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Future Broadband Business Models
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This study is supported by BT, GSM Association, the Broadband Stakeholder Group, the TeleManagement Forum, and Telecom TV.
Publication Date: April 2008
Report Summary
Intense competition and falling prices in maturing markets coupled with the challenges presented by changing usage patterns and the adaptation of new technologies are all starting to threaten the viability of the current broadband business model.
This report reviews the pain points in current operational scenarios, case studies of successful strategies and emerging new entrants, and profiles the key threats and future opportunities to the industry. It outlines a number of key steps to develop business models that can be viable in the evolving marketplace, and touches on the future of core Voice & Messaging revenues, Video Distribution, P2P technologies, the Next Generation Network, E-commerce Value Added Services, and more. The report identifies and profiles a new $250Bn market opportunity.
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Key Points
- Pain points in current operational scenarios.
- Case studies of successful strategies and emerging new entrants.
- Threats and future opportunities to the industry.
- Steps to develop business models that can be viable in the evolving marketplace.
- The future of Voice, Video Distribution, P2P technologies, the Next Generation Network, E-commerce Value Added Services, and more.
- New propositions, channels and partners for telco operators, cablecos, ISPs, NEPs, Device Manufacturers, Investors, and Public Policy bodies.
- Scopes an attractive new $250Bn market opportunity.
- hort, medium and long term actions required.
Who is this report for?
The report is for senior (CxO) decision-makers and business strategists setting business strategy, and for product managers, technologists, and strategic sales, business development and marketing professionals acting in the broadband arena in the following types of organisations:
- Fixed & Mobile Broadband Operators – to set and drive strategy.
- Vendors & Business Partners – to understand customer need and develop winning customer propositions.
- Regulators & Industry Standards bodies – to inform policy making and strategy.
Strategists and CxOs in Media and Investment Companies may also find this report useful to understand the future landscape of the broadband industry, and to help to spot likely winning and losing investment and operational strategies in the market.
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Business Context – The Changing Face of Broadband Distribution
The chart below shows how the telecoms industry today offers two dominant types of distribution systems for content and services.
1. Vertically integrated networks, like the Public Switched Telephony Network, its mobile equivalent, Next Generation Network replacements for these, and SMS messaging ("PSTN & SMSC"). Here, a dedicated network integrates connectivity, service and payment.
2. Internet access, where connectivity, services and payment are all separate ("Broadband Internet").
3. In the future there will be a wide range of new business and payment models which assemble devices, applications, content and connectivity in new technical and economic ways ("Other"). Wholesale markets will evolve greatly to support this. This original hypothesis, affirmed by our proprietary market research, is explored in depth in this report.
This study looks at the impact of this significant change on the business models of those in the broadband value chain.
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Key Questions Answered
This report uniquely answers 3 key questions:
1. "What are the business models for fixed and mobile broadband voice, video and data access over the next 5-10 years" - how will these revenue streams evolve for telcos and cablecos?
2. "What are the future wholesale and retail business models" - managing costs and revenues by learning from outside the telecoms industry.
3. "How to rejuvenate broadband growth strategies" – what are the new propositions, channels and partners for telco operators, cablecos, ISPs, NEPs, Device Manufacturers, Investors, and Public Policy bodies.
In addition, to help operators and vendors maximise future opportunities from broadband-based services the following questions are also addressed:
- What are the key pain points and problems in the current Broadband Service Provider (BSP) business model?
- What are the limitations of reliance on voice and video cross-subsidy?
- What are new potential upstream and downstream revenue models?
- Who puts money into BSPs today, and how does it gets re-allocated?
- Who makes the margins today and why?
- What are the drivers of economic activity inside and outside the network?
- What are the competing fixed and mobile distribution systems and their relationship to services?
- What lessons about wholesale/network business models can we learn from outside of telecoms?
- How long are vertically-integrated service models likely to survive? What are the opportunities for new entrants?
- What are the most successful players doing to combine multiple distribution systems to support the customer experience?
- What are the lessons from dead or dying distribution systems (ATM, ISDN, MMS)
- How much value will flow through new broadband distribution channels?
- How to improve core Voice and Video services?
- Which network ownership models will be most effective?
- What are the economics of QoS, and how to create better alternatives?
- What are the trends in traffic shaping and throttling?
- What is the potential for new wholesale intermediaries to grow beyond providing backbone and interconnect peering for access networks?
