For cable, do tablets & smartphones represent a threat or opportunity?
Both. These new devices really have the potential to transform the cable industry. Firstly, consumers just do different things. They spend their money and time browsing apps stores, rather than watching old school TV offerings. Secondly, tablets and smart phones offer a point of entry for new over-the-top players who get an easy and direct access to end consumers, billing relationship included. Thirdly, the traditional, mostly ad-funded TV business model is under immense pressure. And finally, a lot of interactive services like VoD get delivered via IP to IP devices rather than via coax cables to TV sets and set-top boxes.
But iPads will not kill the video star. There is a brave new world of opportunities out there for cable. Cable can reach beyond the set-top box, and deliver video to multiple devices. As consumers do not want to make any more appointments with their TV sets, but decide when and where to consume If you go from the traditional… cable put the control into the hands of the consumer. The lean-back TV experience is already evolving into “any device, anytime, anywhere” delivery, and tablets and smartphones will enable content discovery and new advanced services. Cable with its massive bandwidth advantages over DSL can thus become the gatekeeper of the digital home.
Most importantly, cable can enable tablets and smartphones by becoming a player in mobile and nomadic connectivity. The advances in WiFi technology and other small cell technologies open new ways to deliver nomadic access for tablets and smartphones. We estimate that in Western Europe alone, there is an opportunity of more than € 10 billon up for grabs … the question is who will capture it. Cable? Or other players?
Are current levels of growth in data consumption sustainable?
Most of the new devices will use mobile networks to connect to the internet. Especially the consumption of high quality “anywhere, anytime, any device” video will drive the demand for bandwidth. For example, a tablet consumes more than 120 times the data traffic of a basic mobile phone! The availability of an ubiquitous broadband infrastructure for nomadic and mobile access may therefore become a major bottleneck.
Fortunately, mobile broadband is fairly predictable and Cisco has done this now for over five years, with its highly regarded Visual Networking Index (VNI). The latest release of VNI has become available a few weeks ago, and it confirms how immensely mobile data traffic will develop. In Western Europe, mobile data traffic will grow 14-fold from 2011 to 2016, an annual growth rate of 68%. We expect mobile data traffic to be 11% of total Western European IP traffic in 2016.
What other priorities do you think should cable be addressing in 2012?
If you compare cable to other communications and entertainment service providers, we see clear strengths and weaknesses. Cable “owns” a number of control points that other providers envy. Be it cable’s grip on the consumer’s home, the clear association with the consumer experience on the TV, the fixed broadband access with superior bandwidth capabilities, or the undoubted competence in delivering entertainment content.
I see three major “construction sites” for Cable to work on in 2012:
- An extension of connectivity from fixed to mobile and nomadic, as discussed before
- An extension from the consumer’s home into the business space – as boundaries between “business” and “residential” users get more and more blurry. Trends like BYOD (bring your own device) for enterprises are a witness of this.
- An extension from the current TV-centered experience into a multi-screen setting
What will it take to be a winner in the multi-platform world?
A whole new ecosystem will be needed to support the “multi platform world”. Broadcasters, content providers, consumer electronics manufacturers, cable operators, mobile network providers, and app developers need to play together. They come from very, very different backgrounds. New rules will glue them together, and decide how the multi-platform value gets created and distributed.
The question is how cable operators can shape these rules for their own benefit. In my view, I see a clear differentiator for cable: being in control of one of the most important elements of the ecosystem, the network. But the current cable network will not suffice to fully play this strength. Cable operators should make their networks ready to support nomadic access to services.
Personally, what has been the most exciting technology you’ve experienced in the past two years?
Undoubtedly, the advent of smartphones and tablets into my life. I now own five of them. The creativity of apps developers is just inspiring, and they have turned these devices into a true Swiss Army knife that shapes my personal and business life.