Transformation. That's one of the key buzzwords at the Canadian Telecom Summit this year. Every keynote and panel discussion on Day One touched on the notion in one way or another, often times leading it back to the cloud.
Transformation is in the types of devices we're adopting. There were 6.8 billion mobile subscribers worldwide in the first quarter of this year, notes Ericsson Canada President Mark Henderson. And of these, 65% of customers have smartphones.
We're seeing a shift in the markets that are adopting wireless. The top-three for Q1, according to Ericsson, was India, China, and Indonesia, with India adding more subscribers in five days than we have in 25 years. The growth is astronomical, and its causing a shift in resources and attention to these emerging markets while North America reaches a level of maturation.
There's a shift, transformation, if you will, in what we're doing with those devices. A total of 62% of mobile users watch video on their devices at least weekly, and a quarter do so outside of the house, reports Ericsson. This isn't just among the Generation-Yers; 33% of 65-69 year-olds watch streaming, on-demand, and time-shifted TV on a more than weekly basis. Ericsson expects that we'll see 13 times the growth in mobile video traffic between 2013 and 2019, with half of that coming from video by 2019.
Nitin Kawale, President, Cisco Canada
There's transformation in businesses that need to reinvent themselves, and adopt more cloud-based, personalized strategies to approaching their customers. The average lifespan of a company today is just 15 years, says Nitin Kawale, President of Cisco Canada. To put this in perspective, in the 1920s, that duration was 67 years; longer than the lifespan of a typical person back then, no doubt. Companies are adopting more collaborative approaches, taking notice of the Internet of Things and how it can help automate, simplify, and advance processes. And Canada is, or should be, at the forefront of this. According to Cisco, Canada is number-three in the world for online engagement. Two-thirds of Canadians use social media; and the country is the fifth largest user of LinkedIn. Public cloud service growth, added Janet Kennedy, President, Microsoft Canada during her lunchtime keynote, is seeing a growth rate that's five-times faster than the IT industry. She predicts that 40% of all servers in the world will be shipped to public cloud vendors.
"Those that don't take advantage," warns Kawale, "will lose out. Regardless of the company's size, this is the opportunity to gain or lose. The next transformation," he adds, using that magic word, "will dwarf all others."
Janet Kennedy, President, Microsoft Canada
To wake up attendees, Kawale brought us back to 1991 when the Internet emerged, and many companies took far too long to decide if it made sense to develop a Website, or enable transactions with it. "It sounds silly now," he laughs. "But the Internet of Things is that kind of a thought process, going at light speed, and on steroids. We cannot delay or make the same mistakes that some of us may have made back then. The companies that jumped on the Internet trend in the ‘90s gained and made dramatic differences. Those who didn't, some are no longer here, others had to play catch-up for a very long time."
There's transformation in the carrier business, as the industry debates whether there's a need for a fourth national wireless carrier, and if we can truly benefit from one in the long-term. The overwhelming sentiment in a panel of academics on the Competition in Telecom was that having a fourth carrier might not be all its touted to be. "Yes, a fourth national carrier is desirable," said Leonard Waverman, Dean, DeGroote School of Business, McMaster University, "but it's not going to happen. The government has dug themselves into a deep hole." Roger Ware, Professor of Economics at Queen's University, opined that while it might help lower pricing in the short run, it would not necessarily have long-run value to society. "All oligopolies possess market power," he said. "That's just their nature. And the possession of market power is not illegal." What is, he points out, is the abuse of said power. Are the incumbents "abusing" their power? That would be an entirely different debate.
There's transformation with content providers, as the battle between traditional cable/satellite and over-the-top services continues. Rogers' Senior Vice President of Content David Purdy admits that changes are needed in traditional TV packages to accommodate the shifting needs of consumers. We binge watch, we want to be able to access a library of full series, not just the last few episodes. We want to be able to access all content across all devices. If traditional providers move in this direction, he argues, the industry may be able to recapture those cord-cutters, or cord-shavers as they call those who have cut back on their packages rather than eliminate them altogether. "This is one of the most dynamic sectors of the industry," said Jeff Fan, Director, Telecom and Cable Global Equity Research at Scotiabank, and moderator on a panel about the Continuing Evolution of TV, "and it's driving a lot of changes with the consumer and how they view video. And it's forcing the providers to adapt."
Panel on the Continuing Evolution of TV: (l-r): Jeff Fan, Director, Telecom and Cable Global Equity Research at Scotiabank (moderator); Dave Caputo, President & CEO, Sandvine; Michael Hennesy, President & CEO, Canadian Media Production Association; Dragan Neranddzic, CTO, Ericsson Canada; Charlotte Burke, CMO, QuickPlay Media; and David Purdy, Senior Vice President, Content, Rogers Communications.
"We're vertically integrated and 90 per cent of what Canadians watch is owned by a major distributor," says Purdy. "We should be leading the world and we're not. We need o do a better job at TV anywhere, with full season stacking rights. We should be able to get those rights and it's taking too long. We're not providing binge viewing fast enough. People want to watch five-to-six episodes of a show over a weekend. It's nonsense. We should be making that happen."
This means the very way consumers get their content is transforming, too. Perhaps as a result of traditional providers being slow to adapt. While the set-top box isn't going anywhere anytime soon (Purdy claims Rogers still has 100,000 analog subscribers!), there are new ways of accessing content, from the cloud, to OTT services, downloaded libraries (sadly pirated, in some cases), and through tiny devices that you can carry in your pocket, like the Roku Streaming Stick and Google Chromecast. OTT services like Netflix have also begun to offer their own original content, which is showing the industry just how much the game has changed.
The wireless industry is moving at a rapid pace. Keeping up will require that companies are pro-active, get ahead of the curve, and adopt strategies now that will help them succeed later. It's certainly time to transform.
Stay tuned for more coverage from the Canadian Telecom Summit, which takes place June 16-18 in Toronto, ON; and follow us on Twitter for live updates from the event.
Photo at top: Marc Henderson, President, Ericsson Canada