Telcos keep investing in improving their broadband networks: from ASDL to ASDL2+ to VDSL and now Fiber-to-the-home (FTTH). FTTH will enable bandwidths in the order of 100 Mbps, both for downlink and uplink.
Telcos are investing important sums to bring fiber to the users: Verizon, SBC and BellSouth plan multi-billion dollars investments in the next three years. NTT has reached 9 million subscribers in Japan for FTTH and target 30 million in 2010.
How will Telcos get a return on this massive investment? What applications can they deliver to justify it?
1) IPTV. This is the obvious answer. High Definition video will be the killer app, not only for video-on-demand but also for broadcast TV channels and live events. To deliver a HD channel requires around 10-15Mbps. With the trend of multiple set-top-boxes per family (in the living-room, in each of the bedrooms, in the kitchen), FTTH will enable multiple HD streams to reach each STB in the home with a different program. 3D HDTV is still in early stage, but will also provide a compelling reason for users to demand fiber.
2) Interactive TV applications. Benefit from the high-bandwidth return channel to provide interactive TV applications on top of IPTV, like TV portals or participation TV (voting, messaging or video calls). Interactive Advertisement is one of the most promising applications for generating revenues. Targeted, relevant adds can be a reality on the TV, as the telco can have a detailed profile for their users, even measuring the response to campaigns. Interactive Advertisement will enable users to respond to the ads, e.g. by providing an email address, subscribing to the BMW channel, purchasing the product from the TV ad, setting up a video call to a sales agent or simply recommending the ad to a friend. The possibilities are end-less, and the potential to generate additional revenues huge.
3) High-Def Videoconferencing and evolution to 3D HD conferencing. Once multi-parties calls are set-up, the demand for bandwidth multiplies
4) Wholeselling to Internet players, like Google, Yahoo or Microsoft. High bandwidth/QoS demanding applications could be sold by Internet players, including the bandwidth required to deliver the application, purchased from the operator as a wholeseller. e.g. Google Earth Premium providing not only satellite pictures but also high quality live video, Rhapsody music service evolving to subscription-based video and music service through a QoS-aware sub-network ”wholesold” by the telco, Premium YouTube HD with connectivity sold by YouTube, etc.
Having a FTTH network can provide Telcos an important competitive advantage and the means to provide new applications we can not even imagine now. Telcos need to keep focus on developing these applications.
Another alternative, not to be neglected, is to ask for government funding, given the social benefits Internet clearly provides. Renamed in the past as the Information Highway, there is no reason we should not have toll-free Information highways too. It worked in Korea and other Asian countries. It is a matter of understanding Internet as another public infrastructure.
See what Samsung envisions as the Ultra-High Definition (UD) 3D. At 4096 x 2160 resolution it will require 300 Mbps of bandwidth. Not even current FTTH will be enough.