So lets wind the clock forward a few years to when we have access technologies that can deliver higher speeds >50Mbps symmetrical to 75% of NZ homes what do we do with them?
Let's start by assuming that to use the FTTH (Fibre To The Home) network we will need to invest in some level of upgraded home wiring and new termination device – say to the tune of 1000$ (some estimate 2000$ as more likely).
Assume that FTTH is the same price as copper (best case for FTTH adoption) – as consumers we will still need some new value to justify our investment in time and money to change – just doing what we do today (email, Facebook, twitter, TVNZ online etc) but faster is unlikely to deliver significant customers for the FTTH networks. As justification for this statement we can reference the Commerce Commission annual Telecommunications report for 2009 - which states that less than 20% of customers chose the higher speed DSL plans over a quarter chose the lowest speed plan (256K up 128k down) and still >20% on dial up.
What will drive the adoption of the infrastructure and deliver the new value?
The FTTH council in the USA have invested in a study into the applications that could be the ones which take off and its an excellent analysis. (Read the full study here.)
This study starts from the premise that there are specific capabilities of Fibre that are hard to replicate with copper and therefore services leveraging these will be the unique enablers.
Simply put fibre to the home delivers symmetrical bandwidth at scalable speeds from 25 Mbps to 1Gbps, also due to fibres bandwidth capabilities the need for contention is severely reduced or removed and therefore impacts of latency and jitter are negligible. Enabling real time services.
The FTTH Council report highlights the following building five block application sets:
- Advanced HD Video
- 3D/HD Video
- Advanced 3D/HD Video
- Massive Upload and Download (>10 GB)
- Cloud Computing – i.e. diskless and cloud based OS
The study then builds 19 applications from these technologies and studies the impacts of these applications on GDP.
What’s clear is that there is much to do in this space, and its unlikely to come from the global players like Google or Facebook – neither is it likely to come from the startups trying to be the next Facebook. Remember that NZ will be way ahead of the rest of the world with FTTH – so most newcomers and the existing giants will all still be building for the access technologies that their markets have.
Therefore a lot of the applications that will deliver new differentiated value over FTTH in NZ will need to be built here – not a bad thing and may help to spur NZ web entrepreneurship to a new level.