“Winning in the race for e-business”
Lecture Two - “Broadband and mobile access matter”
Presentation to Sheffield University Management
School MBA Students
17 February 2005
Prof. Jim Norton
Senior Policy Adviser
UK Institute of Directors
Former Director UK
Cabinet Office PIU
e-Commerce team
www.profjimnorton.com
Issues to be covered
• Affordable broadband access is vital for e-business.
• What do we mean by ‘affordable broadband’?
• Affordable broadband in the UK.
• Global affordable broadband development.
• The future importance of mobile access.
• Key messages
Why is broadband access key to e-business?
A key mistake in early e-business adoption was to have a sales site
hosted by an ISP (and thus ‘always on’) but not to have the ‘back
office’ permanently online and linked in real time to the sales site….
Affordable broadband allows:
• cost effective ‘always on’ linkage between ‘front’ and ‘back’
office systems ensuring that what is sold is genuinely in stock
and can be delivered…!;
• genuine participation by SMEs in the ‘extranets’ built around
industry supply chains;
• access by customers into the company’s core systems for design
and configuration
Broadband access reduces the asymmetries between large and small
companies …
Source: UK Broadband Stakeholder Forum
Benefit
Broadband impact on e-business processes
ADOPT
ADAPT
ABSORB
Time
Speed up processes
Adapt processes
New processes
• Fast always-on access
for e-mail and web
• Improved
communications
• More efficient
procurement
• More flexible working
• Improved productivity
• Adapt sales & mktg.
• Exploit VoIP
• Address new markets
• New business
models
• Outsource non-core
functions
• Improved staff
satisfaction
• Reduced costs
• More e-Learning
• Reduce office space
Source:
UK Broadband
Stakeholder Forum
Some results from “My Broadband”

A UK joint Work Foundation iSociety / BSG
research project.

UK’s first ethnographic broadband research (as
far as is known).

Investigating use, perceptions, experiences &
drivers/barriers.

Understanding the place of Broadband Internet
in everyday life.

Numerous research findings published as iSociety
/ BSG report.
Broadband isn’t just about
speed…
Source: UK Work Foundation - iSociety programme - James Crabtree
http://www.theisociety.net
Broadband use is not just about speed…

Broadband is sold as if users only care about
speed.

It is sold as a sprint, but experienced as a saunter.

But users experience it as unhurried &
unpressurised.

Doing things ‘quickly’ on the internet is not
necessarily a user objective.

Real fulfilment of the ‘speed’ promise depends on
data heavy internet use.

Everyday uses of the internet … are more
mundane.
Source: UK Work Foundation - iSociety programme - James Crabtree
http://www.theisociety.net
Broadband can be about
taking it easy
Source: UK Work Foundation - iSociety programme - James Crabtree
http://www.theisociety.net
Broadband time is different
Dial-up “Anxious Time”
Broadband “Timeless Time”
Watched and Counted
Ignored and Assumed
Restricts Experiences
Broadens Experiences
Controls the internet user
Internet user is in control
Vs.
Experiences
Rushed annoyance
Limited utility and impractical
Periodic & anxious
Experiences
Relaxed enjoyment
Realisation of potential
Smooth & reliable
Source: UK Work Foundation - iSociety programme - James Crabtree
http://www.theisociety.net
Broadband doesn’t do what it
says on the tin - it is not
perceived as always on…
Source: UK Work Foundation - iSociety programme - James Crabtree
http://www.theisociety.net
Broadband is not always on

Broadband is meant to be always-on, but for
most normal users it isn’t.

This is because always on does not equal always
there.

Household PCs are are switched off, shut away,
out of sight, out of mind, under used, and
undervalued.

Always on broadband must be always there: an
always available resource at the centre of
household life.
Source: UK Work Foundation - iSociety programme - James Crabtree
http://www.theisociety.net
Always On = Always There
Always On


The appropriated
language of broadband
marketing
The PC is switched off

A PC hidden from view:
furniture or totem

Always on: states a fact
about internet, but
doesn’t encourage an
increase in use
Always There

