TORONTO – With the broadband market still growing briskly and shifting drastically in the direction of data and video applications, telecom service providers and equipment suppliers are scrambling desperately to keep up with the changes and find more spectrum to use.
That was the consensus that emerged from a panel discussion at the Canadian Telecom Summit earlier this week. Panelists addressed how the broadband market is changing and how they are aiming to meet its swiftly changing needs, particularly on the wireless side.
“We’re all in a race to catch up with consumer demand,” said Dean Brenner, vice-president of government affairs for Qualcomm. “It has created an arms race among equipment manufacturers.”
Dave Caputo, president and CEO of Sandvine, presented his company’s latest data on wired and mobile broadband trends globally. He said real-time entertainment now accounts for nearly half of all Internet traffic over fixed-access networks in North America, up from almost 30% two years earlier, with Netflix generating the lion’s share of that. In fact, he said, Netflix passed BitTorrent as the largest generator of North American Web traffic for the first time in the spring report, accounting for a staggering 22.2% of total traffic.
In Canada, Caputo said, Netflix already accounted for 13.5% of all Web traffic over fixed-access networks in March, just four months after the Internet video service launched here late last year. Despite Netflix’s relatively “inferior selections” compared to “the great content that’s available from Rogers and Bell,” he said, “people are increasingly paying for over-the-top (OTT) video.”
Similarly, Caputo said European consumers are showing steadily growing interest in real-time entertainment, albeit not as much as their North American counterparts. In Sandvine’s March report, real-time entertainment generated 33.3% of all bytes during the peak period, up from 30.4% of aggregate bytes in 2009.
With the demand for wireless broadband bandwidth climbing particularly steeply, panelists said more mobile spectrum is absolutely crucial for the industry to move forward.
“There’s no dispute it’s needed for Canadian carriers and around the world,” Brenner said. He took heart from new Industry Minister Christian Paradis’ comments earlier in the conference that government officials are exploring the idea of repurposing other frequencies beyond the 700 MHz and 2500 MHz bands. He also suggested the 1.4 GHz L band as a less pricey alternative to the 700 and 2500 frequencies.
Dawn Hunt, vice-president of regulatory for Rogers Communications, indicated that Rogers executives are anxiously waiting to see how and when the Canadian government proceeds with its planned spectrum sales of the 700 MHz, 2500 MHz and possible other bands. “We need to see what’s available and what will be considered for auction,” she said, noting that the company makes its plans 10 years out. “We have some catching up to do… We have to do a better job.”
Brenner agreed. “Decisions need to be made ASAP,” he said. “Two years ago, Canadian carriers were ahead of the U.S. Now they’re falling behind.”
Allison Lenehan, chief strategy officer of Xplornet Communications, said more spectrum is needed even in sparsely populated parts of Canada. Even though his company plans to blanket its entire target area with two new satellites and a new microwave network by the end of next year, he said the “the bar keeps getting raised” because of escalating customer demand for more bandwidth and applications. “So we need bigger pipes,” he said.
With wireless data use growing by leaps and bounds but producing relatively low revenues, the panelists debated how best to monetize mobile data use. Noting that his firm has helped its clients roll out usage-based data tiers with “great success,” Caputo recommended that providers create consistent, predictable customer bills.
“The killer app for mobile data is cost certainty,” he said. “People want to know what their bill will be at the end of the month. They don’t want to be surprised by what their bill will be.”
Alan Breznick is a Toronto-based senior analyst at Heavy Reading, part of the Light Reading Communications Network at UBM TechWeb. He covered the 2011 CTS for Cartt.ca.
