them relax their Fair Usage Policy unlimited, configurable, bespoke broadband on
n
(FUP) and offer truly unlimited products. a resilient network.
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Great Christmas giveaway starts November 23rd – call for more information.
www.comms-dealer.com44 COMMS DEALER NOVEMBER 2009
P44 PG Griffin.indd 1 29/10/09 13:45:24
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