7 things I learned in Lisbon

Having just returned from the FTTH Conference in Lisbon, I thought I’d jot down my thoughts while they’re still fresh in my mind.

This year’s event was held in Portugal’s premier conference centre, the Feira Internacional de Lisboa – the best conference centre in the world according to my taxi driver, who provided the scary moment of the trip by reversing onto a roundabout to get me there (he would no doubt blame my poor Portuguese pronunciation which I tried to supplement with pointing).

The conference itself was the polished production that you will have come to expect if you’ve ever been to an FTTH Council Europe event before: impeccable organisation, slick audio visuals on huge screens, and a cleverly organised layout that minimized walking and made it possible to forget that we were in an aircraft hanger of a venue. The food and Wi-Fi were also free of charge – these items are a sure-fire way to a journalist’s heart (not that I needed winning over).

I spent most of my time in the content and services stream. The conference theme “taking your life to new horizons” reflects the Council’s new emphasis on services and applications, and I wanted to get an insight into the content provider’s perspective. Here’s what I learned:

1. The number of fibre users throughout the world is reaching critical mass, and it’s about time that service providers realised what an opportunity they have to create new applications tailored to this market. There are 25 million fibre subscribers in the Asia Pacific region, nearly 7 million in North America, and 3.5 million in Europe including Russia. Google is one of the few companies to understand the potential of this almost untapped market, and will be using its experimental FTTH network to try to work out how to monetize this consumer group, says Yankee Group analyst Benoit Felten. This will create what he calls a “virtuous circle” – the emergence of new services will help stimulate demand, leading to more subscribers… I’m sure you get the idea.
2. The true rewards of broadband won’t be attained until coverage goes national, according to Taylor Reynolds, an analyst with the OECD. And he illustrated his point with a rather telling example from France. As part of its disaster recovery plan for an H1N1 pandemic, the French government had put together 620 hours of video covering nine subject areas that could be broadcast via TV channels over a period of 90 days. Reynolds was surprised to find out that the programming would not be made available over the internet – which is odd because the internet is the most sophisticated delivery mechanism available. With internet delivery, lessons could be distributed via the highly efficient peer-to-peer file-sharing protocol, and students could get instruction direct from their teacher using a video link. But this wasn’t being done because not all students have access to broadband. Reynolds went on to discuss a recent OECD study that had looked at how much cost saving from “spillover effects” would be needed to justify investment in a national broadband network. The amount required is not huge in the context of national spending – cost savings of just 1.0-1.5% would be needed in the sectors of health, education, electricity and transport. Governments should take these spillover effects into consideration in their budget and strategy because, by definition, these are benefits that the FTTH provider does not get paid for.
3. Healthcare is the world’s largest service industry, and it is looking towards ICT to help it solve massive challenges: an aging population, ongoing shortages of healthcare personnel, and an increase in the prevalence of chronic diseases. Before he was invited to the conference, Ton van den Hoven, senior director of healthcare informatics at Philips Healthcare, had never heard of the FTTH Council Europe or its work, and yet one of the key challenges for the adoption of e-health is infrastructure. (The other challenge is standardisation – so that exchange of patient records and healthcare data can take place regardless of the technical solution.) Philips Medical is very interested in getting good connectivity to patient homes for “compliance monitoring” – keeping an eye on the patient to make sure they are following the treatment regime. Apparently this is big reason that treatments fail. “Home healthcare needs to be integrated into the overall health care cycle,” said van den Hoven. At least now we can say the conversation between these two important industry verticals – telecoms and healthcare – has begun.
4. Digital broadcasters are struggling with bandwidth issues on legacy networks. Today they face a stark choice: offer more channels at low quality, or go for high quality transmission, but be limited in the number of channels they can offer. That kind of trade-off doesn’t make sense for a business that’s competing with cable TV and its hundreds of channels. IPTV providers at the show had the same message: the last mile is the bottleneck for delivery to the consumer, and we want you to help us. The transition from broadcast to on-demand models of content delivery is also causing a certain amount of pain. Remember all the brou-ha-ha with telecoms networks wanting the BBC to pay for iPlayer content delivery in the UK? The same problem will crop up in other countries. Right now RTL’s catch-up TV service in the Netherlands represents only 4% of viewing time; imagine how much bandwidth will be needed to bring that fraction up to 10 or even 20%.
5. As the above examples show, the FTTH ecosystem is really complex, and will involve new relationships and different business models. Benoit Felten (again!) presented the results of a study commissioned by the FTTH Council Europe on the so-called FTTH Benefit Compendium. One of the key results is a graphic showing the ecosystem as a kind of segmented onion. This takes the simple, four-layer model of the FTTH world – passive, active, services, end-user – to a whole new level. Benoit only had 15 minutes to explain the key points of his research, so I’m planning to interview him as soon as time allows so I can understand the bigger picture.
6. Overall, the FTTH world has made steady progress, but for an audience keen for revolution and disruptive innovation, that wasn’t enough. The number of fibre subscribers grew at about the same clip this year as it did last – about 20% – and as FTTH operators get up to speed on their marketing and messaging that growth should continue and even accelerate. Today just about every country in Europe has a digital strategy that recognises the importance of broadband to the national economy. FTTH equipment is getting faster and cheaper, operators and vendors are getting clever with deployment techniques, and services and applications are becoming an important part of the equation. But there is no silver bullet – at least not yet.
7. [off topic] It is warmer outdoors in Lisbon in February than it is in my house. The boiler repair man dropped by last week and applied a “Birmingham screwdriver” (gave boiler a thwack), but to no avail. Been a week without central heating now…

What did you learn in Lisbon? Share your experience using the message boards below.

Disclosure: I do project work and copywriting for the FTTH Council Europe, who paid me to be in Lisbon to report on the event.