Fibre optic networks, despite their high capital expenditure, could prove to be the most viable long-term solution for providing a sustainable customer experience without straining the network.
Research firm Frost & Sullivan, in its latest analysis "Assessment of Broadband Access Networks", says broadband access networks are undergoing a change in terms of architecture and the applications and services being run on them.
This change, it says, will have fundamental implications on the way access networks and associated business models are viewed. Service providers must consider network architectures that can address the challenges posed by the changing trends in end-user broadband usage.
“The availability of rich multimedia content and services such as Voice over Internet Protocol (VoIP) is driving the growth of broadband services across the world,” says Frost & Sullivan analyst Zachariah Thomas. “Governments and policy makers are actively adopting broadband-friendly policies and offering incentives across the board to improve their standings in broadband league tables.”
He says governments across the world have begun to view the Internet and the access to it as a positive influence on their populace and the economy in general. Local loop bundling policies adopted by governments have seen the emergence of new participants and increased competition in the broadband market. This has resulted in lower prices and higher user uptake.
The availability of flat rate pricing models has largely influenced the adoption of broadband services. While this was a good move in the early days, it has become a challening proposition with the growing need among users for greater bandwidth. This is putting pressure on access networks, both from an operational and financial perspective.
“The services and applications consumers use on their broadband service have changed from activities such as Web browsing and e-mail to more latency-intolerant applications such as streaming video and VoIP,” says Thomas. “This has had a negative impact on the variable costs of service providers without providing additional revenue.”
Going forward, the success of broadband access services will depend on their ability to support and monetise the increasing demand from bandwidth-intensive applications such as peer-to-peer (P2P) and streaming video.
Broadband service providers must be open to innovative business models and pricing schemes to survive the challenges posed by these trends, Thomas says.