Which industries will be most affected by the rise in broadband speeds over the next decade?

What is the real potential of higher broadband speeds?

As broadband speeds increase, industries all over should prepare for a major transformation.

Fast broadband is often called a business “game changer”. Which games will it change the most over the next decade, as both mobile and fixed-line broadband networks are rolled out and broadband speeds head to 100 mb per second and above?

We put the question to three people who have both helped build broadband networks and studied their effects.

Malcolm AlderMalcolm Alder

Partner, Orchestrate

The list of industries will be determined by two main factors: inherent demand for high-capacity, ubiquitous, fast broadband; and the ability of an industry to exploit that improving capacity.

Sectors with inherent demand typically have some or all of these characteristics:

  • bandwidth-intensive images and other content
  • very high connection reliability and speed
  • wide geographic dispersion
  • a high cost to serve via other channels

Such sectors include entertainment, healthcare, scientific research, emergency services, defence, parts of education and government, elements of financial services and sections of retail.

The desire and capability of organisations to take advantage of opportunities arising from improved broadband is even more important. It should not be assumed that the most competitive, profit-driven sectors will lead. Successful incumbency can often be an inhibitor to change: for example, Australia’s major retailers were very slow off the mark going online.

However, those retailers are now investing heavily – and with good reason. There are now literally thousands of online retail product choices from right around the world. What is often more amazing is the speed with which these companies can deliver to the doorstep in Australia – there’s no tyranny of distance anymore.

As bandwidth continues to increase, the quality of customer experience will be enhanced with ever better HD graphics and video and totally interactive design that lets you select on the spot your individual product’s colours, patterns and materials. In fact, if any retailer is brave enough, you could potentially even select your own fruit and vegetables using HD cameras and automated pickers that you control.

"You could potentially pick your own fruit and vegetables using HD cameras and automated pickers." Malcolm Alder

Bronte AdamsBronte Adams

Principal, Dandolo Partners

Universities are remarkably resilient, having operated with the same basic structures for centuries. They have traditionally offered a holistic service. If a student wants the university seal, they get that university’s experience from end to end, enrolment to alumni.

The arrival of Massive Open Online Courses (MOOCs) – free online courseware provided to students generally without an attached credential – created a lot of initial hype. But the MOOCs’ competition came not from challengers but from the establishment: Harvard, MIT and Stanford. Universities realised that the core of their service – curriculum and instruction – could be offered on its own.

Unbundling of higher education is now a realistic prospect: course content, student support, assessment and credentialing can now be discrete services.

That is not an unfamiliar scenario: think news media and music, where content used to be bundled into newspapers and full albums but can now be procured per article or per song via the internet and iTunes.

But high-speed broadband, having fuelled the MOOCs threat, may also provide an antidote. Universities recognised it was the student experience – both on and off campus – which differentiated them from MOOCs. So they began to flip their classrooms – students watch the lecture online and apply their knowledge in the classroom.

Universities invested heavily in infrastructure to support real-time synchronous communication (video) to enable students to collaborate with each other and the faculty.

As is often the case with technology, the speed of change is often overestimated, but the impact is underestimated. We are seeing only the start of a revolution.

"The speed of change is often overestimated, but the impact is underestimated". Bronte Adams

Paul BuddePaul Buddea

Chief executive, BuddeComm

No company, industry or sector can escape this transformative push. Those most affected by it will be the ones who resist or move too late – the “superhighway roadkill”. Some sectors are more exposed than others, as we already have seen in organisations involved in music, newspaper and book publishing, photography, telecoms, software, film and broadcasting, and in the retail sector.

Next in line are healthcare (e-health), education, energy (smart grids) and all levels of government. Within government, the democratisation effect of these transformations will become more and more apparent and force government organisations to change dramatically.

The biggest change in healthcare will be the distribution of services. Over the last 50 years all major ICT developments have taken place at the “business” end of the sector. The change will be in delivering these services to customers/patients.

The electricity system is one of the last areas entering the digital era. The cost increases here are unsustainable and the industry will have to find ways to cut costs. Key to this are smart technologies, both within electricity’s infrastructure and customer services. The use of smart technologies – if done in a holistic way – can create energy savings worth 30 to 40 per cent.

This can drive costs down and allow the companies involved to look at opportunities such as distributed energy, battery storage, electric vehicles and micro grids. They can either take the lead in these developments, or become casualties in the tsunami of new players in the market, happy to grab these opportunities.

Key in harnessing the benefits of these changes is a holistic approach, driven by leaders who are prepared to cut through internal silos and flatten sectors.

"Those more affected by it will be the ones who resist or move too late - the 'superhighway roadkill'." Paul Budde

The experts

Malcolm Alder

Malcolm Alder is a partner at Orchestrate, a digital strategy consultancy. Previously he was partner for digital economy at KPMG. He has worked in Australia, Singapore, Malaysia, Canada, the US, UK and New Zealand with private and public sector organisations. His clients have included Telstra, Woolworths, Bell Canada, Oxford University, Macquarie Group, the ABC, Australia Post, Optus, Foxtel, NBN Co and the Australian Government. He is a director of the Australian Interactive Media Industry Association (AIMIA). 

Bronte Adams

Bronte Adams leads Dandolo Partners. She is a Rhodes Scholar and former McKinsey consultant. She has consulted to a wide range of clients in the telecommunications, information technology, biotechnology, tourism, health, energy, education and arts sectors. Adams was an adviser to Victoria’s Minister for Multimedia and an executive director of Multimedia Victoria. She is a director of the Melbourne Symphony Orchestra and deputy chair of Melbourne University Publishing.

Paul Budde

Paul Budde runs BuddeComm, an independent consultancy focusing on the telecommunications market and its role within the digital economy. The research offered by BuddeComm’s global network of senior analysts encompasses 190 countries and 200 discrete technologies. Budde specialises in the strategic planning of government and business transformation. Among his government assignments is one assisting the UN in setting up the Broadband Commission for Digital Development, of which he is now the special adviser. 

This article is from the April 2015 issue of INTHEBLACK.

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