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Case Studies, Companies and Services, and Technologies & Applications Covered
Case Studies: Akamai, BT 21CN, BT Vision, e-TopUps, Illiad, Janet(UK), Joost, Kontiki, Limelight, LINX, Sky Anytime.
Companies and Services Covered: 3 UK, Akamai, Amazon, Amazon Kindle, Apple, Apple iPhone, Apple iTV, ASUS, AT&T, AT&T/Bell Labs, BBC, Blackberry, Blockbuster, Blyk, BSkyB, Carphone Warehouse, Cinema Paradiso, Cisco, Dell, Deutsche Telekom, Direct Connect, Disney, DoCoMo, DoCoMo iMode, Easyjet, Ericsson, France Telecom, Freebox, Gillette, Google, Google Phone, Hutchison 3, Intel, Liberty Global, Link, Livebox, Lovefilm, Lucasfilms, Maxjet, Microsoft, Motorola, Motorola Tetra, Moviebank, MSN, My Moviestream, Myspace, Netflix, News Corp, Nextel, Nokia Ovi, Pixar, Qualcomm, Ryanair, Scientific Atlanta, Setanta, Sky+, Skype, Slingbox, Sprint PCS, Swedish Metro, Swisscom Hotspots, Tandberg, Tesco Mobile, The Economist, Tracfone, TV Perso, Verizon FIOS, Verizon Wireless, Virgin, Wall Street Journal, Walmart, Yahoo!, YouTube.
Technologies & Applications Covered Broadband, Broadband Video, Broadband Voice, Cable, CDMA, CDNs, Deep Packet Inspection, DSL, Edge-Caching, Ethernet/ATM unbundling, Fax, Femtocell, FON, GSM, HDD, IMS, Internet Video, IP, IP Multicast, IP Stream, IPTV, ISDN, Linksys, Linux, MMS, Mobile TV, Muni Nets, MVNO, Mxit, Netgear, OpenID, OPLANs, P2P, PAN, Peak Shaving, PSMN, PSMs, PSTN, Telex, Traffic Shaping, VoD, VOIP, VPN, Wifi, WiMax, WLAN.
Forecasts Included
For 2006-2017: Wholesale and Retail BSP revenues by Fixed and Mobile Access, TV, Data, Voice & Messaging across 12 Western European and North American markets.
Summary of Contents (click here for detailed contents)
Part 1: The business model and a framework for change.
Part 2: Broadband service provider industry review - ISP industry, Entertainment, Voice and Messaging.
Part 3: Wholesale and what we can learn from network business models beyond telecoms.
Part 4: Competing distribution systems – theory and practice.
Part 5: Emerging and declining distribution systems - CDNs: A freight service for the digital world.
Part 6: Survey results & Commentary - Market Winners and losers.
Part 7: Future broadband revenue models and scenarios - BSP market sizing, Wholesale market opportunity.
Part 8: Conclusions & Recommendations
Pricing and User Licenses
Future Broadband Business Models
Publication Date: April 2008
Single User License*: £1,995 GBP Excluding UK VAT (if applicable)
Group License**: £4,450 GBP Excluding UK VAT (if applicable)
Corporate License***: Price on Request
* Dedicated license for 1 named individual.
** License for a group of up to 5 employees within a named organisation.
*** License for all employees within a named organisation.
NOTE: UK VAT at 17.5% is chargeable on orders from all UK customers and from non VAT registered customers in other EU Member States. Please supply your EU VAT registration number or add 17.5% UK VAT to your remittance.
Customer Workshops
The Future Broadband Business Models research raises a number of important questions and challenges for Broadband Service Providers (BSPs). To help companies take these findings forward and develop concrete action plans, Telco 2.0™ run interactive ‘Mindshare’ Workshops to provide a unique means to access this knowledge quickly and effectively, combine it with internal thinking, and produce agreed action plans for clients to exploit the opportunities presented.
Click here for details about the workshops.
Telco 2.0™ Future Broadband Business Model Team Biographies
- Martin Geddes – Chief Analyst, STL Partners/Telco 2.0™ Initiative
- Chris Barraclough – MD, STL Partners/Telco 2.0™ Initiative
- Keith McMahon – Senior Analyst, STL Partners/Telco 2.0™ Initiative
- Alex Harrowell – Researcher, STL Partners/Telco 2.0™ Initiative
Further information
Other Reports
- Telco 2.0™ Market Study
- Telcos' Role in the Advertising Value Chain
- Consumer Voice & Messaging 2.0
- The 2-Sided Telecoms Market Opportunity
Updated 15 May 2008
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