Only 28% of U.K. Customers Able to Buy FTTH Broadband Do So

Ofcom’s latest research shows the continuing lag between broadband supply and demand. In other words, it is one thing to make FTTH or gigabit-per-second internet access available. It is something else to entice customers to buy such services.

Fiber-to-home facilities now are available to more than eight million U.K. homes, or 28 percent of dwelling units. 

Meanwhile, gigabit-capable broadband is available to 13.7 million homes, or 47 percent of total homes. But take-up of gigabit speed services is still low, with around seven percent of FTTH  customers buying gigabit services, says Ofcom. 

source: Ofcom 

Fully 96 percent  of U.K. premises have access to 30 Mbps broadband connections. About 69 percent of locations able to buy 30 Mbps actually buy it, says Ofcom. Also, Ofcom notes that “94 percent of U.K. premises have access to an MNO (mobile network operator) FWA (fixed wireless access) service.” 

Mobile operators claim average download speeds up to 100 Mbps to 200 Mbps on their 5G fixed wireless services, Ofcom says. 

Satellite services add more potential coverage. “For example, Konnect states that its satellite covers around 75 percent of the U.K. and offers commercial services on a 24/7 basis direct to consumers with download speeds between 30 Mbps and 100 Mbps, with upload speeds averaging 3 Mbps.”

New low earth orbit satellite services such as Starlink also are coming. “Starlink indicates that users can currently expect to see 100 Mpbs to 200 Mbps or greater download speeds and upload speeds of 10 Mbps to 20 Mbpss with latency of 20 milliseconds or lower in most locations,” says Ofcom. 

The point is that although we might think consumers would jump at the chance to buy either FTTH service or gigabit-per-second service, that is not the case. Only about 28 percent of households able to buy FTTH service do so, while just seven percent of households able to buy gigabit service do so. 

To a large extent, internet service providers are investing ahead of demand, rather than following consumer demand. That is one key reason why customer experience did not fall off a cliff when pandemic-related shutdowns happened. ISPs already had created excess supply. 

That is likely to be the trend virtually forever.

Deutsche Telekom Speeds FTTH, Cable Already Supplies Gigabit Per Second Service to Half of German Households.

If Germany has about 40 million households, then Deutsche Telekom’s goal of connecting 10 million homes with fiber-to-home facilities by 2025 suggests coverage of about 25 percent of German homes with FTTH. 

source: IDATE   

Of course, physical media is one thing; bandwidth another. Vodafone's hybrid fiber coax network already covers at least 22 million German households with gigabit-per-second speeds, meaning more than half of German households can buy gigabit service. Cable gigabit households should reach 25 million homes soon.  

source: Viavi

What Exactly is Web3?

Juan Benet, Founder & CEO of Protocol Labs, talks about Web3.

Do Network Effects Still Drive Connectivity Business Moats?

Theodore Vail and Bob Metcalfe are among the entrepreneurs whose thinking has implicitly or explicitly relied on the notion of network effect, the increase in value or utility that happens when more people use a product or service. 

source: Medium 

James Currier and NfX argue there are some clear different types of network effect, which they argue drive 70 percent of the value of technology companies. That is reason enough to understand the principle. 

Essentially, network effects create business moats; barriers to entry by rivals. But some may argue that “network effects” are overrated sources of advantage. 

Are network effects explainable some other way? Can “economies of scale” explain advantage? Are the supposed advantages of network effects explainable by something else?

Perhaps “platform” is a way of explaining the success of a business model otherwise considered to be anchored in network effects. “Even among the companies that have come to define the sector--Facebook, Amazon, Apple, Netflix and Google--only Facebook’s franchise was primarily built on network effects,” some argue. 

Might  “viral” status, “branding,” “switching costs,” critical mass or other advantages explain defensive moats? It might not be so clear.  

When the network itself--the number of people one can reach on a particular communications network, for example--drives value, that is an example of network effect, somewhat clearly.

As an example of a business moat, Theodore Vail, the chairman of AT&T, said in 1908 that “no one has use for two telephone connections if he can reach all with whom he desires connection through one. 

In the connectivity business in the internet era, one might actually question the network effect to a large extent, since, by definition, every customer or user can reach any other lawful user without regard to the particular details of access network supply. 

As important as network effect might have been for monopolist AT&T, it is unclear whether such advantage still is possible in the internet era. Scale arguably continues to matter. But network effects? Unclear. 

Is There Really an Enterprise "Middle Mile?"

Terminology changes in the connectivity business, over time. Consider the term “middle mile,” which has come into use over the past decade. The term refers to the part of the network segment between the core network backbone (the wide area network) and the local access network. 

Think of this as what we used to refer to as the trunking network, or perhaps the distribution network. If the core network terminates at a class 4 switch or a colocation facility, then the “middle mile” is the transport network connecting the colo to the local access network (a central office or headent, for example).

 

Some illustrations tend to distort the network architecture, even when subject matter experts correctly understand the concept. In this illustration, which shows the way an enterprise user might see matters, the entire WAN is considered “middle mile,” not simply the connections between a colo site and the WAN. 

source: Telegeography

That is understandable if we conceive of the network the way an enterprise might: that “everything not part of my own network” (“my local area network”) is “in the cloud,” an abstraction. 

Even viewed that way, the middle mile is an abstraction. It is part of the network “cloud,” in the sense network architects have depicted it: all the network that is not owned by the enterprise. 

The point is that there is a difference between network terms such as “middle mile” as a description of network facilities and the use of the term (perhaps even incorrectly) as a matter of networking architecture. 

“WAN transport” is not “middle mile,” in terms of network function. But everything other than the enterprise LAN is “cloud” or “not owned by me” in terms of data architecture. But in that sense the term middle mile is unnecessary.

 

How Do Network Effects Underpin Business Models?

How Big a Problem are "As Built" Maps?

If you know anything about outside plant operations, you know that lots of maps--especially “as built” maps--are not fully and accurately updated. They should be, but they perhaps are not. That can result in discrepancies between the way a service provider believes specific network locations are configured, and the way they actually exist. 

That is not to say malfeasance is never possible, but it is much more likely that maps are incorrect simply because, over time, not all the changes are reflected in official maps. To use a simple mobile analogy, coverage maps indicating data speeds will show one set of numbers in the winter, and a different set in the summer, where there are lots of deciduous trees. 

It also is possible fixed network data speeds will show one set of numbers at the hottest point of the summer and the coldest part of winter, or even different performance based on thermal effects across a day or a week.

Temperature affects both processor and cable performance, for example. 

Measurements for parts of the network that are newer might diverge from parts of the network that are older, even in the same neighborhoods. 

The point is that there are lots of reasons why end user data speeds are not as the maps suggest they should be operating.