2012 consumer research exploding five common broadband myths · 2017-05-01 · building...

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2012 Consumer Research

Exploding Five Common Broadband Myths

D

Michael Render June 2012


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1,200 Random Internet

Users

U.S. & Canada

1,000 Additional

FTTH Users

U.S. & Canada

Data Sources For Study

450 North American FTTH Providers


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Myth #1. “Everything is going wireless”


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Besides Uneducated Assumptions, This Myth Originates From One Study


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Public Vision Of Wireless Industry Vision Of Wireless

Today’s Wireless/Mobile Is Really An End Point Technology

Wireless communications are driven underground and on to fiber as quickly as possible.


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Possible communication through the earth using sub atomic “neutrinos”

Someday… Probably Decades Away, True End-To-End Wireless Communication Might Be Possible


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• Wireless is constrained by the physics of energy dispersion

• Even a network of wireless antennas has great range reach but limited power

• Wireless using radio waves will never match direct fiber connection speeds

Today’s Wireless /Mobile, Even At The End Point, Has Huge Limitations


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“ The petition of a company for permission to set in the streets of Paris poles for wireless telegraph service, so the "the man in the street" can use it and that its waves can be brought into any household, is a suggestion of illimitable possibilities.” The Cosmopolitan 1902

Contrary To Public Opinion, Wireless/Mobile Is Not A New Vision


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Wireless/Mobile Is Very Important … But Not The Primary Way The Internet Is Utilized


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48%

40%

7%

5%

0% 20% 40% 60% 80% 100%

Desktop

Laptop

Handheld device

Tablet device

10

Most Online Time Is Spent On Large Screen Devices Percent Of Time Spent Online By Device Type (Average For All Ages)

88%


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48%

34%

14%

5%

0% 20% 40% 60% 80% 100%

Laptop

Desktop

Handheld device

Tablet device

11

Most Online Time Is Spent On Large Screen Devices Percent Of Time Spent Online By Device Type (Average For Under 35 Age)

82%


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Mobile Devices Are Not Generally Preferred At Home Percent Preferring Devices At Home For Online Tasks


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13

Each Device/Delivery Has Its Place

Wireless = Mobility Wireline = Richest Experience (Screen size, speed)

For example, only 18% of users are very satisfied with streaming video play on wireless services versus 28% on cable modem and 47% on FTTH.


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Myth #2: “Rural areas don’t want or need ‘gold plated broadband’ like FTTH”


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Rural Residents Have The Same Basic Needs – But Are More Physically Disconnected From Sources


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4.2

3.8

0 1 2 3 4 5 6

Rural

Suburban/Urban

16

Rural Internet Users Spend More Time Online At Home Hours Spent Online By Place (Average For All Ages)

2012 RVA Consumer Study


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51%

44%

34%

32%

51%

47%

35%

34%

0% 20% 40% 60% 80% 100%

Advanced online shopping

Advanced home medical

Advanced college

Home monitoring Suburban/Urban Rural

17

Rural Users Are More Interested In Many Services Percent Somewhat Or Very Interested In Future Services


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63%

54%

49%

46%

40%

31%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Rural ILEC

RuraL Electric Co-Op

Rural Competitive Prov/ CLEC

Muni Retail

RBOC Overbuild

Suburban CLEC

18

FTTH Take-Rates Are Higher In Rural Areas Take-Rates From Provider Data

It should be noted that competition is generally less robust in rural areas.

FTTH rural electric coop systems are new – some are achieving over 70% take rates.


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Rural Users Have Even More Need For Quality Broadband


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Myth # 3“DSL/FTTN is still the most practical solution for private telcos”


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61%

37%

33%

28%

0% 20% 40% 60% 80% 100%

FTTH

Cable modem

Wireless

DSL

21

DSL Has The Lowest Internet Satisfaction Satisfaction With DSL Download Speeds


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Higher Performance Is Critical To Telco Providers 2011 Broadband Net Additions Correlate To Broadband Performance

Average 2011 speeds from Speedtest.net . 2011 Net Broadband adds from Leichtman Research Group. Top 3 U.S. Telcos, Top 3 U.S. MSOs


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Speed and performance are winning in the United States. DSL is down versus Docsis3 Cable modem. FTTH continues to increase – constrained by availability.