Pliant, always available

Accessible

A real household hub

A PC at the centre of the
home: incorporated into
everyday life

Stressing ‘always there’
encourages a different
type of use
Source: UK Work Foundation - iSociety programme - James Crabtree
http://www.theisociety.net
Issues to be covered
• Affordable broadband access is vital for e-business.
• What do we mean by ‘affordable broadband’?
• Affordable broadband in the UK.
• Global affordable broadband development.
• The future importance of mobile access.
• Key messages
What we mean by ‘Broadband’…Speed
Large business has had access to broadband for many
years, only mass market, affordable broadband is new…
Mass market broadband is a journey. There is no
simple, single definition that holds over time:
Stage
Typical SpeedTypical Application
1st Generation
256kb/s - 2Mb/s
Fast Internet access
2nd Generation
2Mb/s - 5Mb/s
Applic. Serv. Prov.
3rd Generation
5Mb/s - 50Mb/s
Real time video
Broadband services are ‘always on’ and charged simply
by rental or by volume of data shipped not by connected
time…
Source: UK Broadband Stakeholder Forum
What we mean by ‘Broadband’…Technology
There is no single ‘magic bullet’ technology for the provision of
broadband services. Genuine pervasive provision will draw on a
range of options including:
• xDSL - delivered over the existing ‘copper’ local loop used
historically for voice services. Wholesale from carriers and
retail from a wide range of ISPs (512Kbits/sec to 50Mbits/sec);
• Cable modems - enhancements to existing analogue or digital
cable TV systems. Potential for up to 30Mbits/sec per home.;
• Fixed Wireless Access - up to 8Mbits/sec and
• Satellite - available almost universally but with a high
connection/terminal equipment charge…
Many variations of cost, speed, symmetry, contention ratio, and so
on…
Source: UK Broadband Stakeholder Forum
What we mean by ‘Broadband’…Platforms
Conventional telecommunications fixed network
platforms are not the only options. Alternatives include:
• Third generation mobile services at 384 kbit/s and above ;
• Interactive digital television with ‘return paths’ via satellite
or telecommunications networks; and
• Some five to ten years hence, ‘High Altitude Platforms’
effectively static dirigibles at 60,000 feet with an enormous
coverage area.
Wide area delivery technologies will also be complemented
in homes, shops and offices by ‘local’ broadband
technologies such as Wireless LANs and Bluetooth
Source: UK Broadband Stakeholder Forum
Broadband access: A working definition
“Always on access, at work, at home, or on the
move provided by a range of fixed line, wireless
and satellite technologies to progressively
higher bandwidths capable of supporting
genuinely new and innovative interactive
content, applications and services and the
delivery of enhanced public services.”
Source: UK Broadband Stakeholder Forum - Jan 2004
Complementary delivery channels give Europe an
advantage….
Simple screen based computer access cannot provide full population
coverage. European leadership in Interactive Digital Television
(iDTV) and early roll out of GPRS and 3G mobile systems provides
a unique opportunity for genuinely pervasive access…
Following introduction
in Japan and Korea,
3G services are
already in operation in
Europe.
3.5G service is being
trialled in the Isle of
Man…
UK has the highest
digital TV penetration
in the World
Issues to be covered
• Affordable broadband access is vital for e-business.
• What do we mean by ‘affordable broadband’?
• Affordable broadband in the UK.
• Global affordable broadband development.
• The future importance of mobile access.
• Key messages
UK Broadband coverage is increasing

95% of households and SMEs have
ADSL availability.

45% of households and SMEs have
cable modem availability (50%
passed by constructed cable
network)

13% of households are in areas
covered by FWA (Firstnet)

In total some 95% of households
are covered
At the end of Dec 2004 the UK
had 6m Broadband Internet
Users (38% of the Internet access
base) with 70,000 new
connections being added each
week..
Source: Broadband Stakeholder Forum - Jan ‘04,
Ofcom Jan ‘05 and Baskerville Broadband - Oct ‘04
Wireless LANs taking off..
Exponential growth in hotspot
locations. It is expected that,
worldwide, by the end of 2005
there will be Wireless LANs
operating in:
 420 airports;

5,000 enterprise guest areas;

23,500 hotels;

85,500 retail locations; and

30,500 community points.
Source: Gartner July 2003
Estimated hotspot users
worldwide at end 2003
Europe
19%
N.America
51%
Asia/Pacific
30%
Total users = 9.1 Million
Wireless MANs for affordable broadband access

IEEE 802.11b/g is already
being used for localised
delivery (backhaul still a
challenge) and in
experimental mesh
networks.

802.16a - WiMax offers
great potential as a
backhaul solution but
spectrum availability
unclear.

