A few years ago, the question was asked many times, “who would want to watch a movie on a small screen?” Even with the advent of smartphones with larger displays, pundits and analysts (including this one) were still sceptical about the demand for small-screen entertainment, but how wrong we all were, writes Peter Dykes.
One of the main drivers behind the Sprint (pun intended) to roll out 5G infrastructure, both in terms of radio and fibre, is the demand for streamed video; with mainly radio for access and fibre for the front and backhaul. Recent events suggest that while 5G is being seen by many as essentially yet another communications technology, the effect of its introduction on network operators, both fixed and mobile, and how they are perceived, may be far more profound than 3G or 4G ever was.
With what some may construe as indecent haste, AT&T waited only two days after getting a judicial go-ahead to buy Time-Warner, the home of HBO and CNN, for around US$85.4 billion (€72.91 billion), creating a new behemoth that can both produce and distribute content to millions of mobile phone, broadband and satellite TV subscribers.
Randall Stephenson, chairman and CEO of AT&T says, “The content and creative talent at Warner Bros., HBO and Turner are first-rate. Combine all that with AT&T’s strengths in direct-to-consumer distribution, and we offer customers a differentiated, high-quality, mobile-first entertainment experience. We’re going to bring a fresh approach to how the media and entertainment industry works for consumers, content creators, distributors and advertisers.”
Position of dominance
Hard on the heels of the deal, we hear that Telecom Argentina’s proposed merger with cable TV company Cablevision has also got the green light from that country’s competition regulators, again putting a major communications provider in a position of dominance in the media and entertainment sectors.
To be fair, Telecom Argentina’s release from the regulatory blocks came with some handicaps, namely a period of grace to allow the opposition to catch up and the handing back of some spectrum, but even so, the company has a head start in the race to become something other than that which its creators originally intended it to be – a communications provider.
These events, while being only two of many such deals around the world, are symptomatic of the realisation on the part of operators, that what were once considered core services and which were indeed the original reason for their existence, are about to become a means of delivering something far more lucrative than simple voice and data.
Consumers’ growing appetite for content on the move is changing the very nature of communications operators world-wide. They are not just becoming content providers, but rather content producers with complete control over the whole value chain from production to delivery.
One wonders, therefore, how the communications market of the future will look compared to that which we have become used to. Let’s face it, with voice and data revenues in decline and likely to continue that way for the foreseeable future, these once core services are rapidly becoming loss leaders. And what would that mean in terms of what these companies really are?
They are becoming more akin to cable TV providers, but with mobile capabilities, so could such companies still be called network operators when their primary focus and most lucrative source of revenue is media and entertainment? Surely, entertainment providers would be a more accurate description.
The author is freelance telecoms writer, Peter Dykes