Thought Leaders Thought Leaders Essays from Innovators Essays from Innovators Edited by Fernando Gil De Bernabé Y Varela Edited by Fernando Gil De Bernabé Y Varela
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Connected Homes Thought Leaders Thought Leaders Essays from innovators Essays from innovators Edited by Fernando Gil de Bernabé y Varela Edited by Fernando Gil de Bernabé y Varela Bill Bodin The communications industry is undergoing massive change, IBM & INTERNET HOME ALLIANCE and nowhere is that more evident than in the arena of consumer Pierre Danon BT broadband. Virtually every service provider is attempting to capture Steve David this still-nascent but exploding market – from incumbents, alternative PROCTER & GAMBLE service providers, and cable and satellite operators to mobile and Ashley Highfield Internet portals. This selection of essays provides a look at the forces BBC that are shaping the consumer broadband market, with the goal of David Hulbert WALT DISNEY helping service providers adapt to and profit from this opportunity. Tim Kelly Editor, Fernando Gil de Bernabé, reveals a coherent picture of the INTERNATIONAL TELECOMMUNICATION UNION consumer broadband market in 2004, sensing the pulse of different Sanghoon Lee key players in the industry, and providing insight and pragmatic views KOREA TELECOM on how to succeed in this rapidly growing marketplace. Connected Paul Liao PANASONIC TECHNOLOGIES Homes contains views and advice from some of the most innovative Keiichi Makizono executives and leading thinkers around the world. Essays cover the SOFTBANK BB ‘connected’ home and consumer; the challenge of diversification into Forrest Miller content and advanced communication services; how to monetise SBC COMMUNICATIONS INC broadband services; and visionary examples of what is out there, Johannes Mohn BERTELSMANN AG beyond broadband. Andrew Odlyzko UNIVERSITY OF MINNESOTA Aldo Olivari TELECOM ITALIA Silvio Scaglia E.BISCOM Jeff Weber SBC OPERATIONS INC Zhang Jia Hua CHINA TELECOM Jong-Lok Yoon KOREA TELECOM Price £9.99 B 15.00 $19.00 Thought Leaders Essays from innovators Edited by Fernando Gil de Bernabé y Varela Connected Homes Contents The Cisco Internet Business Solutions Group (IBSG) helps customers transform their institutions 1 Introduction and organisations (or business), create new services, and drive industry-leading change through Fernando Gil de Bernabé y Varela , Managing Director for Service Providers, IBSG, EMEA, Cisco Systems Inc the use of technology and process innovation. IBSG consultants offer a unique combination of SECTION 1: CONNECTED HOME, CONNECTED CONSUMER in-depth industry, business and technical knowledge. 18 Technology to suit our lifestyle: where work and leisure are not a place Bill Bodin | Chief Technology Officer, Internet Home Alliance, and Senior Technical Staff Member, IBM, USA 1.1 IBSG’s Global Service Provider Practice provides trusted, independent advice to senior business executives from some of the world’s largest telecom service providers. IBSG helps customers 28 The connected home: a look into the future Aldo Olivari | CEO, Telecom Italia Lab, Italy1.2 improve their business through innovative programs and approaches that target both new revenue generation and operational expenditure reduction. The Service Provider Practice consists of a team 44 Consumers take the lead Steve David | Chief Business-to-Business Officer, Procter & Gamble, USA 1.3 of seasoned advisors drawn from the industry and the major management consulting firms. 50 Taking ideas from life to create life Paul Liao | President, Panasonic Technologies, Matsushita, USA 1.4 SECTION 2: CONTENT VS COMMUNICATIONS 58 Finding a voice: learning from history Andrew Odlyzko | Director, Interdisciplinary Digital Technology Center, University of Minnesota, USA 2.1 66 Broadband without the hype David Hulbert | President, Walt Disney TV International, UK 2.2 74 A paradigm shift for content distribution Johannes Mohn | Executive vice-president, Media Technology, Bertelsmann AG, Germany2.3 78 A broadcast strategy for an online world Ashley Highfield | Director, BBC New Media and Technology, UK 2.4 SECTION 3: MAKING MONEY IN BROADBAND 84 Evolution of IP enabled communication services Forrest E Miller | Group president, External Affairs & Planning, SBC Communications Inc, USA Jeffrey G Weber | Vice-president, Product & Strategy, SBC Operations Inc, USA 3.1 88 Leaping the chasm from connection to powerful enabler Published by ISBN 0-9546445-6-5 Pierre Danon | CEO, BT Retail, UK 3.2 Premium Publishing 27 Bassein Park Road Many thanks to the interviewers: Marco Nicosia, 94 Korea: hands-down winner in the world broadband race London Michael Rabinowitz, Phil Smith, Steven Ying, Pastora Jong-Lok Yoon | CTO, Korea Telecom, Republic of Korea3.3 W12 9RW Valero, Aarti Gurnani, Jimmy Sartain, David Gordon, [email