There will be plenty of activity, and most of it will take place in the broadband arena. Not only will we see the launch of a range on new wireless broadband systems namely in the USA and the Asia Pacific region; we will also see new activities from the incumbents who will be stung into action by these news broadband developments.
The developments in broadband will occur in different areas, and different business plans will need to be developed. Over 10,000 players already exist in the broadband access market, and I expect at least another 100 new players to enter this market each month during 2004. The majority of these BSPs, however, will initially focus on access. There is a pent-up demand of around 500 million customers and those who are able to deliver the right ingredients (1M/2M speed, approximately US$20-50 a month, unlimited usage) will see significant growth. However, the market will continue to be price-driven.
The wholesale models are looking better and will improve further during 2004, with greater opportunities for local loop unbundling, line-sharing and DSL wholesale. The real winners will be the companies that can begin to develop business plans based on new revenue streams from new (value-added) broadband services.
In 2004 more BSPs will start to deliver DSL TV to their customers. Completely new business models will be required for both the telcos and the ISPs, and planning should begin now, to avoid problems such as the ones experienced by the early telcos in the mid-1990s, and the dotcoms a few years later, which led to the collapse of many companies.
It will also be most interesting to see what the incumbents reaction will be to all of this, as they are currently caught between a rock and a hard place. The financial market will place severe limitations on the amount they will allow the company to invest which, in itself, opens up interesting opportunities for local infrastructure providers such as the utilities and others.
Once these players gain a bit more confidence we may finally see the start of consolidation in this market, and some medium-sized ISPs, in particular, may be involved in this process. As a result a whole new dynamic will emerge in the market.
Will Wi-Fi Max arrive, and what sort of impact will it have on CAN developments? Incumbents will have to move into new infrastructure developments in order to remain in charge.
In mature markets, mobile will begin to take a back seat – although the subscriber numbers will grow, revenue won’t, in any case not on these mature markets, and mobile data will continue to play a reasonably small role. However, this sector is highly sensitive to fashion and should provide plenty of opportunity for smaller players who can develop attractive applications.
To date, the incumbents have been very sluggish in this market, experiencing failure after failure (WAP, GPRS, MMS, 1X, etc). A totally new approach is needed to break the market open. This might actually come from Wi-Fi, where a meshed network is beginning to emerge. Soon we will move away from laptop-oriented services, and I anticipate the arrival of a range of new consumer electronic equipment that will be capable of utilising this network.
Permission-based marketing based on profile management is going to make deeper inroads, as companies need time to test these applications and prepare for the boom years, 2005-2008.
And what will be the impact of digital Pay TV, if any? Will companies such as News Limited (Direct TV, BSkyB and Foxtel) be able to disrupt the free-to-air industry and poach valuable advertising dollars into the e-advertising system that it will develop on its digital system?
But before we get to all of that we will have a nice break. I am really looking forward to winding down and enjoying the festive season. Many thanks for your continued business – it is very much appreciated.
I wish you and your loved ones a happy Christmas – and make sure that you hit the ground running in the New Year. Hope to see you on the 28th of January.
From all of us at BuddeComm
Happy New Year.
We have produced a set of 4 forecasting reports for 2004:
Global – Forecasts – Industry – Developments in 2004
Global – Forecasts – Market – Voice, Data, Broadband in 2004
Global – Forecasts – Industry – Predictions for 2004
Global – Forecasts – Industry – Strategic, Political, Regulatory Developments in 2004
For those of you in Australian there will be a Roundtable on 28th of January in Sydney where we will discuss these issues in more detail. Click here for more details.
We invite your comments: Please click here to commentTagged in: Asia, Australia, New Zealand & South Pacific, Global, North America