As the popularity of bandwidth intensive applications such as iPlayer, YouTube and podcasts increase, have the ISPs that previously benefited so well from their dirt cheap broadband, unlimited broadband and even free laptop offerings punched too much above their weight?
In the red corner…The ISPs!
For a long time now large, end user focused ISPs have invaded the market with extremely price-competitive offers that have undoubtedly brought down the average cost of broadband. A significant benefit to the end user you may argue and we agree. No-one denies this was a successful customer growth strategy but is it a sustainable business model?
Apparently not! As the likes of PlusNet complain that their average cost per user has tripled since the launch of the iPlayer and other leading ISPs approach the BBC for funding to off-set their increase in costs, Entanet asks what’s all the fuss about?
In the blue corner…The iPlayer et al
At the end of the day the BBC’s iPlayer is just one of the first in a long line of applications that will see an increase in consumer bandwidth demand. As people network their homes with multiple laptops and gaming consoles and emerging technologies such as IPTV become more and more popular, demand will only increase. If the ISPs can’t cope with one ‘bandwidth heavy’ application, what’s going to happen over the next few years?
The BBC seems to agree. Ashley Highfield, the BBC’s former director of Future Media & Technology, stated “The regulators will undoubtedly determine whether this whole issue is structural, or whether what we are witnessing is that the ISPs are fighting a commercial war on a public policy stage, and that this has nothing to do with content providers or the BBC at all. Indeed Ofcom, in their market impact assessment of iPlayer, believe that much of the increase in consumption over IP would happen anyway, with or without iPlayer.”
- BBC Internet Blog: “Hidden Costs” of watching TV online
- Ofcom: BBC new on-demand proposals – Market Impact Assessment
So why isn’t Entanet feeling the sting?
The answer is simple – our business model. We have always avoided offering cheap, ‘unlimited’ broadband packages to the masses. In particular the key to this successful business model is planning, specifically calculating a sustainable amount of capacity per user. Without this key consideration ISP’s will increasingly experience unforeseen cost increases and strain on their networks as and when their end users’ bandwidth demands increase. This will inevitably result in a poorer user experience for the customer and possible price increases.
Entanet’s ability to forward plan has been demonstrated repeatedly by our timely investments into central pipes. This has ensured minimal impact from bandwidth intensive applications that other ISPs have found so difficult to cope with.
So who’s the winner?
Well that’s still to be decided but the only certain outcome is that, unless ISPs make drastic changes to support sufficient capacity per user, the main loser will be the end user who will suffer from a poor quality of service. As the saying goes, you get what you pay for!