Enterprises not driving FttH
The business market is often viewed as a driver of innovations, which are then pushed further downstream once the initial investment costs have been recouped.
That was the way of things for decades, but the arrival of the Internet put an end to this business model. It was the 13-year-olds who drove the Internet into the residential market, a fact that took both the telcos and the business market by surprise.
The telcos have never been able to recover. Their whole business model was based on very high margins in the top end of the market (often a few hundred per cent) and these margins slowly came down, depending how quickly the telcos decided the services and products should be provided for customers further downstream
Such a process could easily take a decade or longer.
The telcos were also unable - but, most importantly, unwilling - to adapt to these changes. They believed that their monopolistic position would allow them to continue to force their decade-old models onto the market. This is the key reason there is so much turmoil in telco markets around the world.
Most governments had completely, or largely, retreated from this market during the privatisation processes of the 1980s and 1990s, but the old business models are now beginning to hurt societies and economies and this is forcing the governments back into the arena.
With Internet and broadband access the battlefield is now located around the infrastructure needed for the digital economy. Can the old business model do the job here? Could the enterprise market drive the rollout of national fibre networks?
The answer is no. In general terms the volume size (number of premises connected) of the business market is relatively small - often not more than 10% of all connections. It is therefore unlikely that the business market will be a driver behind the rollout of national fibre (to-the-home) networks.
Nevertheless CBDs and business centres are viewed as priorities in such cases. However, apart from the CBDs of metropolitan cities and a few newer business parks, fibre-to the-premises is certainly not widespread. Without strong government guidance it is most unlikely that the usual top-down approach by the telcos would deliver that infrastructure in any timely fashion.
Where we do see some progress is in situations where enterprises - but more likely - large government organisations (healthcare, education, municipalities) join forces and use their combined market power to set the agenda for new fibre infrastructure.
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