By Russ Banham
Forbes
Small and midsize companies dependent on wired technologies are in for some good news: Faster internet connections are on the way.
Competition to provide them is intensifying among telecom companies, cable companies, satellite TV providers and wireless internet service providers. Many are already preparing and squaring off to build tomorrow’s communications infrastructure.
“The demand for high-speed broadband is growing exponentially,” said Daniel Hays, a principal at the business-strategy consulting arm of PricewaterhouseCoopers. “Many companies are looking to connect things through the internet, while also transitioning to cloud services and cloud-based apps.”
Speeds Lag Asia
When demand for a product or service is high, it puts the onus on suppliers to meet the need. This is the case now with the mandate to provide more bandwidth.
The United States has long lagged other countries like South Korea and Japan in connection speeds. But as companies embrace the internet — and mobile technologies spread the work among geographically far-flung people and facilities — this disparity may diminish.
“The big challenge has been in rural areas of the U.S., where speeds are much slower and availability is often a problem,” said Yoel Zanger, CEO of Giraffic, a provider of adaptive video acceleration technology designed to eliminate re-buffering issues. “Given the business we’re in, we are well aware of these problems. But I believe it’s just a matter of time before the U.S. catches up to the quality and speeds of other countries.”
Hays and Zanger predict that rising consumer and business demand for more bandwidth will compel longtime internet service providers in the telecom and cable industries to improve the infrastructure. The industries also are in the crosshairs of newer competitors like the wireless internet service providers, known as WISPs, as well as more established satellite television providers. WISPs don’t need to string cable to a location, making them a good solution in rural areas not served by telecom and cable companies.
“More than 1,000 WISPs have popped up in the past 20 years, and not just in extremely remote locations,” said Hays, who noted that his in-laws get internet through a WISP even though they live just 25 miles outside Washington, D.C.
A past challenge for WISPs was their connection speeds, which have markedly improved to effectively compete with more long-standing internet service providers (ISPs). Many WISPs also offer virtual private networking and voice over IP services.
Satellite TV providers also serve as alternative providers of the internet to WISPs. They, like traditional telecom and cable providers of internet services, charge tiered rates based on a customer’s speed and bandwidth preferences.
“The emergence of competitors like WISPs and fiber optic networks, in addition to traditional competition coming from cable TV companies, is stimulating both the cable and telecom industries to increase bandwidth and connection speeds,” said Hays. “Many analysts, myself included, believe the future of the cable industry will be more about broadband than it currently is about television.”
Among the traditional telecoms speeding up internet connections is CenturyLink, which has set a goal of achieving broadband speeds of at least 40 megabits per second for half of its customer base by 2019.
Smooth Operators
As connections speed up and more data travels over the internet, bottlenecks are inevitable, increasing the risk of having “points of failure,” Zanger said.
Congestion can occur at any juncture, whether it’s at the point where the content originates, the telecommunication network that connects to user devices or somewhere in between.
“A chain is only as strong as its weakest link,” said Zanger. “Broadband is nowhere near to mitigating these issues, and I would not be optimistic if I were doing a 2020 prediction.”
But he sees clearer vistas ahead by 2025: “Numerous parties are taking actions now to address these issues, promising faster speeds and bigger broadband that will take root by the middle of the next decade.”