Deutsche Telekom and Vodafone Risk Missing the Point as They Start Fibre Roll-outs

I. Grant

Summary Bullets:

• Deutsche Telekom and Vodafone both target business parks with fibre roll-outs

• Customer expectations and experience are missing from their agendas

Probably the last thing Deutsche Telekom needed last month was Vodafone announcing a EUR2 billion fibre network rollout targeting 100,000 companies in 2,000 business parks across Germany. The former incumbent had already responded, somewhat grumpily, to criticism that it is doing too little too late, with a ten-fact list setting out its broadband policy and strategy, which dovetails with the German government’s ambition of national availability of 50Mbps broadband access by 2020, and 100Mbps by 2025.
Vodafone’s headline-grabbing announcement demanded a response, which came yesterday. In addition to the 450,000km of fibre already in the ground, Telekom will dig in another 300kms of fibre to pass around 5,000 firms in 14 municipalities with speeds from 100Mbps asymmetric to 1Gbps symmetric. This is partial fulfilment of an earlier promise to fibre up around 100 industrial estates throughout the country.

Telekom has yet to deviate from its policy of running fibre to the cabinet (FTTC), and using vectoring to increase the speed on the remaining copper links. Vodafone, on the other hand, plans to run fibre to the basement (FTTB), theoretically making available terabytes per second to the building’s inhabitants.

But all this seems to be missing the point, the point being the customer’s experience of being connected. What good is having a gig pipe if the modem on the PC or handset doesn’t support it, or it drains the battery in minutes?

In the customer’s world, context defines solutions. “Good enough at the price” is the benchmark they use. Telekom’s vectoring decision, colored no doubt by declining voice revenues which are not being replaced by data charges, is in line with this thinking. But it makes the arguments over infrastructural knick-knacks like FTTC, FTTB and even 5G largely irrelevant to users. The question is whether it is fit for purpose at that price.

While end users have “consumerized” corporate IT, enterprises will largely control the deployment and use of IoT devices, and hence the take up of infrastructural services. Unhappy with the security arrangements on public networks for IoT deployment at scale and at risk impact, they are looking for privacy – closed groups of trusted users, private networks, discretionary anonymity but full functionality in public, and the like. To be fair, the telecommunications industry has a full toolkit it can deploy to address these issues, but no one knows yet how the networks and backend systems will cope with hundreds of millions of devices, let alone billions.

So while Telekom and Vodafone fight amongst themselves for headlines, they might also give thought to what happens at the edge of their networks, where things are getting really complicated due to the proliferation of devices and access methods.

Nokia’s announcement of Intelligent Access is a step in the right direction. This allows operators to aggregate fibre, DSL, cable and fixed wireless access, to deliver meshed gigabit Wi-Fi to every device indoors, and uses virtualization to enable use-case based software-defined networking. Because speed is, in the end, a poor proxy for user experience, this could provide breathing space for operators to really address the experiential issues associated with connecting tens of billions of users, aka IoT devices, in the probabilistic, best-efforts networks they are building.

What do you think?

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