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.