Telcos need to plan for gigabit broadband connectivity

Gigabit broadband is here
Gigabit broadband connectivity – offering speeds of 1 Gbps or over – is becoming widespread. Omdia’s research shows there are now over 300 service providers across all major regions offering gigabit services. The COVID-19 pandemic and resulting lockdowns have amplified and accelerated the need for fast, reliable, and low-latency connectivity – and we expect this demand to persevere. As internet connectivity in developed markets becomes increasingly ubiquitous, the conversation around the digital divide has shifted from the “haves/have nots” and is beginning to move on from raw download speed to reliability and quality of experience. 

Service provider gigabit strategies need careful planning
The provision of gigabit services requires significant investment. Telcos must carefully consider their strategies now, especially as competition in this sector is expected to grow. Gigabit players should enjoy higher ARPU, but need to make clear the advantages of gigabit to justify price premiums, clearly explaining the superior speeds, latency, reliability and QoS, with examples such as video streaming, downloading, and video calls. This is particularly vital for new entrants and those in greenfield markets with little consumer experience of gigabit connectivity. Gigabit offers are currently largely a defensive strategy in most markets—but the sector also has huge potential for disruption. Telcos need to monitor potential competitors and constantly innovate, refresh, and grow their own service offerings to stay ahead of rivals. 

Full fiber has become the gigabit strategy of choice
Full fiber (FTTH/B) is arguably the technology of choice, as Omdia’s ARPU forecasts found that fiber will be highest in the medium term, well ahead of other technologies—60% higher than both DSL and cable in 2026. But this is expected to contract post-COVID, and service providers will need to be flexible and creative to arrest the expected decline. All gigabit offerings are also reliant on a strong fiber network backbone. Operators should ensure their existing infrastructure is ready before embarking upon a gigabit offering and consider a converged network rollout with 5G or a partnership to mitigate costs. 

Flexibility is key to a successful gigabit strategy
It is likely that higher speeds alone will not justify premium pricing for gigabit services. Operators offer a wide range of consumer choice, in bundling, video content, and next-gen content such as gaming, VR, and connected home products. Service providers must also consider how to migrate existing customers to gigabit offerings if they are to prove successful.  

For more on how to develop a successful gigabit strategy, including case studies and an in-depth evaluation of technology options, read the full report: Service Provider Strategies For The Gigabit Age. This report is an example of one of the many surveys, market forecasts, reports, and market data insights that make up the Broadband, Bundling & Pricing Intelligence Service from Omdia. This service provides access to global and in-depth coverage across tariff innovation, bundling, and broadband monetization. Click here to download the overview now.