Broadband beats wireless as key to future

An authoritative new global study has pinpointed broadband as the key to in the e-economy in years to come.

An authoritative new global study has pinpointed broadband as the key to in the e-economy in years to come.

Hassan Mahamdallie

The study entitled, "Business Redefined: Connecting Content, Applications, and Customers" by management and IT consultants Cap Gemini Ernst & Young, is based on 128 in-depth interviews with chief executive officers (CEOs) and executives in the communications, entertainment and enabling technology industries.

When asked, "How will customers experience entertainment/communications differently in the near future?" some 64% of the executives interviewed cited broadband as significant. Wireless Web was highlighted by 23%.

One executive said, "Broadband will be everywhere, and it will be reliable, available, and low cost."

The report also pinpointed three hurdles to a mass expansion of broadband: Internet penetration, problems of roll out and a recruiting a skilled workforce.

The study says, "Metered access tends to inhibit Internet adoption, whereas unmetred local telephone access tends to accelerate it. Nearly everyone has universal unmetered Internet access in the US, which is the main reason why that country's broadband adoption rate accelerates first."

Many of the CEOs interviewed were frustrated that roll out of local broadband is being held back by the inability to "get our back office to keep up". In Britain many potential providers have pulled out of broadband roll out blaming BT's lack of enthusiasm in opening up local exchanges to its rivals.

As ever, skill shortages loomed large on the executives' consciousness. The report highlighted an "intensifying battle for talent" with one CEO commenting, "The only sustainable competitive advantage is the team you build."

The study shows that many executives of big communications and entertainment companies are worried about the threat of start-up competition. Last year there were nearly 1,500 new competitors in the US, nearly 500 in Germany and 200 in Britain.

One CEO remarked that, "slow incumbents with a huge customer base find that base is being eaten by nimble, flexible players." This is leading to loss of market share. In Hong Kong, for example, the biggest incumbent provider went from 100% market share in 1995 to 61% in 2000.

The study highlights the development of content packagers. These companies consolidate and organise "the overabundance of available information and entertainment choices" and filter it through a productive user interface. Cap Gemini Ernst & Young predict that, "Positioning yourself effectively in this arena could become the key driver of future success."

  • The report interviewed 128 CEOs and executives from around the world, including Howard Stringer CEO of Sony Corporation of America; Ken Cooper of Warner; Harris Jones of One 2 One; Paul Smits of KPN, Royal Dutch Telecoms; Jens Alder of Swisscom and David Elstein of Channel 5 TV.

  • Business Redefined: Connecting Content, Applications and Customers, Cap Gemini and Ernst & Young.

  • Read more on Business applications