Year in Review: 2004
Another year has passed as we look back at how 2004 has changed broadband and what we're expecting from the next twelve months. We think most will agree that the last year has been a good year for broadband, although there is still a lot of work that needs doing to extend coverage, and the ever-increasing pressure for more bandwidth.
In our review of 2003, we suggested BT would be launching a Home2000 service in Q4/2004 or early 2005 and we're pleased BT has started trialling this service in November and hope that it will move to a full service in the near future. This raises an interesting question as to what BT will do next in terms of speeds. The increasing pressure from cable companies, LLU operators such as Easynet, Bulldog and others entering the market is going to force BT into offering higher bandwidth services which we expect to be trialling in the second half of the year, possibly even launching before the end of 2005. Telewest has already been pushing the boundaries with broadband speed trying to catch up on the missed opportunity the cable companies had to dominate the market when BT was slow to start up on rolling out of ADSL just before the millennium.
BT's scrapping of the trigger level system is evidence of this fundamental change in style as the forces of competition take effect. Broadband coverage is now at 95% of homes and businesses (source: BT) and BT has stated it wants to achieve 100 percent coverage in 2005 expecting to reach 99.4% by the summer, although some of this may be achieved using technologies other than ADSL. If you'd like to help with some research on attitudes to broadband and other technologies, fill out a survey we're carrying out.
A year ago we asked whether VoIP would be the "killer application" that would push up use of broadband, and we've seen increasing number of VoIP services from a number of providers launched this year, although they lack structure at the moment, probably until a big player brings it to the level at which the market understands it. BT would be able to do this, but its focus has been on making it "another phone line" and it's not seen as a "VoIP" service as such so the benefits aren't there. Video calling will probably be this trigger when the 3G mobile networks realise the potential of linking Internet telephony with mobile phones. This should worry traditional telcos if they have not already prepared a strategy on how to deal with the emerging markets. Certainly, BT's 21CN network vision indicates it has not been ignored, and NTL has expressed its own VoIP ambitions, all of which raises interesting regulatory questions for Ofcom. The next year will be an important one in the battle for the wholesale market.
Many of the changes and increasing product availabilities are allowing a lot of smaller operators to enter the market offering broadband and telecoms services. Often smaller companies rely on the goodwill of their customers to spread the word, as they don't have huge advertising budgets and a well known "trustable" brand. Sometimes, smaller companies can get ahead in the market by offering low prices. The worrying sign is that some of the new broadband operators do not have the experience required in managing this growth and this has lead to some calling for increasing regulation of Internet companies, a move we are not sure is necessarily beneficial. The Internet has been the linchpin that has allowed smaller businesses to gain a wider audience, working against the pressures of globalisation which often favour larger companies. Heavy regulation of smaller companies would increase the fixed costs and discourage innovation and customised services which the Internet has enabled. The solution to the problems raised is user awareness and education on due diligence everyone should carry out on a potential supplier.
A notable shift has started with a move from "unlimited" or "unmetered" services back to limited, contended or metered access fuelled by a small minority of users view that they are buying an uncontended service and treating it as such by using it to its full technical capacity around the clock. It has always been inevitable that the pressure on bandwidth would come down at some point as there was no incentive for users to curtail their usage whilst providers' costs in maintaining networks and transit bills kept rising. Although unpopular (mainly due to the way in which metered services have been charged in the past), this will be a key enabler to launching faster services. With the cost difference in the "size of the connection" between 500Kbps and 2Mbps getting ever smaller (to zero in the case of DataStream), this means increasingly users will have more bandwidth on demand. There is no reason this model shouldn't result in 10Mbps+ services being launched in the next few years. If we were the developers of new apartment buildings that keep going up in London and other cities, we would pre-wire the building for networking and consider how to deliver 100Mbps or gigabit broadband to the building which is not in any way unfeasible with such an infrastructure.
We would like to thank all the staff, moderators and users who have helped the site get to where we are now. In particular we'd like to mention Don and Martin who have been excellent moderators and Andrew who contributes so much to the site we sometimes wonder if he's really a team of people working for us full time. Even with a newborn baby to take care of, he's already chasing up publication of reviews. Finally, we'd like to extend our thanks to the ISP staff and other forum users who give their time to help others on the forum.
We wish all our readers a very Happy New Year!
Sebastien & John