Feature Article

October 13, 2014

The Seven Most Interesting Data Points from BroadbandVision

The BroadbandVision conference in Las Vegas earlier this month, gave broadband providers, big and small, the opportunity to exchange ideas and experiences with one another.

I’ve always been a numbers-oriented journalist, and I think a lot of readers appreciate real world facts and figures, so I thought I would share the seven most interesting data points I learned at the conference:

  1. What’s a gigabit? Gigabit networks are a hot topic within the telecom industry, but research conducted by telecom consulting firm Pivot Group unveiled at the show that only slightly more than half (55 percent) of people surveyed knew that a gigabit was larger than a megabit. Clearly the industry has some educational work to do there.
  2. Gigabit skeptics. Despite the hype, some of the events participants were skeptical about the demand for gigabit service. Steve Cochran, president and CEO of WOW! Internet Cable and Phone, noted, for example, that his company’s highest speed tier is 50 Mbps and only 2.5 percent of customers subscribe to that service.
  3. The REIT opportunity is positively viewed by Wall Street. Windstream Communications made headlines recently when it announced plans to spin out its copper and fiber assets into a separate real investment trust with the goal of gaining capital for network investment – and the concept has resonated well on Wall Street, where virtually all telecom service provider stocks went up the day of the announcement. According to Windstream CEO Jeff Gardner, who participated in a question-and-answer session, $12.9 billion in market equity was created as a result of Windstream’s announcement. The REIT also anticipates buying copper and fiber assets from other service providers, Gardner noted.
  4. The smartphone is good for GDP. The smartphone has given a boost to various parts of the economy, noted Chetan Sharma, president of Chetan Sharma Consulting. Sharma estimates the lifetime economic value of a smartphone at $2,596.
  5. Don’t overlook the Wi-Fi opportunity. Less than half of broadband users (48 percent) say their Wi-Fi wireless router “works great,” leaving open a potential opportunity for service providers that can improve on that experience, noted Dave Nieuwstraten, president of Pivot Group. Service providers, he said, “should pay more attention to marketing and the router – one of the hot buttons may not be speed.”
  6. Whither the content oligopoly? The “Big Seven” content providers control 85 percent of video service providers’ content costs, noted Rich Finkle, president and CEO of the National Cable Television Cooperative, which negotiates contracts with those companies on behalf of smaller video providers. And even though viewership of traditional cable content declined 16 percent in one year, the content companies continue to seek high price increases. Clearly this may not be sustainable long term. Accordingly, Finkle believes the content companies eventually “will seek other ways to reach consumers” and will “look for direct-to-consumer opportunities.”
  7. Broadband wireless operator sheds light on data caps. JAB Wireless has an interesting business model. The company has been acquiring broadband wireless service providers nationwide. These businesses have relatively low startup costs and have been quite successful, observed JAB Wireless Co-Founder and Chief Development Officer Jeff Kohler. Any talk about broadband wireless inevitably leads to a discussion of data caps, but according to Kohler, they’re no big deal. JAB sets its data cap at 250 gigabytes per month and only 1 percent of customers exceed that limit, he said. The average customer uses just 45 gigabytes per month.

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