Darn that internet!

James Enck
February
- 1 - 2007
 Who am I and why am I here?

• European Telecom
Analyst/Global Telecom
Strategist (whatever that is).
• Author of EuroTelcoblog
and Chaotica blogs.
• My avatar is considerably
thinner than me…

-2-
We’re not in Kansas
anymore…
-3-
No longer “your father’s” internet

-4-
The geeks have been hard at work

-5-
How broad does broadband have to be?

What we want/need

What we have
-6-
Do you buy the “slowly, slowly” story?
2006 study from Arthur D. Little came to the following
conclusions about European broadband in 2011:
? “Not more than 10% of broadband households are
expected to exceed 30Mbps” (downstream);
? Upload speed of 8Mbps will be sufficient;
? “FTTH will mostly be relevant at a local/regional
level, assuming it is able to offer more than superior
bandwidth.”

UK satellite giant and broadband newcomer BSkyB said in

late 2006 that it assumes average bandwidth consumption
doubles every five years.
-7-
Does this match the observable world?
Australian broadband customers and downstream bandwidth consumption

3,000 25,000

2,500 20,000

2,000 Residential subs ('000, LHS)

Data downloaded (TB, RHS) 15,000
1,500
10,000
1,000

5,000
500

0 0
Sep-03 Mar-04 Sep-04 Mar-05 Jun-06
Source: Australian Statistics Bureau

-8-
Not everybody is drinking the Kool-Aid
"There's an absolute risk of people
dropping basic video service for
Internet video."
"Bandwidth consumption is
definitely increasing, and the
average consumption rate is
definitely increasing. It's definitely
a real problem; there's definitely a
storm coming."
- regional cable operator

"Prepare your networks for the

primetime on-demand wave."
- Motorola executive

-9-
 Ouch, my creaking pipes!

Source: PlusNet
- 10 -
 “Evil” BitTorrent
Weekly and normalized monthly download figures, top ten global video titles
70,000,000

60,000,000

50,000,000

40,000,000
Weekly total
M onthly run rate
30,000,000

20,000,000

10,000,000

0
D 05

Se 06
Se 05
M 05

O 05

M 06

06
Ja 4

Ja 5
Fe 05

Fe 6
A 05

A 06
N 05
Ju 5

Ju 6
A 5

A 06
M -05

M -06
Ju 5

Ju 6
-0

-0
0
0

0
l-0
-0

-0
-

-
b-

p-

b-

p-
n-

n-
-

-
ct-
n-

n-
l-
ug

ov

ug
ec

ec
ar

ar
pr

pr
ay

ay
D

Source: Daiwa, from p2pnet.net and BigChampagne data

- 11 -
Nice, cuddly BitTorrent

- 12 -
BitTorrent on HD steroids

- 13 -
Even Auntie likes P2P

- 14 -
A bundle of pain?

- 15 -
Don’t look now

- 16 -
Changing allegiances

- 17 -
Massive online storage and virtualization

- 18 -
Massive local storage, place-shifted

- 19 -
Your viral badge of choice

- 20 -
 Persistent virtual worlds: It’s no game

slfuturesalon.blogs.com

Business Week

- 21 -
The quick, and the dead

- 22 -
When the internet just doesn’t hack it

- 23 -
 Conclusions
The most disruptive force in telecom is your customers
and their ability to spread applications virally and
unpredictably.

The industry has consistently under-forecasted market scale (mobile

penetration, broadband penetration) and not foreseen the rise of
potent new applications (SMS, email, Skype, video on the net).

It’s time now to consider the implications of once again

underestimating and underprovisioning...

…and the potential rewards of getting it right.

- 24 -
Thanks for listening!

- 25 -