Tiscali CEO says focus needs to move from speed to bandwidth
Tiscali now has 55% coverage of the UK households with its unbundled network, just one of the snippets to come out of an interview Mary Turner, who is the CEO of Tiscali UK, has given to Silicon.com.
Broadband Britain - why speed is not enough... "The internet and broadband is not just about speed. There's a huge amount of focus on speed. If you track back two or three years ago and the whole of the UK was on half meg [Mb] I would say that's not sufficient. Today the basic package is 8Mbps broadband and we're now talking about 16 to 20Mbps broadband so I think from a speed perspective we're there. Can we increase the speed - yes. But I think the next phase of internet is the volume – i.e. the bandwidth. Because if you look at what the internet has been used for it has been used for email, surfing, file transfers and 1 or 2Mbps broadband is more than sufficient. The next generation of usage and users are going to download videos, stream soaps and so on and it's not speed that matters. Sure you need speed but 16Mbps is more than enough. What you need is the bandwidth."Question and answer from Silicon.com interview
This may confuse some people as many assume speed is bandwidth. The speed is referring to the basic connection to the telephone exchange and it was just over four years ago that 1Mbps connections were being trialled for home users. With unbundled lines now giving connections speeds up to 24Mbps, dependent on provider and line length, and BT Wholesale offering up to 8Mbps since 2006, things have moved on. The bandwidth comes into play in terms of how much of the backhaul capacity from the exchange out to the Internet is allocated to each user. The amount varies from provider to provider but probably has changed very little over the years, rates of 20 to 40Kbps (Kilo bits per second) are common. This allocation represents what you would get speed wise if everyone was actively using the capacity at the same time and is used in budget calculations to determine the cost of a package. For products based around a BT IPstream solution, the costs are pretty much the same for all providers so if one can offer unlimited access for £14 when others are only offering 3GB it usually means higher contention i.e. less available bandwidth for you which will exhibit itself as large changes in speed between peak and off-peak times.
So what Mary Turner means is the challenge is to increase this allocation to a figure that will allow people to embrace the multi-media options available on the Internet. To say the next generation are the ones who are going to download video, stream soaps etc is possibly a bit out of date as video over a broadband connection is firmly with us.
Where things fall apart is the cost of providing capacity. Mary Turner aludes to the Tiscali core network running at only 10% of capacity and a stranglehold on fibre into the exchange from BT being the issue for the unbundled networks and the high cost of IPstream in other parts of the country. The irony is IPstream was kept at a deliberate price margin above unbundled and Datastream connections to increase competition which has worked for 50 to 70% of households.
Perhaps one solution to the current wave of publicity complaining about people paying for an up to 8Mbps but feeling they should have a reduction in price if they get less than half this speed could be resolved by shifting how broadband was sold from headline speeds to the allocated bandwidth per user. £19.99 for a 30Kbps assured speed, £29.99 for 75Kbps and so on, at any one time people would probably see speeds well in excess of these figures but would know at busy times by paying more they get a bigger slice of the pie.