MSO network forecast is partly cloudy–Part1

Today’s multiservice operator (MSO) networks have evolved by balancing the maximum economic benefits of past investments against current technological innovations. In turning our attention to the future and applying science to understand the real limits of what “can be” we can start to get some clarity around what we should do to get there.

Most certainly the next phase in our network evolution will result in a total optimization of the user experience, with the ultimate goal being creation of networks with seemingly infinite capacity. This will affect the entire value chain from content producers through network providers to end device manufacturers.

So what are we trying to build?

MSOs want to build networks that provide:

  • Highest performance at the optimum economics. Ubiquitous connectivity with the highest bandwidth, lowest latency, and highest availability. But this has to be provided at the lowest cost per delivered bit.
  • Maximum flexibility and simplicity. The network has to be tailored to each application by being ‘programmable’, effectively opening up a historically closed environment to become an open innovation platform for external services and applications.  But this has to be simple to consume so the network can accommodate new MSO business models morph and adapt to new consumption trends, partnerships and revenue streams
  • Complete personalization. As life becomes increasingly digitized, the physical world becomes permanently attached to the digital world, and the network will provide a personal connectivity ‘fabric’. In many ways, you can think of it rather like your digital skin or a 6th sense that connects each user’s physical world to their digital world. .

So why do it?

Well, fundamentally it is a human need problem – to connect, to collaborate, to communicate, to learn, and be entertained all in a secure manner.  And we have decided to live this digital life wirelessly.

This wireless future is not a bad thing for MSOs, as all wireless networks are backhauled over wired networks, and a large proportion (70% by many estimates) of that wireless traffic is carried over Wi-Fi, for which MSOs have combined to create national and pan-national networks.  To see this trend is already happening, just look at tablet (an inherently wireless and mobile device) adoption for example.  Market data shows that tablet shipments exceeded (fixed) PC and nomadic notebook PC ancestors in early 2013 (Figure 1) and exceeded their combined shipments in early 2014.  

Computing device shipments

Figure 1. Computing device shipments Source: KPCB INTERNET TRENDS, D11 CONFERENCE, 5 / 29 / 2013

3 components of future success

The interesting property of wireless devices is that they have to be small, portable, and relatively lightweight, with long battery lives, which limits the amount of storage and processing power they possess. This is true of tablets and smartphones, and even more so for machines, or ‘things’. In order to overcome this inherent limitation, they have to connect to the CLOUD to access the desired CONTENT. To do that they require high quality CONNECTIVITY, as outlined above.

So, in essence, there are 3 components of future business success.

CONTENT will remain king, although no longer the single dominant business focus for the cable industry.  This content will be stored in the CLOUD, the 2nd dimension of future business success, to which CONNECTIVITY must be provided – the 3rd dimension of future business success.

Jointly these 3 dimensions will combine to determine future business winners, which will be those who remove the complexity that exists in today´s networks and unlock unfulfilled commercial potential.  For further discussion, read part 2 of this series.

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