FT : Broadband Quality Rankings
Monday, October 19, 2009
Singpaore is (surprisingly) at #28 on this list !
…..With more people and more processes coming to rely on the internet, high speed access to fixed or mobile networks is growing in importance. The impact of bandwidth on businesses, entrepreneurs, wealth creation and the provision of information and public services can be significant. But as the study – by Oxford University’s Saïd Business School and Spain’s Universidad de Oviedo and sponsored by Cisco, the communications manufacturer – shows, global variations are equally large. Fernando Gil de Bernabé, a senior director at Cisco, says there has been a rapid escalation in expectations of broadband: “Only a few years ago, the analysis of broadband diffusion focused on who had a connection and who did not. As bandwidth-intensive applications such as video become pervasive, the broadband gap is being redefined as a quality divide.” He says quality is different from raw download speed, in which Japan, South Korea and France appeared well ahead of the pack in last year’s statistics from the Organisation for Economic Co-operation and Development. Mr Gil de Bernabé defines high quality today as a download speed of 3.75 megabits per second, upload speed of 1mbps and latency [delay in response] of 95 milliseconds. Next year, however, the demands of visual networking, large file sharing and high definition video streaming will raise the bar to 11.25mbps download, 5mbps upload and 60 milliseconds latency.
What business users expect is competitive advantage, however. Phil Irvine of PA Consulting says there is a general belief that economies can be boosted by high quality infrastructure: “Much of that comes from the enablement of business services through IT connectivity and if you do not have that you are economically disadvantaged.” The gap between countries is already clear, and the laggards are not always the most obvious…..It might not be simple, however, to deliver a world in which everybody enjoys access to the growth and prosperity which the internet makes possible, through big, fat optical fibre pipes, because economics, geography and technology make it impractical. Connecting a few subscribers in remote areas by laying broadband cable or building mobile base stations may not be an economic option. This is a digital divide which may be impossible to bridge. In countries such as the UK, where the former monopolistic telecommunications operators have had an obligation to provide voice services universally , copper wiring may be in place but the digital services which can be provided are limited by physics and the distance from the subscriber to the local exchange. Keith Willetts, chairman of TM Forum, the industry association, argues that governments – especially the UK government – and network operators have fumbled the ball: “The only place on the planet that fast broadband is available is relatively near to a telephone exchange in a major city within a country with good quality access networks – mainly the US and western Europe. “The other alternative,” he says, “is a country where the government has either funded or provided incentives for the incumbent phone company to instal lots of access fibre: that is, South Korea, Singapore and Japan. “Australia and the US are considering government-backed investment and the UK is wandering around in circles with the Carter Report and a possible tax on phone lines.” (Lord Carter’s report, published this year, outlined steps to bring about “Digital Britain”, including ways of paying for near-universal broadband.)
But total investment is rising. According to the OECD Communications Outlook for 2009, systems in the OECD region are now being transformed: “Telecommunications investment reached $185bn in 2007, an increase of 9% each year from 2005. Investment grew over the past four years, in sharp contrast with the strong declines observed between 2000 and 2003.” Rob Bamforth, of the consultancy Quocirca, sums up the challenges for governments and the industry: “Some public subsidy is typical but how it is delivered can vary and many new models are emerging – for example, community broadband in the UK where there is an element of community funding combined with both private and public sector finance. “The trick is to balance the return on investment: the private sector wants a quick return but the public sector has social obligations and can withstand a much longer period before payback.” But he see a digital divide remaining: “If each subscriber pays a similar price for access they will enjoy widely varying speeds,” he notes. “Even in a ‘next generation’ broadband country, some city users may have 100mbps but rural users only 2mbps.”…..Charles Nasser, chief executive of the communications services group Claranet, points out that if a company’s employees are using the internet only for browsing and e-mail, then not a lot of bandwidth is required. “We have done a lot of traffic analysis and the numbers are staggering. At peak times – and that means in business hours – up to 80% of the bandwidth is being used for nonbusiness applications such as Face-book, Google and YouTube. “What does the business really need? Most managers have not asked themselves the question, nor do they have the tools to answer it.