BATM - Broadband bright future

Some general background stuff, but it does emphasise the growth in telecoms spending over the next couple of years. Sounds pretty good for Pilat Media Global's prospects too.

Defining the Future of Modern Communications: "Triple Play" of Voice, Video and Data

Embedded into all these predictions is the assumption that online video is the next big thing in Internet content and that its popularity can translate into significant advertising sales. YouTube, not even two years old, has a 45 percent share of the online video market, which is more than its top four competitors combined, according to market trackers at Hitwise.

While the cable TV companies such as Comcast, the largest U.S. cable operator, are quite familiar with the business of developing in-house TV content for cable distribution, both Comcast and Verizon see user-generated video as a significant differentiator. Comcast has decided to roll its own site, called Ziddio, meanwhile AT&T also decided to roll out U-Verse(SM). The triple play of voice, video and data could not be more exemplified as it is being seen today and marks the beginning of a new cellular revolution linking telecom and internet video.

Mobile devices will continue to take center stage in consumption of high-bandwidth media, and many consumers, especially younger segments of the population, will rely heavily on their mobile devices for peer-to-peer as well as group and other interactions. After taking a nosedive in recent years, telecom spending enjoyed a 9 percent boost in 2005. Increased wireless demand, network expansion and broadband Internet access was responsible for the $856.9 billion hike, according to the Telecommunications Industry Association.

The upward trend is expected to level off at 9 percent annual growth, reaching $1.2 trillion in telecom sales between 2006 to 2009, according to the industry group's annual Market Review and Forecast report. That turnaround is fueled by renewed demand for fiber-optic cable. Key market drivers will be: the transition to VoIP, access lines rising to an estimated 26 million by 2008; wireless services, with increased integrated data services, such as online video games, high-speed third-generation (3G) wireless services, Wi-Fi technology and Wi-max, to increase at 10.4%, reaching $151.1bn in investment spending by 2008; Internet access, with increased broadband subscribers at flat rates, reaching 57 million subscribers by 2008. Moreover, December is the biggest month of the year for wireless sales and with $54 billion spent on TV advertising annually, advertisers and marketers will need to focus on this medium, while telecom and cable companies will also jockey for position over the most lucrative broadband markets.

The implications of this shift have been noted at a recent Piper Jaffray Global Internet Summit by senior research analyst, Safa Rashtchy, who stated "beyond the migration to online marketing, the traditional media companies are likely to undergo major shifts in their business models, with the current conglomerates, as well as the telecom 'gate keepers' likely to lose some of their power. Not only might the era of mass marketing and controlled content distribution be over, but the new model that is evolving is highly personalized and does not allow amassing of distribution power. User-generated content will play a significant role in the media world over the next ten years."

The landscape of telecom, however, is yet to be determined as 2006 could mark a defining year for the industry led by the proposed buyout of BellSouth Corp. by AT&T Inc. for $84 billion. The merger would make AT&T the world's largest telecommunications company with 70 million landline customers across 22 states. Currently a co-owner of Cingular Wireless with BellSouth, the deal would also give AT&T full control of the nation's largest cellular company.
The corporations that own these "pipes' are racing to gobble up as many competitors as possible so they can dictate how you use the Internet. On that note, according to Richard Lindner, AT&T's chief financial officer, AT&T chose to invest in FFTN (Fibre to the Node) technology that uses copper for the final connection to the home rather than more expensive FTTH (Fibre to the Home) being deployed by rival Verizon Communications. Whereas, Verizon Business signed a $500 million deal with a consortium that includes China Telecom and China Netcom to build in the first quarter of 2007 an undersea optical cable system directly linking the U.S. mainland and China and assemble a cable that will increase by 60 times overall existing direct-link capacity. The consortium also includes China Unicom, Korea Telecom and Chunghwa Telecom Taiwan Construction.