802.20 (pending) - active
antenna technologies for
portable wireless DSL
(PWDSL).
UK fixed line DSL &
cable broadband
coverage Q3-2003
UK affordable broadband users: The adoption
growth curve
UK has passed the “knee” in its adoption
curve and is likely to continue to see
dramatic growth…
Source: UK Ofcom Nov 04
UK affordable broadband users: Exceptional
satisfaction scores…
Data from NOP’s UK
Broadband Internet User
Profile Survey, June 2003
60%
34%
4%
Very satisfied
Quite satisfied
Neither/Nor
Source: UK Trade Association Intellect and NOP Sept ‘03
2%
Quite/very
dissatisfied
UK ICT Sector SMEs: Affordable broadband
access satisfaction & importance
Mean score
Importance of keeping
Broadband connection
9.4
Ease of integration into
existing IT framework
8.5
7.8
Ease of installation
Effect on staff
satisfaction
Effect on staff
productivity
Scale: 1 is negative and 10 is positive
Source: UK Trade Association Intellect and NOP Sept ‘03
7.3
6.8
Benefits of Broadband Connectivity
UK ICT SMEs
60%
Time saving
33%
Cost efficiencies
28%
Employee satisfaction
21%
Smarter working
14%
Customer satisfaction
New business
Client satisfaction
7%
5%
Source: UK Trade Association Intellect and NOP Sept ‘03
Currently, the main
benefits of Broadband
are on internal
processes, with a
smaller percentage of
the base seeing
external benefits
Effect on Business Processes - UK ICT SMEs
26%
Generally speeded things up
19%
We are more efficient
14%
Use Internet more, for research
Faster communications
12%
Easier to share info
12%
Increased business activity
12%
Speedier business processes
9%
Staff can work remotely
9%
Speedier connection
9%
Easier data-file transfer
9%
Cost savings
7%
Source: UK Trade Association Intellect and NOP Sept ‘03
IoD Policy Unit broadband survey
•
Policy Unit questionnaire published
in June edition of IoD News and on
IoD.com
•
409 IoD members responded.
•
Small businesses dominated:
o
o
o
o
56.7% has up to 9 employees;
23% had 10 to 49 employees;
11.5% had 50 to 249 employees; and
8.1% had more than 250 employees.
Source: Nildram/IoD October 2004
84.3
61.5
33.5
7.1
3.1
1.8
Other
No benefits
Don't know
Revenue
increases
Improved
customer
satisf'n
17.5
Cost savings
100
90
80
70
60
50
40
30
20
10
0
Productivity
improvement
% Respondents
What quantifiable benefits are you seeing
in your business use of broadband access?
84.3% of respondents cite productivity improvements from broadband access.
64% of respondents see a direct link between broadband and increased profits.
Base: 325 respondents who use broadband for business purposes.
Source: Nildram/IoD October 2004
Many respondents believe that broadband access
brings very significant business benefits
Better and faster R&D.
Can now do jobs we would
not have contemplated four
years ago.
Improved communications
with/for outworkers
Speed and ability to
work anywhere in the
World
Source: Nildram/IoD October 2004
Better information for
decisions
Couldn’t do business without
it.
Transforms way of working.
Quick access to worldwide web
with huge increase in use at low
fixed monthly cost.
If your organisation uses broadband and has used the same
service for a year or more, which have you seen over time?
60
47.4
% Respondents
50
40
30
24.6
20
11.4
10
0
Rise
Decline
No change
Change in service quality
Respondents are not seeing falling service quality as more customers join…
Base: 325 respondents who use broadband for business purposes.
Source: Nildram/IoD October 2004
What measures do you take to protect your home (or home
office) PC against viruses and other security threats?
100
% Respondents
90
80
89.8
96.3
76.6
70
60
50
40
30
20
10
0.3
0
Firewall installed
Virus checker
software
Suppliers'
security updates
regularly
installed
None
There are still significant vulnerabilities with 10% of respondents not
using a firewall and 23% not regularly installing security updates…
Base: 325 respondents who use broadband for business purposes.
Source: Nildram/IoD October 2004
Issues to be covered
• Affordable broadband access is vital for e-business.
• What do we mean by ‘affordable broadband’?
• Affordable broadband in the UK.
• Global affordable broadband development.
• The future importance of mobile access.
• Key messages
Broadband access top 15 countries
At the
end of
Dec
2004,
UK had
around
10%.
Source:
Ofcom Jan
2005
Source: ITU “The Portable Internet” Sept 2004
What is the consumer using the Internet for?
A Canadian example…
• Affluent
• Highly
educated
• Internet
penetration
45%
• Use of
Internet for
High
bandwidth
activities:
• games
• music
• e-learning
Source: Industry Canada
Issues to be covered
• Affordable broadband access is vital for e-business.
• What do we mean by ‘affordable broadband’?
• Affordable broadband in the UK.
• Global affordable broadband development.
• The future importance of mobile access.
• Key messages
First assertion – Whatever starts uni-directional
becomes bi-directional…