Market Share: Broadband Use At Home By Type


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Telcos With DSL Should Change Strategy Quickly


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Myth #4: “Public FTTH Systems are failing and are unnecessarily redundant”

http://stopthecap.com/wp-content/uploads/2010/05/propaganda-2.jpg


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There Is Little To Fear … But Much To Gain From Munis


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80.7%

66.4%

63.0%

55.1%

53.2%

48.7%

45.8%

40.1%

30.5%

28.9%

0% 20% 40% 60% 80% 100%

Real Estate Dev

Cable TV/ MSO

ILEC

ILEC/ Clec Div Ilec

Electric Co-Op

Competitive Prov/ CLEC

Muni Retail

RBOC Overbuild

Urban CLEC

Muni Wholesale

27

Muni FTTH Systems Have Been Generally Successful Even Many Systems Called “failures” In The Past Are Successful Today

Munis with wholesale systems required by state law have struggled more.


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In the Big Picture, Muni FTTH Systems Are Not A Serious Competitive Threat To Private Players

13%

87%

Muni electric subs

Muni FTTH systems will probably not exceed 5% of total FTTH homes served – and are very rare where private service exists or is anticipated. They require: - Utility experience (there are few

that are not electric utilities) - Telecom experience (must be

acquired) - Clear motivation (no private

FTTH System on the horizon) - A vote of the people

4%

96%

Muni FTTH subs


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Muni FTTH Systems Are Technology Incubators… Often Benefiting Private Players

Prior to 2004, the largest FTTH systems were Muni – helping to test and develop FTTH at scale.

Today … many Muni FTTH systems are helping to incubate high bandwidth FTTH applications.


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Muni FTTH Offers The Highest Average Bandwidth Highest FTTH Download Speeds By Type

ILECS tend to be rural with less speed demand, less competition, and higher wholesale bandwidth costs. There are approximately twenty-five providers of gigabit service in the U.S.


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Municipalities Provide Great Opportunities For Public/ Private Partnerships

Service/ System experience Marketing experience Back-end systems Head-end systems

Longer term loan paybacks Rights of way Interest in economic development Electric meter reading needs Trenching synergies


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Municipalities Have Important Assets… For All


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Myth # 5: “Advanced broadband isn’t yet impacting lives – and won’t without new ‘Killer Apps’ ”


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0% 20% 40% 60% 80% 100%

Shop online

Play single player games

Upload large files

Download or stream video to computer

Use VOIP for audio

Download/ stream video to television set

Upload video content to Internet

Use two-way video conferencing

2010

2012

34

The Use Of Apps Already Available Is Increasing Rapidly Internet Activities Completed At Least Once Per Month By FTTH Users


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61%

60%

55%

47%

65%

35%

34%

32%

24%

44%

0% 20% 40% 60% 80% 100%

Download speed

Upload Speed

Consistancy of speed

Streaming quality

Service uptime

FTTH

Other Broadband

35

Users Are Much More Satisfied With The FTTH Experience Percent Saying They Are “Very Satisfied” With Aspects Of Service


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• FTTH employed users say they work 1.2 extra day per month from home (on average). 67% of FTTH Users who are employed sometimes work at home.

• 11% of FTTH Users have a home based business.

FTTH Changes How We Work


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FTTH Has The Highest Tested Download Speeds Median Tested Download Speeds


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FTTH Is “Pulling Away” With Tested Upload Speeds Median Tested Upload Speeds


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1.1

1.6

2.5

3.2

0 1 2 3 4 5 6

FTTH

Cable Modem

DSL

Wireless

39

FTTH Is The Most Stable Platform Reported Reboots Required Each Month


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3.1%

6.2%

11.6%

16.9%

0% 10% 20% 30% 40%

FTTH

DSL

Cable Modem

Wireless

40

FTTH Has The Fewest Limitations On Usage Percent Aware Of Caps On Usage


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FTTH Adds Home Value

• Even non FTTH users say if they were considering two $300K homes of equal interest, a home that doesn’t already have FTTH and advanced wiring would have to be discounted $5,400 more to be considered.

• Within the past few years, 71% of those moving to homes with existing FTTH availability said it was important to their purchase decision.


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FTTH Is Already Changing Lives… In A Big Way


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Post Script: We Have FTTH Branding Work To Do!

21%

79%

Aware of FTTH terms before survey

Not Aware


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2012 Consumer Research

Exploding Five Common Broadband Myths

D

Michael Render June, 2012

2012 consumer research exploding five common broadband myths · 2017-05-01 · building...

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