protected] Robbert Kuppens, Ramon Talboo, Vishrut Patel, Tony 98 China Telecom: moving forward in the value chain Barra, Kristine Stewart, Neville Wheeler, Hirokazu Zhang Jia Hua | Managing director, Product Development Division, China Telecom, China3.4 First published 2004 Nishikado, Cresta Norris. And to executive sponsors: Copyright © 2004 Premium Publishing Toby Burton, Bill Brownell The moral rights of the authors have been asserted. Special thanks to the Internet Home Alliance All rights reserved. Edited by Fernando Gil de Bernabé y Varela Without limiting the rights under copyright reserved Design by Loman Street Studio above, no part of this publication may be reproduced, Cover images by Getty Images stored or introduced into aretrieval system or Printed by G&B printers transmitted in any form orby any means without the prior knowledge and written permission of the A catalogue record for this book is available from copyright owner and the above publisher of the book. the British Library Contents Introduction SECTION 4: BEYOND BROADBAND 108 How FastWeb is setting the pace: a broadband success story 4.1 Silvio Scaglia | Founder and chairman, e.Biscom, Italy 114 Surviving as a winner in Japan: Yahoo! BB’s strategy for becoming number one 4.2 Keiichi Makizono | Head General Manager, Main Technology Division, Softbank BB 126 Beyond broadband: KT’s Internet broadband service 4.3 Sanghoon Lee | Executive vice-president, Network Group, Korea Telecom, Republic of Korea 134 The broadband revolution: translating vision into action 4.4 Tim Kelly | Head of the Strategy and Policy Unit, International Telecommunication Union, Switzerland INFORMATION 143 Author biographies 2 CONNECTED HOMES INTRODUCTION 3 Consumer broadband: the path to growth and profitability* Fernando Gil de Bernabé y Varela | Managing Director for Service *Note:this essay is an abstract of the Providers, Internet Business Solutions Cisco IBSG white paper on Consumer Broadband Group, EMEA, Cisco Systems, Inc available at http://www.cisco.com/go/consumerbroadband The communications industry is undergoing massive change, and broadband offers traditional telecommunication service providers the chance nowhere is that more evident than in the arena of consumer to enter the video distribution business, it also allows cable service providers broadband. Virtually every service provider is attempting to capture to compete in the voice market. Broadband allows service providers to this still-nascent but exploding market – from incumbents, alternative approximately double the average revenue per user (ARPU) in access when 4 service providers, and cable and satellite operators to mobile and compared to traditional dial-up , but it also provides consumers with the 4. ARPU Western Europe on Internet portals. This selection of essays provides a look at the forces opportunity to consolidate multiple lines for fax, voice and Internet access BB Internet access of $362 by end of 2003,versus ARPU of $185 on dial that are shaping the consumer broadband market, with the goal of onto a single broadband line. Already, service providers are seeing once lucrative Internet access.IDC European BB helping service providers adapt to and profit from this opportunity. voice revenues erode as consumers start moving to Voice Over IP (VoIP). In Asia Forecasts,April 2004. alone (excluding Japan) consumer VoIP revenues reached $1.7billion in 2003 5 This book takes a snapshot of the consumer broadband market in and are forecast to reach $3.4 billion by 2007 . And cable service providers and 5. IDC APAiC VoIP Services 2004, sensing the pulse of different key players in the industry, and incumbents alike will soon face competition from pure IP-based service providers Forecast 2004. providing insight and pragmatic views on how to succeed in such as Yahoo!, Broadband (BB) in Japan, FastWeb in Italy and B2 in Sweden. broadband. The book contains views and advice from some of the most innovative executives and leading thinkers around the world Faced with these challenges, some service providers proceed cautiously, rolling and from different participants in the value chain of consumer out consumer broadband only when it doesn’t endanger their current broadband. The book is structured into four sections with essays that businesses. Some see broadband as simply a bad business to be in. One senior cover the ‘connected’ home and consumer; the challenge of executive of a large European telco was heard to say in 2002 that, ‘We all 6 diversification into content and/or into advanced communication know that it (broadband access) is unprofitable!’ Many see broadband simply 6. Ovum Financial Prospects for DSL, services; how to monetise broadband; and some examples of what is as an opportunity to defend their traditional voice revenues. Others are keeping September 2003. beyond broadband access. broadband prices