•
•
19th Century: the first UK application of telephone
technology was for one way “narrowcasts” of live
theatre performances;
20th Century paging gave way to the short message
service (SMS); and
21st Century data traffic may well be dominated by
peer to peer transfers (music, video….) rather than
simple uni-directional streaming.
History suggests that, in telecommunications, whatever
we start doing as a uni-directional service we ultimate
seek to use two-way….and to the broadest of bases.
Source: Jim Norton - Speech to Cambridge 3G - Oct 2002
Second assertion – Fixed operation always leads to
mobile demand…



Telegraph and telex gave way to paging and SMS;
Fixed line phones overtaken by mobile phones
(As of Summer ‘04, UK business and residential fixed lines
34.31M, mobile lines: 55.03M - Source: Ofcom Oct ‘04)
(for comparison EU mobile phone penetration is now 80%,
Luxembourg 115%! - Source: FT quoting EU report 9 Nov-03)
US Laptop/Palm computer purchases overtake desktops.
(US consumers in May 2003 for the first time spent more
money buying notebook computers than they did on desktop
PCs, highlighting a shift to mobile computing devices that
has been accelerating in the past few years - Source: FT 3 July 03.)
History suggests then that, in telecommunications, whatever we
start doing through a fixed infrastructure, we will inevitably seek to
do with complete mobility.
Source: Jim Norton - Speech to Cambridge 3G - Oct 2002
Third assertion – New applications are pioneered
on the fixed networks first…
It is seldom the case that new applications appear
first in the mobile world. Whether it is:
•
•
•
•
•
that wonderful euphemism “Adult services”;
gambling;
multi user gaming;
health; and
education.
They have been pioneered - and the first customers trained to
demand them – in the tethered world. This should not be a
surprise - historically cost and capability have favoured the fixed
environment – though this may be much less clear in the future….
Source: Jim Norton - Speech to Cambridge 3G - Oct 2002
Don’t confuse WAP with true m-business
“As user friendly as a cornered WAP” - Simon Moores - The Research Group
WAP is excellent for short transactions:
• when does my flight leave?
• what is my account balance?
• what is the share price of BT?
WAP is awful for:
• general web browsing
• shopping
• sifting through large amounts of information.
How will the mobile phone change to become a
true m-business device?
•
Keypad - removed in 2005 - replaced by
continuous voice recognition.
•
Screen - upgraded by end 2006 - made as
large as you wish using foldable amorphous
semiconductor.
•
Communications - upgrading:
• now nationally to 28.8 kbps (HSCSD) and
40 kbps (GPRS); and
• Now rolling out 3G to 384 kbps wide area 2
Mbps in building.
Source: A little informed
speculation!
•
Processing - by end 2006 as capable as as
top of the range year 2003 laptop.
•
Battery life - probably the biggest problem!
Methane based micro-fuel cells by 2006/7.
Don’t forget the short-range mobility technologies
In five years time:
 no devices will be tethered to fixed infrastructure. There will be extensive use of:
 Bluetooth - up to 723 kbps, range 10 to 100 metres;
 Personal Area Networks up to 480 Mbits/sec, range 1-10 metres;
 UMTS - DECT enhancements; and
 Wireless LANs 11 & 54 Mbits/sec.

there will be massive fibre capacity to the curb or building, but
extensive use of radio for the last 10 metres internally and last
100 metres to 5 kilometres outside; and

devices will be dual
standard for use both
inside and outside
buildings.
True interactivity will be a key driver of
change….
Online gamers v
online buyers
Country Game
China
43%
Malaysia 29%
Singapore 39%
Korea
50%
HK
35%
India
15%
Shop
16%
11%
25%
43%
19%
13%
Source: IDC Asia-Pacific.
Study of 3600 Internet users
published Dec 2002
Mass market broadband access could be a major catalyst for
social and economic change. It may drive extensive new uses of
interactivity in gaming, entertainment, education…
Issues to be covered
• Affordable broadband access is vital for e-business.
• What do we mean by ‘affordable broadband’?
• Affordable broadband in the UK.
• Global affordable broadband development.
• The future importance of mobile access.
• Key messages
Key messages….

Affordable broadband access, initially fixed,
eventually mobile, is a key accelerator of e-Business.

Broadband enabled e-business often generates
business benefits way beyond costs.

Interactivity based upon pervasive, affordable,
broadband access will have profound implications.

UK has been a long way behind on pervasive
broadband, but is now catching up.

New and complementary delivery channels, such as
interactive digital TV and 3G mobile phones, will
give the Europe a key role…
And remember the law of unintended
consequences….
Questions & Answers
Slides (in portable document format) available to download from:
www.profjimnorton.com/shef05mba2.ppt