Decoupling of demand and revenue aka: dumbpipeification Bandwidth You are here Demand Carrier Revenue In 2011, at least one Canadian carrier was reporting data growth of 5% per week@tpurves
What does this look like? • From Q1 2011 to Q1 2012, Rogers saw their number of smart phone subscribers go from 3.3 to 4.6 M - 38% growth • In the same period, Rogers total wireless revenues declined – negative 1% growth • Solution: vertically integrate into media! Lock-up content licenses, diversify into new “value” added services • Note: when you see a whole new service marketed by a telco, ask yourself who’s problem are they trying to solve here their’s or mine? • Meanwhile, feed the beast… our insatiable demand for bandwidth@tpurves
Government’s role • Wireless services in Canada are governed by either the CRTC or Industry Canada. Or sometimes both. Or neither. • Official mandate and limits of CRTC defined by Broadcast and Telecom acts (fyi: last updated by Parliament in early 90s) • Provinces also have patchwork of consumer protection legislation relative to wireless • Canada has no official national digital strategy@tpurves
How this cookie is going to crumble Rogers New Bell & Telus will Entrants: split these and there can combine them only one • Contiguous spectrum is more valuable • Rogers will take B block, aligned with ATT in the US, and try to make the best of combining it with A block • Bell/Telus will take C1 & C2 which they may be able to make effective joint use of through their network sharing agreements • C block will be fiercely contested by 3-4 remaining carriers (no supported by foreign financing) also helping to drive-up the bidding on B and C as well to prevent tacit collusion amongst big 3 and maximize government revenues.
How the conservative government will spend the next 4B auction proceeds: 1. Implementing a national digital strategy 2. Incentives or tax rebates for digital infrastructure investment 3. Grants or venture funding for Canadian digital startups or content creators 4. Rolling out rural broadband 5. Rolling out urban broadband or fibre 6. Waiving HST on wired & wireless broadband subscriptions 7. Save the CBC 8. General revenues 9. Paying baby-boomers’ healthcare bills 10. Buying votes in time for the next election@tpurves