Sunday, September 24, 2006

The Hague Telecom Day (4)

The conference is (in)famous for its discussion on bandwidth. This subject dominates the annual discussion at the conference. And that is not surprising. Some years ago, the municipality of The Hague hired the consultancy group under the chairmanship of Mr Koos Andriessen, a former minister of Economic Affairs. This group provided Amsterdam, The Hague, Rotterdam and some more cities with the advice to start up a glass fibre network, either public or for municipal use only. In the meantime Amsterdam and The Hague have started their initiatives; other cities are hesitant due to EU rules; besides, private initiatives have started in Nuenen and Lisse and more private initiatives are undertaken.

Mr Konstatinos Apostolatos, managing director of Arthur D. Little stirred the discussion at the Den Haag Telecom Day. He posed the thesis that until 2011 capacity for no more than 50 Mbps for downloads and 8Mbps for uploads would be needed. Even HDTV should be no problem for the cable. Eurodocsis and VDSL should be sufficient for the coming decennium. When more capacity should be needed, cable companies could give priority to its own services.

Despite the fact that broadband already has a great penetration in the Dutch households, the market will grow with 6 to 8 per cent till 2011 and 6 per cent thereafter. But not the subscriptions will push the financial performance of the cable companies, but the extra services such as Video on Demand, interactive television, HDTV. Annually till 2010 the turn-over per client (arpu) will climb to 65 euro per month, which represents 3,1 per cent. In the extra services the cable companies will get competition from the telecom companies like KPN and Tele2-Versatel.

ADL recommends that regulators adopt the following four key migration paths towards Next Generation of Great Broadband:
- Stimulate Market-led transition to NGNs
- Limit State Aid for NGNs only to cases of clear market failure
- Stimulate NGN-Infrastructure competition going forward
- Broaden the EC’s approach to Market Definitions – “Think out of the box”

Mr Apostolatos got under fire as he quoted from a study, which ADL performed for Liberty Global, the parent company of the cable company UPC. As delegates could sms their opinion during the presentation, Mr Apostolatos was reminded of the famous last words of Ken Olson on mini computers and Bill Gates about the capacity of the PC. Of course KPN and companies like Eurofiber and Fastfiber proclaimed a different point of view. They are supported in this view by a market research movie of the provider Ilse. In this movie a father and mother of about 40 years old tell about their experience with Internet. Dad downloads through Limewire and Mam plays games on Zylom; they both send photographs and movies to family relatives, who have emigrated.

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Blog Posting Number: 518

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