Market signals

June/July 2002

While it has been easy to become distracted by the World Cup finals in recent weeks, few of you in the UK will have failed to notice that at the moment - alongside the traditional mix of increasingly esoteric commercials - the British public is being bombarded with adverts for ‘broadband’ and GPRS-enabled mobile telephone services.

While it is obviously impossible to judge how successful the ‘conversion rates’ of these commercials are in our capacity as mere observers, there is no doubt that for the first time operators are attempting to tap into the collective conscience of the mass market.

Does this mean that - for reasons known only to the marketing machines of the various providers - that there has been a ‘paradigm shift’ in the public’s attitude to new technology? No, it simply means that after two years of talking up the technology, the operators are now logistically able to provide it to significant numbers. Could you really judge the success of a new mass-market product without an accompanying mass-market advertising campaign? Exactly. Thus, in some quarters, broadband’s obituary has been published far too soon.

Nevertheless, some parts of the broadband industry have gone badly wrong. Witness the collapse of yet another pan-European broadband backbone provider KPNQwest. Great idea, but just another business built on mere speculation rather than on hard and realistic demand projections.

Moreover, while the mass market may at last be able to benefit from reasonably priced and smartly provisioned broadband access, it may do the exact opposite for the wider broadband industry. Ironically, it is those same companies - whose dominance broadband provision by new players was supposed to challenge - that appear poised to monopolise this rich new revenue stream.

But from a customer point of view, why should you care where your broadband service comes from? Simply, because you are likely to get a cheaper and better service from a provider which operates in a competitive market. Therefore, until the fundamental competitive issues at the heart of the industry are solved, we must temper our newly-found broadband enthusiasm with an element of concern.

On an administrative note, the more observant among you will have also noticed that the magazine is later than usual. This is because from this issue onwards Broadband will change from a monthly to a bi-monthly title. This will give us the time to provide you with an even richer mix of news, analysis and comment and enable us to do proper justice to the exciting developments that are now beginning to occur throughout the industry.