In the competitive world of connectivity, local operators have always had to adapt to meet the growing demand of consumers. Technological evolution and user expectations have driven a steady increase in internet speeds. However, the question arises: Could a period be approaching where fixed broadband is sufficient for most needs? Let’s analyze future trends in bandwidth demand and what this means for small operators.
Is current connectivity sufficient?
In various parts of the world, some consumers may already be reaching the point where they have all the bandwidth they need. According to a major consulting firm, by 2024, over 90% of the most used online applications on fixed broadband networks in developed markets will maintain the same recommended bit rate as in 2023. This includes video and audio streaming applications, video calls, online gaming, and home security. Thanks to continuous improvements in compression, a significant increase in bit rate demand is not expected for most of these applications in the coming years.
Changes in consumer priorities
Historically, the demand for higher speeds has been constant, but recent changes suggest that consumers may be shifting their priorities. Instead of seeking more speed, they may now focus on other qualities such as reliability, indoor coverage, and the absolute value of internet packages. In developed markets, the average household size is decreasing, implying that a 100Mbps connection could be more than sufficient for most needs in 2024.
Real broadband needs of users
Video on demand (VOD) is likely to remain the data-consuming application in most households in developed markets in 2024. Deloitte predicts that around a fifth of VOD will be streamed in 4K, requiring higher bit rates, although compression improvements will help keep bandwidth demands in check. Streaming music and voice services, such as podcasts, will continue to grow in popularity, but with relatively low bandwidth requirements.
The role of regulation and competition
Although the demand for higher speeds may be stabilizing, broadband operators still face regulatory and competitive pressures. Government programs and minimum speed mandates require providers to build networks capable of offering speeds of up to 1Gbps and even 10Gbps to close the digital divide. Competition in the market remains fierce, forcing operators to match the ultra-fast speed offerings of their competitors.
Long-term investments in infrastructure
Building network infrastructure is a long-term investment. Newer technologies not only offer higher speed but also greater reliability and lower latency. Migrating from older technologies such as copper digital subscriber lines to FTTH (fiber to the home) is a logical strategy, even if consumers do not need those speeds immediately.
Conclusion
For small local operators, these trends suggest a different strategic focus. The priority may not be simply to offer more speed but to improve other aspects of the service, such as reliability and added value. Telecommunications companies can benefit by focusing less on absolute speed and more on other attributes, including reliability.
The era of exponential growth in bandwidth demand may be coming to an end, at least temporarily. Operators must adapt to this new reality by focusing on offering robust and reliable connectivity that meets the true needs of users.