Exploding Bandwidth Demand
By Dr Joe Parker
Last year in Japan, the number of broadband subscribers increased 19.9% to 22.3M, a level almost half of that in the US (source: Japan’s Ministry of Public Management Home Affairs Posts and Telecommunications). This by itself is not a dramatic increase. In fact, the number of broadband subscribers in the US increased by 32%. What is dramatic is the composition of the Japanese increase. 60% of the increase was due to FTTH (Fiber To The Home) subscribers.
There are now 4.6 million FTTH subscribers in Japan, a number growing at a 90% annual rate. More than four million homes in the U.S. have been passed with fiber, resulting in a 50 percent increase in the past six months. In the US more than 670,000 homes have been connected, a 107 percent increase since October 2005. Other countries are following suit.
Worldwide we are seeing the definition of “broadband” changing. We are entering a world of 2 - 4 Mb/s to your cell phone, 3 – 6 Mb/s DSL (AT&T) and 20 Mb/s FTTH connections. Even these data rates don’t seem to be fast enough. At least one major carrier, Japan’s KDDI, is trying to extend that to 100 Mb/s per user. This push for speed combined with the continued increase in the number of broadband subscribers represents an explosion in the availability of bandwidth at the edge of the Internet.
What is going to fill these new high speed pipes? These are not the “build it and they will come” nor the “money is free, so why not” times of yesteryear. After all, it is a major carrier pushing to 100Mb/sec, not some wild-eyed startup. The service providers building this new infrastructure are doing it for good economic reasons. They have revenue generating plans.
The short answer is video. The longer answer is video everything. The detailed answer includes: IPTV, ITV, VOD, movie downloads, streaming video advertising, home video monitoring, video mail, video chat and who knows how many other new services. The significance of these new services is that service providers view most of these as valuable new revenue sources. IPTV alone is expected to have 53.7M subscribers by 2009 generating $44B in revenue (In-Stat).
Everyone is getting involved. Warner Bros., Universal Pictures, Sony Pictures, Paramount Pictures, Twentieth Century Fox and MGM will offer some first-run and older titles for downloads on Movielink. Sony and Lions Gate will sell films through the CinemaNow site. ABC is now offering some of its most popular television shows free as streaming videos (with commercials). Not to be outdone, just last Thursday CBS Corp. unveiled “innertube” a new ad-supported online entertainment channel that promises new web-only content.
New web-oriented video companies are getting into the action too. YouTube, a web-based consumer media company for people to watch and share original videos, garnered 12.9 million unique visitors in March and is streaming 40 million videos and 200 terabytes per day according to Forbes.
We are entering a good “vicious cycle”, one in which the rapid increase in high speed connections is fostering new revenue producing services which in turn encourage service providers to offer even higher speed connections.
